GREEN RIDGE TOWER CO OP HOUSING SOCIETY LIMITED ,MUMBAI V. INCOME TAX OFFICER WARD 42(1)(2), MUMBAI

ITA 849/MUM/2025

AI Insights

The case involves Green Ridge Tower Co-op Housing Society Limited appealing against the order of the CIT(A) / NFAC which assessed their total income significantly higher than reported and disallowed certain deductions. The primary contention was regarding the deduction of interest income from cooperative banks under section 80P(2)(d) of the Income Tax Act, which the assessee argued was wrongly restricted by the CPC. The Tribunal considered various precedents and the specific treatment of interest income from cooperative banks, ultimately deciding to restore the matter to the assessing officer for verification of figures and proper allowance of deductions where applicable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46912 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASIF KAR MALI
• Assessee Lawyers: BHARAT GANDHI
• Keywords: Principle of natural justice
• Section: 143(1); 234B; 80P

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “J SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & MS. PADMAVATHY S, ACCOUNTANT MEMBER ITA No. 849/MUM/2025 (AY : 2021-22) (Physical Hearing) Green Ridge Tower Co-op Housing Society Limited Plot No 474/475, Link Road, Chikuwadi. Shimpoli, Borivali (West), Mumbai-400092. PAN No. AAAAG 4567 D बनाम Vs ITO, Ward-42(1)(2), Mumbai अपीलाथ /Appellant थ /Respondent िनधा\u000f\u0010रतीकीओरसे /Assessee by Shri Bharat Gandhi, AR राज\u0018कीओरसे /Revenue by Shri Asif Karmali, Sr. DR Date of institution of appeal 07.02.2025 सुनवाईकीतारीख/Date of hearing 09.04.2025 उद ्घोषणाकीतारीख/Date of pronouncement 09.04.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of ld. CIT(A) / NFAC dated 03.01.2025for A.Y. 2021-22. The assessee has raised the following grounds of appeal: 1. Because the Ld. Assessing officer has erred The Appellant has filed the present appeal aggrieved by the intimation order u/s. 143 (1) dated 30/09/2022 The grounds of appeal are as under 2. Because the Ld. Assessing officer has erred The CPC has erred in law and on facts in assessing the total income of the Appellant at Rs. 12,58,267/- u/s. 143(1) as against Rs. Nil returned by the Appellant 3. Because the Ld. Assessing officer has erred The CPC has violated principle of natural Justice by restricting the response to notice proposing prima facie adjustment within 500 characters and by not permitting to attach any evidence to substantiate appellant reply. ITA No. 849/Mum/2025 Green Ridge Tower Co Op Housing Society Limited 2 4.Because the Ld. Assessing officer has erred The Ld. CPC has erred in law or on fact in not allowing deduction of Rs. 12,83,995/-being interest received from Co-operative Bank u/s. 80P (2) (d) claimed in the ITR 5 filed but restricted the same to Rs. 25728/-being saving bank a/c interest received from co-operative banks. 5. Because the Ld. Assessing officer has erred The Ld. CPC has erred in law and on facts in disposing off rectification application fled on 13.10.22 without passing any speaking order with reasoning and by totally ignoring submission made by the appellant 6.Because the Ld. Assessing officer has erred The CPC has erred in law in levying consequential interest of Rs. 53,082/- u/s. 234B andRs. 14,892/- u/s 234C of IT Act, 1961 and the same may be deleted. 7. The appellant craves relief to add, to alter, to amend, modify or delete any other ground as stated above.” 2. Rival submissions of ld. Authorised Representative (AR) of the assessee and the ld. Sr. Departmental Representative (DR) for the Revenue were heard and record perused. The ld. AR of the assessee submits that while filing return of income, in the computation of total income, the assessee claimed deduction of interest income received from Maharashtra State Co-op Bank and Saraswat Co-op Bank. Such deduction are allowable deduction under section 80P(2)(d) of Income Tax Act (Act) . The ld. AR of the assessee fairly submits that assessee also claimed interest from Savings Bank Account with Union Bank of India, State Bank of Hyderabad (maintenance account) and other account to the State Bank of Hyderabad which is not eligible for deduction. The ld. AR of the assessee furnished copy of computation of total income and pointed out all the break0up / components of interest income received either from nationalised bank or from co-operative banks. The ld. AR of the assessee submits that in a series of decision by Mumbai Bench as well as other Co- ordinate Benches, it has been consistently held that co-operative banks are ITA No. 849/Mum/2025 Green Ridge Tower Co Op Housing Society Limited 3 primarily co-operative society and interest earned from co-operative banks are eligible for deduction u/s 80P(2)(d). The ratio of case law referred and relied by ld. CIT(A) while confirming the adjustment made by CPC, are not applicable on the facts of the present case. The assessee is confining his relief of deduction under section 80P(2)(d) in respect of interest earned from co-operative banks only. 3. On the other hand, ld. Sr. DR for the Revenue supported the order of CIT(A). 4. We have considered the rival submission of both the parties and have gone through the orders of lower authorities carefully. We have also deliberated on various case laws relied by ld. CIT(A) in his order. We find that ld. AR of the assessee, while making his submission fairly accepted that assessee is not eligible for deduction of interest earned from nationalised banks. Therefore, such part of deduction claimed by assessee and disallowed by AO / CPC is confirmed to that extent. So far as other deduction, which relates to interest earned from FD with Saraswat Co-op Bank and Maharashtra Co-op Bank are concerned, the Co-ordinate Bench of this Tribunal in a series of decision by following its decision as well as different High Courts have categorically held that co-operative banks are primarily co-operative society and the interest or dividend income earned from such co-operative bank are eligible for deduction u/s 80P(2)(d). We find that the assessee in its computation of income has shown interest from Saraswat Co-operative Bank and the same was capitalised in the balance sheet, such treatment is not permissible under law. Considering the fact that assessee is eligible for interest earned from co- operative / co-operative society, therefore, issue related with interest income ITA No. 849/Mum/2025 Green Ridge Tower Co Op Housing Society Limited 4 earned from Maharashtra State Co-operative Bank and Saraswat Co-operative Bank is restored back to the file of jurisdictional assessing officer to verify the figure of interest income and allow the same to assessee in accordance with law. In the result, grounds of appeal raised by the assessee are partly allowed. 5. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 09/04/2025. /- Sd/- PADMAVATHY S ACCOUNTANT MEMBER - Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, DATED: 09/04/2025 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai "