Asst. Commissioner of Income Tax, Circle-9(1), Hyderabad. V. The Advocate Mutually Aided Co-operative Society Limited., Hyderabad

ITA 1129/Hyd/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2697 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-01-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 04-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Section: 143(3)

Judgement Text

ITA NOS 1710 OF 2016 AND 1129 OF 2017 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NOS.1710/HYD/2016 & 1129/HYD/2017 (ASSESSMENT YEARS: 2012-13 & 2013-14) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 9(1) HYDERABAD VS THE ADVOCATES MUTUALLY AIDED COOPERATIVE SOCIETY LTD HYDERABAD PAN: AAAAT 7853 P (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. SUMAN MALIK, DR FOR ASSESSEE : SHRI A. SRINIVAS O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.YS 2012-13 & 20 13- 14. IN THESE APPEALS, THE REVENUE IS AGGRIEVED BY T HE ORDER OF THE LEARNED CIT (A)-7, HYDERABAD, DATED 5.8.2016 IN HOL DING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P(2) OF TH E ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A COOPERATIVE SOCIETY DERIVING INCOME FROM THE ACTIVI TY OF PROVIDING CREDIT FACILITIES TO THE MEMBERS/NOMINAL MEMBERS AS WELL AS DERIVING INCOME FROM SALE OF STAMPS, FILED ITS RETU RN OF INCOME FOR THE RELEVANT A.YS AFTER CLAIMING DEDUCTION U/S 80P OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO DATE OF HEARING: 24.01 . 2018 DATE OF PRONOUNCEMENT: 25.01.2018 ITA NOS 1710 OF 2016 AND 1129 OF 2017 PAGE 2 OF 3 DISALLOWED THE CLAIM U/S 80P OF THE ACT ON THE GROU ND THAT THERE IS NO PRINCIPLE OF MUTUALITY AND THAT THE INTEREST EARNED IS INCOME FROM OTHER SOURCES. THE AO ALSO DISALLOWED THE INTEREST PAID TO THE MEMBERS U/S 40(A)(IA) OF THE ACT. AGGRI EVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A), WH O ALLOWED THE SAME BY FOLLOWING THE DECISION OF THE ITAT IN THE A SSESSEES OWN CASE FOR THE A.YS 2007-08 TO 2010-11 IN ITA NO.546, 547, 133/HYD/2012 AND ITA NO.1860/HYD/2013, DATED 20.02. 2015. WITH REGARD TO THE DISALLOWANCE U/S 40(A)(IA), THE CIT (A) HELD THAT THE ASSESSEE IS NOT UNDER AN OBLIGATION TO MAKE TDS AS PER SECTION 194A(3)(V) OF THE ACT, HENCE THE DISALLOWAN CE CANNOT BE MADE. 3. THE LEARNED DR, SUPPORTED THE ORDERS OF THE AO W HILE THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE CIT (A). 4. HAVING GONE THROUGH THE MATERIAL ON RECORD AND A LSO THE ORDERS OF THE TRIBUNAL IN THE ASSESSEES OWN CA SE (CITED SUPRA), WE FIND THAT THE TRIBUNAL AT PARA 15 OF ITS ORDER HAS COME TO THE CONCLUSION THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P(2) OF THE ACT. THE RELEVANT PARAGRAPH IS REPROD UCED HEREUNDER FOR THE SAKE OF READY REFERENCE: 15. NOW COMING TO THE GROUNDS 2 AND 3 RAISED BY THE REVENUE, THE ISSUE IS SIMILAR TO THE ISSUES DISCUSS ED IN A.Y. 2007-08 ABOVE. AS FAR AS ASSESSEE'S ACTIVITIES ARE CONCERNED, SINCE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80P(2)(A)(I) ONLY ON THE INCOME OF CR EDIT FACILITIES PROVIDED TO ITS MEMBERS, A.O. WAS CORREC TLY DIRECTED BY THE LD. CIT(A) TO ALLOW THE DEDUCTION. LD. CIT(A) ALSO ANALYSED OTHER MISCELLANEOUS INCOME AND ITA NOS 1710 OF 2016 AND 1129 OF 2017 PAGE 3 OF 3 DIRECTED THE A.O. TO EXCLUDE THE SAME. THEREFORE, W E DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE LD. CIT(A) IN DIRECTING THE A.O. TO ALLOW DEDUCTION UNDER SECTION 80P(2)(A)(I). HOWEVER, A.O. IS DIRECT ED TO EXAMINE THE QUANTUM OF INCOME EARNED AND ALLOW THE DEDUCTION ACCORDINGLY. WE ALSO FIND NO REASON TO INTERFERE WITH THE DIRECTIONS OF THE LD. CIT(A) IN GRANTING DEDUCTION UNDER SECTION 80P(2)(D). THE LD. CIT(A) DIRECTION IS WITH REFERENCE TO THE INCOMES E ARNED FROM THE COOPERATIVE SOCIETIES/COOPERATIVE BANKS AS COVERED BY SECTION 80P(2)(D). 5. RESPECTFULLY FOLLOWING THE SAME, WE SEE NO REASO N TO INTERFERE WITH THE ORDER OF THE CIT (A) AND THE REV ENUES GROUNDS APPEALS ARE DISMISSED. 6. IN THE RESULT, REVENUES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2018. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 25 TH JANUARY 2018. VINODAN/SPS COPY TO: 1 DY.CIT, CIRCLE 9(1) ROOM NO.245, BLOCK D, SECOND FLOOR, IT TOWERS, AC GUARD S, MASAB TANK, HYDERABAD 2 THE ADVOCATES MUTUALLY AIDED COOPERATIVE SOCIETY LTD, CITY CIVIL COURT PREMISES, DIWAN DEVDI, HYDERABAD 3 CIT (A)-7 HYDERABAD 4 PR. CIT 7 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER