EVERSHINE NO II CO-OP HSG SO LIMITED,MUMBAI V. ITO WARD 25(1)(1), MUMBAI

ITA 819/MUM/2025

AI Insights

The case involves Evershine No. II Cooperative Housing Society Limited, which appealed against the denial of deduction under section 80P(2)(d) of the I.T. Act by the Income Tax Officer (ITO). The deduction pertained to interest earned on fixed deposits with cooperative banks, which the ITO classified as income from other sources. The Tribunal considered previous decisions and the debatable nature of the issue, which has been contested up to the Supreme Court. The Tribunal noted that similar deductions were allowed in subsequent assessment years under similar circumstances. The Tribunal's decision was influenced by judicial discipline and precedents set by other benches of the Mumbai ITAT.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314596 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2014-2015
• Other Referred Cases: Kshatriya Gadkari Maratha Co-operative Credit Society Ltd v. ITO in ITA No. 3646 & 3647/Mum/2018, Kalindas Udyog Bhavan Premises Co-op Hsg Society v. ITO in ITA No. 654/Mum/2017
• Laws Referred To: I.T. Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN SALUKHE
• Assessee Lawyers: BHUPENDRA SHAH
• Keywords: Opportunity of being heard; Rectification of order; Co-operative Credit Society
• Section: 154

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “H(SMC)” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI OMKARESHWAR CHIDARA, AM I.T.A. No. 819/Mum/2025 (Assessment Year: 2014-15) Evershine No. II Cooperative Housing Society Limited Plot No. 142/2, A&B, Jai Prakash Road, Andheri West Mumbai-400 053. Vs. ITO Ward 25(1)(1) Mumbai AAAAE2344L Appellant) : Respondent) Appellant /Assessee by : Shri Bhupendra Shah Revenue / Respondent by : Shri Pravin Salukhe Date of Hearing : 20.03.2025 Date of Pronouncement : 06.05.2025 O R D E R Per Omkareshwar Chidara, AM: In this case of Evershine No. II Cooperative Housing Society Ltd, the appellant society raised the following grounds of appeal before the ITAT stating that the addition under section 143(1) of the I.T. Act cannot be made by CPC denying the benefit of deduction claimed under section 80P(2)(d) of the Act : “1. The learned A.O. erred in not granting deduction u/s 80P(2)(d) amounting to Rs. 4,55,531/- thereby passing rectification order u/s 154 by way of income from other sources in respect of interest earned on fixed deposit from/with Co-operative banks by also overlooking the fact that debatable addition cannot be sustained u/s 154 or 143(1) and also overlooking the fact that the appellant has been allowed deduction u/s 80P(2)(d) in the earlier years. 2. The learned A.O. erred in not granting deduction u/s 80P(2)(d) amounting to Rs. 4,55,531/- thereby passing rectification order u/s 154 by way of income from other sources in respect of interest earned on fixed deposit from/with Co-operative banks thereby 2 Evershine No. II Cooperative Housing Society Limited rejecting case laws of jurisdictional Tribunal. Mumbai in the case of Kshatriya Gadkari Maratha Co-operative Credit Society Ltd v. ITO in ITA No. 3646 & 3647/Mum/2018 and Kalindas Udyog Bhavan Premises Co-op Hsg Society v. ITO in ITA No. 654/Mum/2017. 3. In the facts and circumstances of the case and in law, the learned AO erred in wrongly charging interest u/s 234A, B & C. 4. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax(A) erred in confirming the hereby not accepting the petition for condonation filed and by also overlooking the fact that debatable addition cannot be sustained u/s 154 or 143[1] and not granting an opportunity of being heard before passing the order.” 2. The Ld. AR of the appellant has made two fold argument before the ITAT as follows : a) The deduction claimed by the appellant under section 80P(2)(d) of the Act is a debatable issue as the same was being contested by various appellants upto Hon’ble Supreme Court and hence the addition cannot be made by CPC under section 143(1) which permits the mistakes of undisputed and prima facie adjustments can be rectified. b) The Ld. CIT(A) has dismissed its appeal by not condoning the delay in filing the appeal, despite there is valid reason and merits were not discussed. c) The Ld. AR of the appellant has also argued that in the subsequent years, viz., A.Y. 2015-16 to 2018-19 the first appellate authority has allowed the deduction under section 80P(2)(d) of the Act in similar circumstances. 3. The Ld. DR relied on the orders of Ld. AO (CPC) and order of Ld. CIT(A)and requested the Bench to confirm the addition. 4. Heard both sides. This issue of deduction under section 80P(2)(d) of the Act relating to interest received from the Cooperative Banks by the Cooperative Societies is covered in favour of appellant by the decisions of various Coordinate Benches of Mumbai ITAT including the decisions cited by Ld. AR of 3 Evershine No. II Cooperative Housing Society Limited the appellant in the grounds of appeal before the ITAT. Moreover, the issue is debatable and hence addition cannot be made under section 143(1) of the I.T. Act by CPC. Following the judicial discipline, as the issue is covered in favour of the appellant, in the cases of Kshatriya Gadkari Maratha Cooperative Society ITA No. 3646 & 3647/Mum/2018 and Kalindas Udyog Bhavan Premises Cooperative Society ITA No. 654/Mum/2017, the addition made by the Ld. AO is deleted. 5. The appeal of the appellant is allowed. Order pronounced in the open court on 06-05-2025. Sd/- Sd/- (BEENA PILLAI) (OMKARESHWAR CHIDARA) Judicial Member Accountant Member PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. 5. Guard File CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai "