Tamilnadu Cooperative Housing Federation Ltd., CHENNAI V. ACIT, CHENNAI

CO 38/CHNY/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3078 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 24-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S KAMARAJ
• Assessee Lawyers: S BALASUBRAMANIAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.557/MDS/2017 / ASSESSMENT YEAR : 2008-09 & CO NO.38/MDS/2017 THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 9 (1), CHENNAI 34. V. M/S. TAMILNADU COOPERATIVE HOUSING FEDERATION LTD., NO.40, RITHERDON ROAD, CHENNAI 600 007. PAN : AAAAT0096N ( /APPELLANT) ( /RESPONDENT) /APPELLANT BY : SHRI S. BALASUBRAMANIAN, CIT /RESPONDENT BY : SHRI S. KAMARAJ, CA /DATE OF HEARING : 02.05.2017 /DATE OF PRONOUNCEMENT : 29.06.2017 / O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE REVENUE AND THE CROSS O BJECTION BY THE ASSESSEE ARISING OUT OF THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-10, CHENNAI, D ATED 30.12.2016 IN ITA NO.81/15-16/CIT(A)-10 FOR THE ASS ESSMENT YEAR 2008-09 PASSED U/S.143(3) R.W.S. 147 OF THE ACT. 2 I.T.A. NO. 557/MDS/2017 & C.O. NO.38/MDS/2017 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE BY GRANTING DED UCTION U/S.80P(2)(A)(I) OF THE ACT, FOLLOWING THE ORDER OF THE LD.CIT(A), JURISDICTIONAL TRIBUNAL AND THE HONBLE HIGH COURT IN THE APPELLANTS OWN CASE ON THE IDENTICAL ISSUE FOR THE ASSESSMENT YEAR 2007-08. 3. THE ASSESSEE HAS RAISED CROSS OBJECTIONS AND THE Y ARE IN SUPPORT OF THE ORDER OF THE LD.CIT(A) FOR GRANTING DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A REGISTERED COOPERATIVE SOCIETY PROVIDING CREDIT FAC ILITIES TO ITS MEMBERS FOR CONSTRUCTION OF HOUSES BOTH RURAL AND U RBAN. THE MEMBERS OF THE ASSESSEE SOCIETY ARE RURAL AND URBAN HOUSING SOCIETIES. THE ASSESSEES SOCIETY WITH THE HELP OF THE STATE GOVERNMENT OF TAMIL NADU FINANCES LOAN TO ITS MEMBE RS (HOUSING SOCIETIES), WHO IN TURN GIVE HOUSING LOAN TO THEIR MEMBERS WHO ARE THE ACTUAL BENEFICIARIES. THE PRIMARY OBJECTIVES O F THE FEDERATION ARE:- (I) TO OBTAIN FUND BY WAY OF LOANS. 3 I.T.A. NO. 557/MDS/2017 & C.O. NO.38/MDS/2017 (II) TO GRANT LOANS TO THE AFFILIATED HOUSING SOCIE TIES. (III) TO ACQUIRE HOUSING SITES / CONSTRUCT RESIDENT IAL HOUSE (IV) TO INSPECT AFFILIATED HOUSING SOCIETIES. (V) TO DO ALL OTHER THINGS THOSE ARE INCIDENTAL FOR ATTAINMENT OF THE ABOVE OBJECTS. 5. FOR THE RELEVANT ASSESSMENT YEAR THE ASSESSEE FI LED ITS RETURN OF INCOME ON 16.12.2008 ADMITTING TOTAL INCO ME OF RS.24,19,17,147/- AND CLAIMED THE ENTIRE AMOUNT AS DEDUCTION U/S.80P OF THE ACT. ON THE EARLIER OCCASION FOR TH E ASSESSMENT YEAR 2007-08, THE LD.AO HAD DISALLOWED THE DEDUCTIO N U/S.80P OF THE ACT TO THE ASSESSEE BECAUSE OF THE FOLLOWING RE ASONS:- 1) THE TAMIL NADU COOPERATIVE HOUSING FEDERATION W AS ORIGINALLY INCORPORATED IN THE NAME OF THE MADRAS COOPERATIVE CENTRAL HOUSE MORTGAGE BANK LIMITED IN 1959, WHICH WAS RENAMED AS TAMIL NADU HOUSING SOCIETY LI MITED, MADRAS IN 1083 AND WAS AGAIN RENAMED AS TAMIL NADU COOPERATIVE HOUSING FEDERATION LIMITED' IN 1987. I N THIS CONNECTION, IT IS TO BE STATED THAT THE DEDUCTION U /S. 80P IS APPLICABLE TO ALL SOCIETIES EXCEPT HOUSING SOCIETY, URBAN CONSUMERS SOCIETY. THE FEDERATION IS COVERING THE ENTIRE AREA OF TAMIL NADU COMPRISING 619 URBAN SOCIETIES AND 19 7TALUK COOPERATIVE HOUSING SOCIETIES. SINCE THE SECTION D OES NOT COVER HOUSING SOCIETIES, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S.80P. 2) THE ASSESSEE M/S. TAMIL NADU COOPERATIVE HOUSIN G FEDERATION LTD, HAS EXTENDED FINANCE FACILITIES TO HOUSING 4 I.T.A. NO. 557/MDS/2017 & C.O. NO.38/MDS/2017 SOCIETIES BUT NOT PRIMARY MEMBERS. MEMBERS CANNO T BE EXTENDED TO INCLUDE MEMBER COOPERATIVE SOCIETIES, W HICH IN TURN HAVE PRIMARY MEMBERS DERIVING THE BENEFIT OF FINANC ING. HENCE, IT HAS TO BE UNDERSTOOD THAT THE ASSESSEE IS EXTENDING CREDIT FACILITIES TO ITS CONSTITUENT MEMBERS I.E. R URAL & URBAN HOUSING SOCIETIES, BUT NOT DIRECTLY TO THE ACTUAL B ENEFICIARIES. SUBSEQUENTLY, THE LD.CIT(A), THE CHENNAI BENCH OF THE TRIBUNAL AND THE HONBLE JURISDICTIONAL MADRAS HIGH COURT HAD HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. HOWEVER, FOR THE RELEVANT ASSESSMENT YEAR, THE LD.AO IN ORDER TO KEEP THE ISS UE ALIVE, FOLLOWED HIS EARLIER ORDER AND THEREBY DISALLOWED T HE CLAIM OF DEDUCTION U/S.80P TO THE ASSESSEE. ON APPEAL, THE LD.CIT(A) FOLLOWING HIS EARLIER ORDER FOR THE ASSESSMENT YEAR 2007-08, ORDER OF THE CHENNAI BENCH OF THE TRIBUNAL AND THE HONBL E JURISDICTIONAL HIGH COURT IN THE ASSESSEES OWN CASE FOR THE ASSES SMENT YEAR 2007-08, ALLOWED THE APPEAL OF THE ASSESSEE, AGGRIE VED BY WHICH, THE REVENUE IS NOW IN APPEAL BEFORE US. 6. AT THE OUTSET, WE FIND THE ISSUE COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE ASSESS EES OWN CASE, THEREFORE WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF 5 I.T.A. NO. 557/MDS/2017 & C.O. NO.38/MDS/2017 THE LD.CIT(A) IN THIS ISSUE FOR THE RELEVANT ASSESS MENT YEAR. ACCORDINGLY WE UPHOLD THE ORDER OF THE LD.CIT(A). 7. THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS ALLOWED IN FAVOUR OF THE ASSESSEE, AS IT IS ONLY IN SUPPORT OF THE ORDER OF THE LD.CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 29 TH JUNE, 2017 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED, THE 29 TH JUNE, 2017. JR. ! ' ! /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. #$% ( ) /CIT(A) 4. #$% /CIT, 5. ! /DR 6. &' /GF.