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TMI Blog2022 (1) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... not allowable and secondly it is capital expenditure. The assessee has not disputed the fact that this is a capital expenditure and therefore, the assessee has raised an alternate plea of allowance of depreciation on building which is duly reflected in the balance sheet of the assessee. Since the A.O. is otherwise bound to consider and allow the depreciation on the fixed assets which are eligible for depreciation as per Explanation (5) to Section 32 of the Act, therefore, non-consideration of the claim of depreciation on the part of the A.O. as well as on the part of the ld. CIT(A) is not justified and contrary to the provisions of Section 32 of the Act. This issue of depreciation is to be considered after verifying the eligible assets and the satisfaction of the conditions of Section 32 of the Act being an asset has been brought into existence and used in the business of the assessee or at least ready to use for the business of the assessee. Accordingly, in the facts and circumstances of the case, this issue is set aside to the record of the A.O. to consider and decide the same after giving an opportunity of hearing to the assessee. - ITA No. 29/JP/2021 - - - Dated:- 7-1-2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0P of the Act and consequently the same was added to the total income of the assessee. The assessee has challenged the action of the A.O. before the ld. CIT(A) but could not succeed. 3. Before the Tribunal, the ld. AR of the assessee has submitted that the assessee is a cooperative society and not having any license from RBI to do the business of banking, therefore, the assessee is eligible for deduction/exemption U/s 80P of the Act. He has further submitted that for the A.Y. 2010-11 and 2012-13, the ld. CIT(A) has allowed the claim of deduction U/s 80P(2)(a)(i) of the Act in respect of the interest received from the employees. He has referred to the orders of the ld. CIT(A) for the A.Y. 2010-11 and 2012-13 and submitted that the department has not challenged the orders of the ld. CIT(A) for those assessment years and therefore, the same has attained finality. Thus, the ld. AR has submitted that the issue is covered by the orders of the ld. CIT(A) for the A.Y. 2010-11 and 2012-13. He has also relied upon the decision of the Hon ble Supreme Court in the case of Citizen Co-operative Society Ltd. Vs ACIT (2017) 397 ITR 1 (SC) and submitted that Section 80P of the Act is benevolent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity of the assessee with the Members of the assessee society but the said income was earned from the loan and advances to the non-members. The assessee is a Primary Cooperative Agricultural Rural Land Development Society registered under the Rajasthan Cooperative Societies Act, 1965. The A.O. has accepted the status of the assessee as a cooperative society and not as the bank having license from the RBI to do the banking business which is hit by sub-Section (4) of Section 80P of the Act, therefore, there is no dispute regarding status of the assessee and eligibility of the deduction U/s 80P of the Act. The limited controversy in the appeal of the assessee is regarding disallowance of the claim of deduction U/s 80P(2)(a)(i) of the Act in respect of interest on the loan and advances given to the employees/non-members. The ld. CIT(A) has decided this issue in para 7.1 to 7.3 as under: 7.1 I have carefully considered the relevant and material facts on record, in respect of the second issue raised in this ground of appeal, as brought out in the assessment order and submissions made during appeal proceedings. The moot point is whether the activity of earning interest income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able on such facts, I find that the addition of interest incomes received by the appellant from its employees, aggregating to ₹ 5,66,036/-, has been correctly made by the AO, on the ground that the same does not qualify for exemption under section 80P(2)(a)(i) of the Act. The action of AO does not call for any interference. Accordingly, the total addition of ₹ 5,66,036/- made by the AO on this account is confirmed. This ground of appeal is dismissed. Thus, it is clear that the ld. CIT(A) has relied upon the decision of Hon ble Jurisdictional High Court in the case of CIT Vs S.B.V. Bank Ltd. (supra) which is a binding precedent. Though the Hon ble Supreme Court had admitted the SLP filed by the assessee in the said case, however, no stay was granted by the Hon ble Supreme Court against the decision of the Hon ble High Court, therefore, so long the decision of the Hon ble High Court is in operation and holds the field, the same is binding on this Tribunal. Hence, I do not find any error or illegality in the impugned order of the ld. CIT(A) qua this issue and I uphold the same. 6. Ground No. 2 of the appeal is regarding depreciation on addition to the building acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ground that this provision is not allowable and secondly it is capital expenditure. The assessee has not disputed the fact that this is a capital expenditure and therefore, the assessee has raised an alternate plea of allowance of depreciation on building which is duly reflected in the balance sheet of the assessee. Since the A.O. is otherwise bound to consider and allow the depreciation on the fixed assets which are eligible for depreciation as per Explanation (5) to Section 32 of the Act, therefore, non-consideration of the claim of depreciation on the part of the A.O. as well as on the part of the ld. CIT(A) is not justified and contrary to the provisions of Section 32 of the Act. This issue of depreciation is to be considered after verifying the eligible assets and the satisfaction of the conditions of Section 32 of the Act being an asset has been brought into existence and used in the business of the assessee or at least ready to use for the business of the assessee. Accordingly, in the facts and circumstances of the case, this issue is set aside to the record of the A.O. to consider and decide the same after giving an opportunity of hearing to the assessee. 10. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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