GUNDECHA GARDENS CO-OPERATIVE HOUSING SOCIETY LIMITED, MUMBAI V. COMMISSIONER OF INCOME TAX (APPEAL) , MUMBAI

ITA 115/MUM/2023

AI Insights

The case involves Gundecha Gardens Cooperative Housing Society Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi, which had denied them a deduction under section 80P(2)(d) of the Income Tax Act, 1961, for bank interest earned from a cooperative bank. The Assessing Officer had initially disallowed the deduction, categorizing the cooperative bank as a commercial entity not falling under the purview of a cooperative society. The Tribunal, referencing several ITAT decisions, concluded that the interest income from deposits in a cooperative bank is entitled to deduction under section 80P(2)(d), as the cooperative bank is registered under the Cooperative Society Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130116 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 12-01-2023
• Other Referred Cases: Mittal Park Cooperative Housing Society Ltd. Vs. Asst. Director of Income Tax, Mum, W(125) (95) CPC, Bengaluru, Mittal Park Cooperative Housing Society Vs. ITO, Ward 25 (3)(1), Mumbai, Kaliandas Udyog Bhavan Premises Coop Society Ltd. Vs. ITO 21(1)(2), Aqua Cooperative Housing Society Limited Vs ITO 21(1)(2), Sea Green Cooperative Housing Society Ltd. Vs. ITO 21(3)(2), Lands' End Cooperative Housing Society Ltd. Vs. ITO 16(1)(3), The Nutan Laxmi Chs Ltd. Mumbai Vs. ITO 19(2)(4), M/s Palmera Cooperative Housing Society Ltd. Vs. ACIT, 19(2)
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80P; 143(2)

Judgement Text

P a g e | 1 ITA No.115/Mum/2023 Gundecha Gardens Cooperative Housing Society Ltd. Vs. CIT(A) NFAC IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No. 115/Mum/2023 (A.Y.2017-18) Gundecha Gardens Co- operative Housing Society Limited C.S. No.44, 1/44 Parel Sewri Division, D. Khamkar Marg Lalbaug 400012 Vs. Commissioner of Income Tax (Appeals) Ministry of Finance, Income Tax Department, National Faceless Appeal Centre (NFAC), Delhi स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAAAG5768Q Appellant .. Respondent Appellant by : Manoj Mahimkar Respondent by : Bharat Andhale Date of Hearing 13.03.2023 Date of Pronouncement 17.03.2023 आदेश / O R D E R Per Amarjit Singh (AM): The present appeal filed by the assesse is directed against the order passed by the NFAC, Delhi dated 16.11.2022 for A.Y. 2017-18. The assesse has raised the following grounds before us: “1. The Honourable Commissioner of Income Tax- (Appeal), NFAC, Delhi. [Hon. CIT-(A)] has erred on the fact and in the circumstances of the case and in the law denying the deduction under section 80P (2) (d) of the Income Tax Act 1961 (The Act") in respect of bank interest earned from co-operative banks 2. The Hon. CIT-(A) has erred on the fact and in the circumstances of the case and in the law in interpreting the exclusion clause specified in section 80P (4) of the Act. P a g e | 2 ITA No.115/Mum/2023 Gundecha Gardens Cooperative Housing Society Ltd. Vs. CIT(A) NFAC 3. The Hon. CIT-(A) has erred on the fact and in the circumstances of the case and in the law in correlating section 80P (4) with section 80P (2)(d) of the Act. 4. The Hon. CIT-(A) has erred on the fact and in the circumstances of the case and in the law failed to appreciate the fact that section 80P(2)(d) and 80P(4) are two independent sections, and the section 80P does not contain any expressed provision which denies the deduction under section 80P(2)(d). 5. The Hon. CIT-(A) has erred on the fact and in the circumstances of the case and in the law has "presumed that the said deduction is not allowable with reference to section 80P(4). 6. The Hon. CIT-(A) has erred on the fact and in the circumstances of the case and in the law by not appreciating the fact that the income earned by the appellant out of the money lying in the fixed deposit account and other account is entitled to deduction under section 80P (2) (d) of the Act. 7. That the appellant craves leave to add, amend, alter, and delete any of the grounds of appeal before the hearing.” 2. The fact in brief is that assessee is a cooperative Housing Society and filed return of income for assessment year 2017-18 on 29.08.2017 showing total income of Rs.10,51,270/-. The case of the assessee was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 10.08.2018. During the course of assessment the assessing officer noticed that assessee received bank interest on fixed deposit from cooperative bank, Mumbai district Central Cooperative Bank to the amount of Rs.14,25,131/-. The assessee has also claimed deduction u/s 80P (2)(d) of the Act. On the aforesaid interest the assessing officer disallowed the claim of deduction u/s 80P(2)(d) of the Act on the ground that cooperative bank is a commercial bank and does not fall under the purview of a cooperative society. 3. Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. 4. Heard both the sides and perused the material on record. The assessee is a cooperative housing society registered under the P a g e | 3 ITA No.115/Mum/2023 Gundecha Gardens Cooperative Housing Society Ltd. Vs. CIT(A) NFAC Maharashtra Cooperative Society Act, 1960. The assessee has claimed deduction of Rs.14,75,131/- u/s 80P(2)(d) being interest received on the investment made with the cooperative bank. During the course of appellate proceedings before us the ld. Counsel has placed reliance on the various decision of ITAT, Mumbai wherein the claim of deduction u/s 80P(2)(d) was allowed on the interest income earned from the bank deposit with cooperative bank. (i) Mittal Park Cooperative Housing Society Ltd. Vs. Asst. Director of Income Tax, Mum, W(125) (95) CPC, Bengaluru, (Ld. ADIT). (ii) Mittal Park Cooperative Housing Society Vs. ITO, Ward 25 (3)(1), Mumbai (iii) Kaliandas Udyog Bhavan Premises Coop Society Ltd. Vs. ITO 21(1)(2). (iv) Aqua Cooperative Housing Society Limited Vs ITO 21(1)(2) (v) Sea Green Cooperative Housing Society Ltd. Vs. ITO 21(3)(2) (vi) lands’ End Cooperative Housing Society Ltd. Vs. ITO 16(1)(3) (vii) The Nutan Laxmi Chs Ltd. Mumbai Vs. ITO 19(2)(4) (viii) M/s Palmera Cooperative Housing Society Ltd. Vs. ACIT, 19(2) With the assistance of ld. Representative we have gone through the decision of ITAT, Mumbai in the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd. Vs. ITO 21(2)(1) vide ITA No. 6547/Mum/2017, dated 25.04.2018 wherein it is held that though the cooperative bank pursuant to the insertion of sub-section (4) of Sec. 80P is no more be entitled for claim of deduction u/s 80P of the Act, but however, as a cooperative bank continues to be a cooperative society registered under the Cooperative Society Act, 1912 or under any other law for the time being in force in any state for the registration of cooperative societies, therefore, the interest income derived by a cooperative society from its investment held with a cooperative bank would be entitled for claim of deduction u/s 80P(2)(d) of the Act. Similarly, we consider other various decision of the ITAT, on the same issue referred above by the ld. Counsel wherein it is held that claim of deduction u/s 80P(2)(d) in respect of interest earned from investment made in the cooperative bank is allowable, therefore, we direct the A.O to allow the claim of the assesse in respect of interest earned from P a g e | 4 ITA No.115/Mum/2023 Gundecha Gardens Cooperative Housing Society Ltd. Vs. CIT(A) NFAC investment made with the cooperative bank. Therefore, appeal of the assessee is allowed. 5. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 17.03.2023 Sd/- Sd/- (Aby T. Varkey) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 17.03.2023 Rohit: PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai.