Ita v. Itr 1

Digitally signed byANUSHA VLocation: HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20 DAY OF MARCH, 2023 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 28 OF 2021 BETWEEN: M/S. ATHMASHAKTHI MULTIPURPOSE CO-OPERATIVE SOCIETY LTD., #16-01-29/11, SHREE ARCADE BALMATTA ROAD BENDOORWELL MANGALORE-575 002 …APPELLANT (BY SHRI. R. CHANDRASHEKAR, ADVOCATE AND SHRI. R. RAMA MURTHY, ADVOCATE) AND: 1. THE PRINCIPAL COMMISSIONER OF INCOME TAX, C.R.BUILDING M.G.ROAD, ATTAWARA MANGALORE-575 001 2. THE INCOME TAX OFFICER WARE-1 (4), C.R.BUILDING M.G.ROAD, ATTAWARA MANGALORE-575 001 …RESPONDENTS (BY SHRI. K.V. ARAVIND, SENIOR STANDING COUNSEL) THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 18.10.219 PASSED IN ITA NO.1221/BANG/2019 FOR THE ASSESSMENT YEAR 2016-2017 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTION OF LAW STATED THEREIN AND ALLOW THE APPEAL BY SETTING ASIDE THE ORDER OF APPELLATE TRIBUNAL DATED 18.10.2019 IN ITA NO.1221/BANG/2019 FOR THE ASSESSMENT YEAR 2016-2017 AND ETC. THIS ITA, COMING ON FOR FINAL HEARING, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the assessee directed against order dated October 18, 2019 in ITA No.1221/Bang/2019 for the A.Y.2016-17 passed by the ITAT[1], Bengaluru, has been admitted to consider following questions of law; “1. Whether, the Appellate Tribunal is right in holding the appellant is not entitle deduction claimed u/s.80P(2)(a)(i) of the Act for the assessment year 2016-17 on the ground that that the associated members have exceeded 15% of regular members? 2. Whether, the Appellate Tribunal is right in holding the appellant is not entitled to deduction u/s.80P(2)(d) of the Act, even though there is no finding that the interest earned from Co-operative Banks is out of deposits made not out of its own funds? 3. Whether, the order of the Appellate Tribunal dated 18-10-2019 rendered in ITA No.1221/Bang/2019 for the assessment year 2016-17 on the ground that assessment year 2016-17 is sustainable in law?” 2. Heard Shri R.Chandrashekar, learned advocate for the appellant and Shri K.V.Aravind, learned Senior Standing Counsel for the Revenue. 1Income Tax Appellate Tribunal 3. Shri Chandrashekar submitted that ITAT has passed the impugned order by following the case in Citizen Co-operative Society Ltd., Vs, Assistant Commissioner of Income Tax[2]. However, in view of the authority in case of Mavilayi Service Co-operative Bank Ltd., and Others v/s Commissioner of Income Tax and Another[3], the matter requires reconsideration in the hands of the AO[4]. He submitted that the number of associated members were beyond 15%. The profits attributable to the land given to the members in respect of 15% excess members will not be entitled for benefit of deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961. Accordingly, he prays that the matter may be remitted to the AO for reconsideration in accordance with law. 4. Shri Aravind, in his usual fairness, does not dispute the facts stated by the learned advocate for the appellant. 2 397 ITR 1 3 [2021] 431 ITA 1 (SC) 4 Assessing Officer 5. In view of the above, the following; ORDER (i)Appeal is allowed; (ii)Order dated 18.10.2019 in ITA No.1221/Bang/2019 passed by the ITAT, Bengaluru is set-aside; (ii)Order dated 18.10.2019 in ITA No.1221/Bang/2019 passed by the ITAT, Bengaluru is set-aside; (iii)The matter is remitted to the file of the AO for reconsideration in accordance with law; and AO for reconsideration in accordance with law; and 4. Shri Aravind, in his usual fairness, does not dispute the facts stated by the learned advocate for the appellant. 2 397 ITR 1 3 [2021] 431 ITA 1 (SC) 4 Assessing Officer 5. In view of the above, the following; ORDER (i)Appeal is allowed; (ii)Order dated 18.10.2019 in ITA No.1221/Bang/2019 passed by the ITAT, Bengaluru is set-aside; (ii)Order dated 18.10.2019 in ITA No.1221/Bang/2019 passed by the ITAT, Bengaluru is set-aside; (iii)The matter is remitted to the file of the AO for reconsideration in accordance with law; and AO for reconsideration in accordance with law; and (iv)All questions of law are kept open. Since the matter is remanded, questions of law do not require any answer and accordingly, they are not answered. Since the matter is remanded, questions of law do not require any answer and accordingly, they are not answered. No costs. Sd/- JUDGE Sd/- JUDGE