Appeal details
Counselvise Citation
[2016] 130 COUNSELVISE.COM (IT) 9625 (ITAT-VISAKHAPATNAM)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 7 month(s) 29 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-12-2016
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Next Hearing Date
08-12-2015
Assessment Year
2008-2009
Appeal Filed On
24-04-2012
Judgement Text
ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJ UNATHA, ACCOUNTANT MEMBER . / I . T .A.NO. 13 7 /VIZAG/ 2012 ( / ASSESSMENT YEAR: 2008 - 09 ) THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOCIETY LTD., ELURU VS. ITO, WARD - 2, ELURU [PAN: AACAT0060G ] ( / APPELLANT) ( / RESPONDENT) ./ I.T.A.NO. 473&474 /VIZAG/ 2012 ( / ASSESSMENT YEAR: 2007 - 08 & 2009 - 10 RESPECTIVELY ) ITO, WARD - 2, ELURU VS. THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOCIET Y LTD., ELURU ( / APPELLANT) ( / RESPONDENT) C.O. NOS.13 & 14/VIZAG/2013 (ARISING OUT OF I.T.A.NO S .473&474/VIZAG/2012 RESPECTIVELY) ( / ASSESSMENT YEAR: 2007 - 08 & 2009 - 10 RESPECTIVE LY ) THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOCIETY LTD., ELURU VS. ITO, WARD - 2, ELURU ( / APPELLANT) ( / RESPONDENT) ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 2 / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI T. SATYANADHAM, DR / DATE OF HEARING : 04.10.2016 / DATE OF PRONOUNCEMENT : 23 .12.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY ASSESSEE IS DIRECTED AG AINST THE ORDER OF CIT(A), VISAKHAPATNAM DATED 25.1.2012 FOR THE ASSESSMENT YEAR 2008 - 09 AND APPEALS FILED BY REVENUE ARE DIRECTED AGAINST THE ORDER OF CIT, GUNTUR DATED 9.10.2012 FOR THE ASSESSMENT YEARS 2007 - 08 & 2009 - 10 AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE IN SUPPORT OF THE ORDER PASSED BY THE CIT, GUNTUR. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOSED - OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FAC TS ARE IN BRIEF THAT THE ASSESSEE - THE ELURU CO - OPERATIVE HOUSE MORTGAGE BANK LIMITED IS A REGISTERED SOCIETY, WHICH IS ESTABLISHED IN THE YEAR 1963. THE SOCIETY WAS INITIALLY REGISTERED IN THE NAME AND STYLE OF ELURU CO - OPERATIVE HOUSE MORTGAGE BANK LIM ITED. HOWEVER, THE NAME WAS CHANGED AS THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOCIETY ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 3 LIMITED W.E.F. 19.2.2009. THE ASSESSEE SOCIETY IS FORMED WITH THE FOLLOWING OBJECTS: 1. TO ENCOURAGE THRIFT, SELF HELP OF MEMBERS IN ACCORDANCE WITH CO - OPERATIVE PRINCIP LES. 2. TO BORROW FUNDS FROM MEMBERS OR OTHERS TO BE UTILIZED FOR FINANC ING MEMBERS FOR USEFUL PURPOSES. 3. TO FUNCTION AS A BANK A ND CARRY ON BANKING BUSINESS INCL UDING ACCEPTANCE OF DEPOSITS . 4. PURCHASE AND SELL GOVT. TRUSTEE AND OTHER SECURITIES. TO I SSUE LOAN/LOANS ON THE MORTGAGE OF NATIONAL SAVINGS CERTIFICATES, KISAN VIKAS, INDIRA VIKASA PATRAS TO A MEMBER OR NON - MEMBER AS PER THE TERMS AND CONDITIONS LAID DOWN BY THE BOARD OF MANAGEMENT FROM TIME TO TIME . 5. TO MAINTAIN SAFE DEPOSIT VAULTS, LOCKER S AND LET OUT ON HIRE OR OTHERWISE; 6 . TO ACT AS AGENT FOR ANY PERSON IN THE COURSE OF BUSINESS OF THE BANK; 7 . TO PURCHASE, ACQUIRE OR LEASE OR OTHERWISE OBTAIN MOVABLE OR IMMOVABLE PROPERTY AND DISPOSE OF THE SAME FOR THE NEEDS OF THE BANK OR IN CONNECTI ON WITH THE SETTLEMENT OF LOANS DUE TO IT BUT IT SHALL NOT DEAL IN THE BUSINESS OR PURCHASE OR SALE OF PROPERTY. 8. TO OPEN BRANCHES, SUB - OFFICES, PAY OFFICES AT VARIOUS PLACES IN ITS AREA OF OPERATIONS AFTER OBTAINING NECESSARY PERMISSION FROM THE RBI UND ER SECTION 23(I) OF THE BANKING REGULATION ACT 1949. 9 . FOR EFFECTING REPAIRS OR IMPROVEMENTS TO HOUSES OR ADDING TO THEIR PREMISES OR CONSTRUCTION OF NEW HOUSES. 10. FOR DISCHARGE OF PRIOR DEBTS. 11. FOR LIQUIDATION OF OLD DEBTS WHICH A MEMBER IS UNABLE TO DO WITH THE HELP OF A LONG TERM LOAN. 12. TO CARRY OUT AND DISCHARGE SUCH DUTIES, FUNCTIONS AND BUSINESS WHICH ARE USUALLY CARRIED ON BY A BANK OR A BANKER. 3. THE ASSESSEE SOCIETY FILED A RETURN OF INCOME BY CLAIMING DEDUCTION U/S 80P OF THE INCOME TA X ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT'). IN THE ASSESSMENT ORDER, THE A.O. HAS ASKED TH E ASSESSEE WHY THE CLAIM MADE U/S 80P OF THE ACT SHOULD NOT BE DISALLOWED IN VIEW ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 4 OF SECTION 80P(4) OF THE ACT. IT WAS SUBMITTED BEFORE THE A.O. THAT THE ASSESSE E SOCIETY RUNS ON MUTUALITY CONCEPT AND A PERSON CANNOT EARN INCOME FROM HIMSELF AND THUS SURPLUS IS NOT TAXABLE. IT IS FURTHER SUBMITTED THAT IT IS A HOUSING SOCIETY GIVING LOANS TO ITS MEMBERS, NONE OF ITS ACTIVITIES ARE IN THE NATURE OF BANKING BUSINES S . THE ASSESSING OFFICER AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, HE HAS NOTED THAT ASSESSEE RECEIVED INTEREST ON ADVANCES FROM ITS MEMBERS AND ALSO FROM OTHERS INCLUDING OTHER BANKS. IT IS FURTHER NOTED THAT ASSESSEE PAID INTEREST TO MEMBERS O N THEIR FIXED DEPOSITS AND TO THE OTHER PERSONS INCLUDING BANKS , FROM WHOM , DEPOSITS WERE RAISED. HE ALSO NOTED THAT THE ASSESSEE BYE LAWS PROVIDE BORROWINGS AS WELL AS LENDING TO NON - MEMBERS ALSO. HE ALSO NOTED FROM THE AUDIT REPORT THAT ASSESSEE IS ACC EPTING AND COLLECTING DEPOSITS FROM THE MEMBERS AND ALSO NON - MEMBERS AND THE ABOVE DEPOSITS ARE INVESTED IN OTHER BANKS. WITH THE ABOVE OBSERVATION, THE A.O. BY CONSIDERING THE PROVISIONS OF SECTION 80P(4) OF THE ACT, HELD THAT ASSESSEES INCOME IS NOT EX EMPT U/S 80P(2) OF THE ACT. 4 . THE ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE CIT(A). IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE ASSESSEE SOCIETY IS REGISTERED AS ELURU CO - OPERATIVE HOUSE MORTGAGE BANK LIMITED AND IN PURSUANCE TO ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 5 THE DIRECTION GI VEN TO THE CO - OPERATIVE DEPARTMENTS, THE NAME IS CHANGED AS ELURU CO - OPERATIVE MORTGAGE SOCIETY LIMITED AND IT IS SUBMITTED THAT ON THE DATE OF ASSESSMENT, THE ASSESSEES STATUS IS A CO - OPERATIVE SOCIETY BUT NOT A CO - OPERATIVE BANK. T HE ASSESS EE FURTHER SUBMITTED THAT THE ASSESSEE SOCIETY CANNOT BE CONSIDERED AS A BANK FOR THE REASON THAT THE RESERVE BANK OF INDIA HAS NOT ISSUED LICENSE TO CARRY THE BANKING BUSINESS AND FURTHER SUBMITTED THAT SECTION 80P(4) OF THE ACT IS NOT APPLICABLE TO THE ASSESSEE. THE LD . CIT(A) BY CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE PASSED A DETAILED ORDER FROM PAGE NOS. 4 TO 7 AT PARAGRAPHS 3.2 TO 3.9 AND HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 80P (2)(A)(I) AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER . THE LD . CIT(A), IN HIS ORDER, OBSERVED THAT AS PER THE OBJECTS OF THE ASSESSEE IT IS FOUND THAT THE INTENTION OF THE ASSESSEE TO FUNCTION AS A BANK AND TO CARRY ON BANKING BUSINESS. IT IS ALSO NOT DISPUTED FACT THAT THE ASSESS EE IS CARRYING BANKING BUSINESS BY ACCEPTING THE DEPOSITS AND BY ISSUING LOANS . IT I S ALSO THE OBJECT OF THE ASSESSEE TO MAINTENANCE OF SAFE DEPOSIT VAULTS, LOCKERS AND ACT AS AGENT FOR ANY OTHER PERSON IN THE COURSE OF BANKING BUSINESS . HE HAS ALSO GIV EN A FINDING THAT THE ASSESSEE IS DOING BANKING BUSINESS , BOTH WITH MEMBER S AND NON - ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 6 MEMBERS . IN VIEW OF THE ABOVE, HE DENIED EXEMPTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. 5 . ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE TRIBUNAL. 6 . THE LD. C OUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS A CO - OPERATIVE SOCIETY AND IS ELIGIBLE FOR EXEMPTION U/S . 80P(2) OF THE ACT. THE A.O. AS WELL AS LD. CIT(A) HAVE FAILED TO CONSIDER THE FACT THAT THE RESERVE BANK OF INDIA HAS NOT GRANTE D LICENSE TO THE ASSES SEE TO CARRY BANKING BUSINESS, T HEREFORE THE ASSESSEE CANNOT BE CONSIDERED AS A BANK AS PER CLAUSE (4) OF SECTION 80P. IN SUPPORT OF HIS ARGUMENTS, HE RELIED ON THE FOLLOWING CASE LAWS: - 1) ITO V. BHAMHANATH CREDIT SOUHARDA SAHAKARI LTD. [(2015) 45 CCH 101 (PANAJI TRIB.)] 2) ITO V. KPTC AND HESCOM EMPLOYEES CO - OP CREDIT SOCIETY LTD. [(2015) 45 CCH 93 (BANG. TRIB.) ] 3) SIKAR SAHAKARI BHOOMI VIKAS BANK LTD. V. ITO [(2015) 42 ITR 176 (JAIPUR TRIB.) ] 4) ITO V. SHREE SIDDESHWAR SOUHA RDHA SAHAKARI NIYAMIT [(2015) 44 CCH 403 (BANG. TRIB.) ] . 7 . ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED THAT THE ASSESSEE SOCIETY IS EXISTED ONLY FOR DOING THE BANKING BUSINESS AND THEREFORE, IT HAS TO BE CONSIDERED AS A CO - OPERATIVE BANK UNDER THE PR OVISIONS OF ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 7 SECTION 80(4) OF THE ACT. THE ASSESSEES OBJECT ITSELF PROVIDES FOR CARRY OUT BANKING BUSINESS INCLUDING ACCEPTANCE OF THE DEPOSITS FROM OTHERS , WHO ARE NON - MEMBERS AND TO MAINTAIN SA FE DEPOSIT, VAULTS, LOCKERS ETC. WHICH IS SIMILAR IN FUNCTIO N ING OF NATIONALIZED COMMERCIAL BANKS. SO FAR AS LICENSE FROM RESERVE BANK IS CONCERNED, IT IS IMMATERIAL WHETHER BANK GRANTED THE LICENSE OR NOT. IT HAS TO BE SEEN AT THE TIME OF GRANT OF EXEMPTION THAT WHETHER ASSESSEE IS ELIGIBLE OR NOT. IN THIS CASE , ASSESS EE IS CARRYING BANKING BUSINESS ON PAR WITH COMMERCIAL BANKS, THEREFORE, NOT ELIGIBLE FOR EXEMPTION U/S 80P(2)(A)(I) OF THE ACT. 8 . WE HAVE HEARD BOTH TH E PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE INITIALLY IS THE ELURU CO - OPERATIVE HOUSE MORTGAGE BANK LIMITED. SUBSEQUENTLY, ITS NAME IS CHANGED AS THE ELURU CO OPERATIVE HOUSE MORTGAGE SOCIETY LIMITED W.E.F. 19.2.2009. THE OBJECTS OF THE ASSESSEE SOCIETY ARE SAME EVEN A FTER CHANGING THE NAME. AFTER CAREFUL CONSIDERATION OF THE OBJECTS OF THE SOCIETY , IT IS VERY CLEAR THAT THE INTENTION OF THE ASSESSEE IS TO CARRY THE BANKING BUSINESS . IT IS ALSO CLEAR FROM THE READING OF THE OBJECTS OF THE SOCIETY THAT THE ASSESSEE IS N OT ONLY EXISTED FOR THE BENEFIT OF THE MEMBERS BUT ALSO FOR NON - MEMBERS . IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE IS DOING BANKING BUSINESS WITH MEMBERS AND ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 8 NON - MEMBERS. IT IS VERY CLEAR FROM THE ORDERS OF T HE ASSESSING OFFICER AS WELL AS LD. CIT(A) THAT THE ASSESSEE IS CARRYING ITS ACTIVITY NOT ONLY WITH MEMBER S BUT ALSO NON - MEMBERS, T HEREFORE THE ASSESSEE CANNOT BE CONSIDERED AS WORKING ON THE BASIS OF PRINCIPLE OF MUTUALITY. 9 . THE MAIN PURPOSE AND INTENT ION OF THE LEGISLATURE TO INTRODUCE SECTION 80P TO EXEMPT INCOME OF THE CERTAIN ASSESSEES, WHO ARE WORKING ON THE PRINCIPLE S OF MUTUALITY . O VER A PERIOD OF TIME, THE SAME WAS MISUSED BY SOME OF THE ASSESSEES , WHO ARE CARRYING ITS ACTIVITIES IN THE COMMERC IAL LINES / ON PAR WITH COMMERCIAL BANKS WHICH IS CONTRARY TO THE PURPOSE FOR WHICH THE SECTION WAS INCORPORATED IN THE ACT. T O CURB THE MISUSE OF SECTION 80P(2), T HE LEGISLATURE HAS BROUGHT AMENDMENT TO THE FINANCE ACT BY INCORPORATING SUB - CLAUSE (4) TO SECTION 80P W.E. F. 01/04/2007, THE SAME IS EXTRACTED HEREUNDER: - [(4) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN RELATION TO ANY CO - OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTUR AL AND RURAL DEVELOPMENT BANK. EXPLANATION : - FOR THE PURPOSES OF THIS SUB - SECTION, (A) CO - OPERATIVE BANK AND PRIMARY AGRICULTURAL CREDIT SOCIETY SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO THEM IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949); (B) PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK MEANS A SOCIETY HAVING ITS AREA OF OPERATION CONFINED TO A TALUK AND THE PRINCIPAL OBJECT OF WHICH IS TO PROVIDE FOR LONG - TERM CREDIT FOR AGRICULTURAL AND RURAL DEVELOPMENT ACTIVITI ES.] ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 9 AS PER THE ABOVE SUB - CL A USE (4) TO SECTION 80P , ANY ASSESSEE TO AVAIL THE BENEFIT UNDER SECTION 80P(2)(A)(I) , THAT ASSESSEE SHOULD BE A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK . INCOME TAX ACT HAS NOT DEFINED COOPERATIVE BANK. AS PER PART V OF THE BANKING REGULATION ACT, 1949 THE P RIMARY AGRICULTURAL CREDIT SOCIETY MEANS A COOPERATIVE SOCIETY : (I) THE PRIMARY OBJECT OR PRINCIPAL BUSINESS OF WHICH IS TO PROVIDE FINANCIAL ACCOMMODATION TO IT S MEMBERS FOR AGRICULTURAL PURPOSES OR FOR PURPOSES CONNECTED WITH AGRICULTURAL ACTIVITIES (INCLUDING THE MARKETING OF CROPS); AND (II) THE BYE - LAWS OF WHICH DO NOT PERMIT ADMISSION OF ANY OTHER COOPERATIVE SOCIETY AS MEMBER . SO FAR AS THE TERM COOPERATI VE AGRICULTURAL AND RURAL DEVELOPMENT BANK IS A SOCIETY WHOSE AREA POPULATION IS CONFINED TO A TALUK AND ITS PRINCIPAL OBJECT IS TO PROVIDE LONG TERM CREDIT FOR SPECIFIED ACTIVITIES. 10. IN THE PRESENT CASE, THE ASSESSEES /BUSINESS IS NOT RELATED TO ANY AGRICULTURAL ACTIVITIES, THEREFORE THE ASSESSEE HAS NOT FULFILLED ANY CONDITION AS LAID DOWN TO AVAIL THE BENEFIT UNDER SECTION 80P(2)(A)(I) OF THE ACT. EVEN THOUGH, THE ACT PROVIDES EXEMPTION FROM INCOME EARNED BY THE COOPERATIVES SOCIETIES , WHICH ARE SOLELY EXISTED FOR PROVIDING CREDIT FACILITIES TO ITS MEMBERS. IN THE PRESENT CASE , THE ASSESSEE IS A REGISTERED WITH THE REGISTRAR OF COOPERATIVE SOCIETIES IN THE NAME AND ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 10 STYLE OF THE ELURU CO - OPERATIVE HOUSE MORTGAGE BANK LTD. AND SUBSEQUENTLY, IT WA S CONVERTED INTO THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOCIETY LTD. W.E.F. 19/02/2009, HOWEVER, THE OBJECTS OF THE ASSESSEE ARE SAME AS WERE BEFORE 19/02/2009 . BOTH THE AUTHORITIES BELOW HAVE GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE IS ACCEPTING DE POSITS FROM MEMBERS AS WELL AS NON - MEMBERS AND ALSO EXTENDING ITS SERVICES . UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, ASSESSEE CANNOT BE CONSIDERED AS A COOPERATIVE SOCIETY. IN OUR OPINION, SUB - CLAUSE (4) TO SECTION 80P CLEARLY APPLIES TO THE ASSESSEE , T HEREFORE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. 11 . INSOFAR AS THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE IS CONCERNED , THE ASSESSEE CANNOT BE CONSIDERED AS A BANK FOR THE PURPOSE OF SUB - C L A USE (4) TO SECTION 80P THAT RBI HAS NOT GRANTED LICEN S E. IN OUR OPINION, TO AVAIL BENEFIT UNDER SECTION 80P(2)(A)(I) , THE UNDERLYING PRINCIPLE IS THAT THE ASSESSEE ORGANIZATION HAS TO CARRY OUT ITS ACTIVITIES ON THE PRINCIPLE OF MUTUALITY. ONCE, THE AS SESSEE FAILED TO CARRY ITS ACTIVITIES ON THE ABOVE PRINCIPLE, THE ASSESSEE IS NOT ENTITLED TO GET BENEFIT UNDER SECTION 80P OF THE ACT, AS IT WILL COME WITHIN THE PURVIEW OF SECTION 80P(4) AFTER 01/04/2007 . IN THE PRESENT CASE , IT IS VERY CLEAR THAT THE A SSESSEE IS CARRYING ITS BUSINESS ACTIVITIES WITH MEMBER S AND ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 11 NON - MEMBERS . O NCE NON - MEMBER S EN TERED INTO THE ORGANIZATION, THE PRINCIPLES OF MUTUALITY WILL AUTOMA TICALLY EXISTS. INSOFAR AS LICENS E OF RBI IS CONCERNED, IT IS NOT A BASIS FOR CONSIDER ING THE ASSESSEE IS ELIGIBLE FOR SECTION 80P OR NOT, THE ONLY BASIS IS WHETHER THE ASSESSEE IS CARRYING ITS ACTIVITIES ON THE PRINCIPLES OF MUTUALITY OR NOT. IN THE PRESENT CASE , BY CONSIDERING THE OBJECTS OF THE ASSESSEE AND ALSO ACTIVITIES CARR IED OUT BY THE ASSESSEE, IT CANNOT BE SAID THAT THE ASSESSEE IS WORKING ON THE BASIS OF PRINCIPLE OF MUTUALITY AND T HEREFORE NO T EL I GIBLE FOR BENEFIT UNDER SECTION 80P OF THE ACT . THE ASSESSEE HAS ALSO FAILED TO FULFILL THE CONDITIONS AS LAID DOWN IN SUB - CL A USE (4) OF SECTION 80P TO AVAIL THE BENEFIT OF SECTION 80P OF THE ACT. 12. SO FAR AS THE DECISION RELIED ON BY THE ASSESSEE IN THE CASE OF BHAMHANATH CREDIT SOUHARDA SAHAKARI LTD. (SUPRA) IS CONCERNED , THE ASSESSEE IS A COOPERATIVE SOCIETY REGISTERED AS COOPERATIVE SOCIETY, PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND NOT REGISTERED WITH THE RBI, T HEREFORE THE COORDINATE BENCH OF TH IS PANAJI TRIBUNAL HELD THAT THE BENEFIT UNDER SECTION 80P(2)(A)(I) CANNOT BE DENIED BY FOLLOWING THE DECISION OF HONB LE KARNATAKA HIGH COURT IN THE CASE OF SRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA, BAGALKOT . THE ABOVE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE . SO FAR AS OTHER CASES RELIED ON BY THE ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 12 ASSESSEE HAVE ALSO NO APPLICATION TO THE FACTS OF THE PRESENT CASE IN VIEW OF OUR DISCUSSIONS MADE HEREINABOVE. 13. IN VIEW OF THE ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ), WHICH IS CONFIRMED AND THE G R O UND OF APPEAL OF THE ASSESSEE IS DISMISSED. 1 4 . THE SECOND GROUND OF APPEAL RELATING TO DISALLOWANCE OF OVERDUE INTEREST . THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE IS ISSUING CERTAIN LOANS AND IN CERTAIN CASES, INTEREST AMOUNT IS NOT RECEIVED FOR MO RE THAN 90 DAYS . THE ASSESSEE TREATED THE INTEREST AMOUNT NOT RECEIVED FOR MORE THAN 90 DAYS AS STICKY LOANS AND THE INTEREST WHICH IS ACCRUED AND ALREADY CREDITED IS REVERSED BY CREATING RESERVE ACCOUNT AND DEBITING THE SAME AS EXPENDITURE . THE ASSESSIN G OFFICER DENIED THE METHOD FOLLOWED BY THE ASSESSEE BY OBSERVING THAT ONCE THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, THOUGH THE ASSESSEE HAS NOT RECEIVED INTEREST AMOUNT, THE SAME HAS TO BE OFFERED FOR TAXATION AS PER METHOD FOLLOWED BY T HE ASSESSEE. ON APPEAL, LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 1 5 . ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 16. BEFORE US , LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE VERY SAME ISSUE HAS BEEN CONSIDERED BY THE COORDINATE BENCH OF THIS ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 13 TRIBUNAL IN THE CASE OF DCIT V. THE GANDHI CO - OP URBAN BANK LTD. IN ITA NO. 469/VIZAG/2012 DATED 30/11/2015 , WHEREIN THE TRIBUNAL BY FOLLOWING THE ORDER OF COORDINATE BENCH OF TH IS TRIBUNAL IN DURGA CO - OPERATIVE URBAN BANK LTD. DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 17. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE AUTHORITIES BELOW . 18 . THE CASE OF THE ASSESSEE IS THAT ON SOME OF THE LOANS, ASSESSEE HAD NOT RECEIVED INTEREST FOR MORE THAN 90 DAYS, THE SAME HAS BEEN TREATED AS STICKY LOANS AND THE INTEREST WHICH IS ACCRUED AND ALREADY CREDITED IS REVERSED BY CREATING RESERVE ACCOUNT AND DEBITING THE SAME AS EXPENDITURE . THE ASSE SSEE SUBMITTED BEFORE THE AUTHORITIES BELOW AND EVEN BEFORE US THAT WHENEVER INTEREST IS RECEIVED ON ACTUAL RECEIPT BASIS, THE SAME IS OFFERED FOR TAXATION . JUST BECAUSE, THE ASSESSEE FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING UNREALIZED INTEREST CANNOT BE ASSESSED AN INCOME UNLESS IT CAN BE SHOWN AS INCOME ACTUALLY RECEIVED . THE VERY SAME ISSUE HAS BEEN CONSIDERED BY THE COORDINATE BENCH OF THE TRIBUNAL AND DECIDED IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DE CISION OF ANOTHER COORDIN A TE BENCH IN THE CASE OF DURGA COOPERATIVE URBAN BANK (SUPRA) AND ALSO THE DECISION OF HONBLE SUPREME COURT IN ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 14 THE CASE OF UCO BANK V. CIT . THE RELEVANT PORTION OF THE ORDER IS AS FOLLOWS: - 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. TH E ASSESSEE IS A CO - OPERATIVE BANK, REGULARLY FOLLOWING MIXED SYSTEM OF ACCOUNTING, WHEREIN IT IS FOLLOWING CASH SYSTEM FOR RECOGNIZING INTEREST ON LOANS AND ADVANCES AND MERCANTILE SYSTEM OF ACCOUNTING FOR OTHER EXPENDITURES. AS STATED BY THE A.R., THE AS SESSEE IS BOUND TO FOLLOW THE GUIDELINES ISSUED BY THE RBI FOR INCOME RECOGNITION, ASSET CLASSIFICATION AND PROVISIONING. THEREFORE, THE ASSESSEE FOLLOWING THE GUIDELINES ISSUED BY THE RBI DID NOT RECOGNIZE THE INTEREST ACCRUED TO THE NPAS. THE A.O. WAS OF THE OPINION THAT SINCE, THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, IT SHOULD RECOGNIZE THE INTEREST RELATABLE TO NPAS, THEREFORE, MADE THE ADDITIONS. THE CIT(A), BY RELIED UPON THE JUDGEMENT OF THE ITAT, HYDERABAD BENCH IN THE CASE OF TC I FINANCE LTD. VS. ACIT (2004) 91 ITD 573 AND ALSO THE HONBLE MADRAS HIGH COURT JUDGEMENT IN THE CASE OF CIT VS. ANNAMALAI FINANCE LTD. (2005) 275 ITR 451, HELD THAT WHEN THE PRINCIPAL AMOUNT ITSELF IS DOUBTFUL OF RECOVERY, IT CANNOT BE SAID THAT ANY INTE REST ACCRUED ON SUCH PRINCIPAL AMOUNT IS RECOVERABLE. AS THE APPELLANT IS FOLLOWING THE ESTABLISHED METHOD OF ACCOUNTING AND RECOGNIZING THE INTEREST ON NPAS AT THE TIME OF REALIZATION, THE A.O. IS NOT CORRECT IN TAXING THE INTEREST ON NPAS ON ACCRUAL BAS IS. 7. WE HAVE GONE THROUGH THE REASON GIVEN BY THE CIT(A) AS WELL AS THE CASE LAWS RELIED UPON BY THE ASSESSEE. THE A.R. OF THE ASSESSEE AT THE TIME OF HEARING SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF ITAT VISAKHAPATNAM BENCH IN THE CASE OF DCIT VS. DURGA CO - OPERATIVE URBAN BANK LTD. (SUPRA). WE HAVE EXAMINED THE CASE LAW REFERRED BY THE A.R. IN THE LIGHT OF THE FACTS OF THE PRESENT CASE AND FIND THAT THE ITAT, VISAKHAPATNAM BENCH IN THE ABOVE MENTIONED CASE ON SIMILAR FACTS HEL D THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION IS REPRODUCED AS UNDER: 10. TURNING TO THE FACTS OF THE CASE BEFORE US, THE ASSESSEE HEREIN IS A COOPERATIVE BANK AND IT IS NOT IN DISPUTE THAT IT IS ALSO GOVERNED BY THE RESERVE BANK OF INDIA. HENCE THE DIRECTIONS WITH REGARD TO THE PRUDENTIAL NORMS ISSUED BY THE RESERVE BANK OF INDIA ARE EQUALLY APPLICABLE TO THE ASSESSEE AS IT IS APPLICABLE TO THE COMPANIES REGISTERED UNDER THE COMPANIES ACT. THE HON'BLE SUPREME COURT HAS HELD IN THE CASE OF S OUTHERN TECHNOLOGIES LTD (SUPRA), THAT THE PROVISION OF 45Q OF RESERVE BANK OF INDIA ACT HAS AN OVERRIDING EFFECT VIS - - VIS INCOME RECOGNITION PRINCIPLE UNDER THE COMPANIES ACT. HENCE SEC.45 Q OF THE RBI ACT SHALL HAVE OVERRIDING EFFECT OVER THE INCOME RE COGNITION PRINCIPLE FOLLOWED BY COOPERATIVE BANKS ALSO. HENCE THE ASSESSING OFFICER HAS TO FOLLOW THE RESERVE BANK OF INDIA DIRECTIONS 1998, AS HELD BY THE HON I BLE SUPREME COURT. ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 15 10.1 BASED ON THE PRUDENTIAL NORMS, THE ASSESSEE HEREIN DID NOT ADMIT THE IN TEREST RELATABLE TO NPA ADVANCES IN ITS TOTAL INCOME. THE HONBLE DELHI HIGH COURT IN THE CASE OF VASISTH CHAY VYAPAR LTD. (SUPRA) HAS HELD THAT THE INTEREST ON NPA ASSETS CANNOT BE SAID TO HAVE ACCRUED TO THE ASSESSEE. IN THIS REGARD, THE FOLLOWING OBSER VATIONS OF HON'BLE DELHI HIGH COURT IN THE ABOVE CITED CASE ARE RELEVANT: 'WHAT TO TALK OF INTEREST, EVEN THE PRINCIPLE AMOUNT ITSELF HAD BECOME DOUBTFUL TO RECOVER. IN THIS SCENARIO IT WAS LEGITIMATE MOVE TO INFER THAT INTEREST INCOME THEREUPON HAS NOT 'A CCRUED'. THE SAID DECISION OF THE HON'BLE DELHI HIGH COURT IS EQUALLY APPLICABLE TO THE ISSUE IN OUR HANDS. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY WITH THE DECISION OF THE LEARNED CIT (A) IN HOLDING THAT THE INTEREST INCOME RELATABLE ON NPA ADVANCES DID NOT ACCRUE TO THE ASSESSEE. ACCORDINGLY WE UPHOLD HIS ORDER. 8. AN IDENTICAL ISSUE CAME UP FOR CONSIDERATION BEFORE THE ITAT PUNE BENCH IN THE CASE OF VAIDYANATH URBAN CO - OP. BANK LTD. VS. CIT IN ITA NO.413/PN/2014 DATED 31.3.2015, WHEREIN THE ITAT UNDE R SIMILAR SET OF FACTS HELD AS UNDER: 10. TURNING TO THE FACTS OF THE CASE BEFORE US, THE ASSESSEE HEREIN IS A COOPERATIVE BANK AND IT IS NOT IN DISPUTE THAT IT IS ALSO GOVERNED BY THE RESERVE BANK OF INDIA. HENCE THE DIRECTIONS WITH REGARD TO THE PRUDEN TIAL NORMS ISSUED BY THE RESERVE BANK OF INDIA ARE EQUALLY APPLICABLE TO THE ASSESSEE AS IT IS APPLICABLE TO THE COMPANIES REGISTERED UNDER THE COMPANIES ACT. THE HONBLE SUPREME COURT HAS HELD IN THE CASE OF SOUTHERN TECHNOLOGIES LTD (SUPRA), THAT THE PRO VISION OF 45Q OF RESERVE BANK OF INDIA ACT HAS AN OVERRIDING EFFECT VIS - - VIS INCOME RECOGNITION PRINCIPLE UNDER THE COMPANIES ACT. HENCE SEC.45 Q OF THE RBI ACT SHALL HAVE OVERRIDING EFFECT OVER THE INCOME RECOGNITION PRINCIPLE FOLLOWED BY COOPERATIVE BAN KS ALSO. HENCE THE ASSESSING OFFICER HAS TO FOLLOW THE RESERVE BANK OF INDIA DIRECTIONS 1998, AS HELD BY THE HON'BLE SUPREME COURT. BASED ON THE PRUDENTIAL NORMS, THE ASSESSEE HEREIN DID NOT ADMIT THE INTEREST RELATABLE TO NPA ADVANCES IN ITS TOTAL INCOME. THE HON'BLE DELHI HIGH COURT IN THE CASE OF VASISTH CHAY VYAPAR LTD (SUPRA) HAS HELD THAT THE INTEREST ON NPA ASSETS CANNOT BE SAID TO HAVE ACCRUED TO THE ASSESSEE. IN THIS REGARD, THE FOLLOWING OBSERVATIONS OF HON'BLE DELHI HIGH COURT IN THE ABOVE CITED CASE ARE RELEVANT: ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 16 WHAT TO TALK OF INTEREST, EVEN THE PRINCIPLE AMOUNT ITSELF HAD BECOME DOUBTFUL TO RECOVER. IN THIS SCENARIO IT WAS LEGITIMATE MOVE TO INFER THAT INTEREST INCOME THEREUPON HAS NOT 'ACCRUED'. THE SAID DECISION OF THE HON'BLE DELHI HIGH COU RT IS EQUALLY APPLICABLE TO THE ISSUE IN OUR HANDS. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY WITH THE DECISION OF THE LEARNED CIT (A) IN HOLDING THAT THE INTEREST INCOME RELATABLE ON NPA ADVANCES DID NOT ACCRUE TO THE ASSESSEE. ACCORDINGLY WE UPHOLD HIS OR DER.' FOLLOWING THE AFORESAID DISCUSSION, WHICH HAS BEEN RENDERED ON AN IDENTICAL ISSUE UNDER SIMILAR CIRCUMSTANCES, WE FIND NO REASONS TO INTERFERE WITH THE ULTIMATE CONCLUSION OF THE CIT(A) IN DELETING THE IMPUGNED ADDITION RELATING TO INTEREST INCOME IN RESPECT OF NPAS. 9. THE HONBLE SUPREME COURT OF INDIA, IN THE CASE OF UCO BANK VS. CIT HAD AN OCCASION TO CONSIDER THE ISSUE. THE HONBLE SUPREME COURT, WHILE DEALING WITH SIMILAR ISSUE HELD AS UNDER: THE METHOD OF ACCOUNTING WHICH IS FOLLOWED BY TH E ASSESSEE - BANK IS MERCANTILE SYSTEM OF ACCOUNTING. HOWEVER, THE ASSESSEE CONSIDERS INCOME BY WAY OF INTEREST PERTAINING TO DOUBTFUL LOANS AS NOT REAL INCOME IN THE YEAR IN WHICH IT ACCRUES, BUT ONLY WHEN IT IS REALISED. A MIXED METHOD OF ACCOUNTING IS TH US FOLLOWED BY THE ASSESSEE - BANK. THIS METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE IS IN ACCORDANCE WITH ACCOUNTING PRACTICE. UP TO THE ASST. YR. 1978 - 79, THE CBDT'S CIRCULAR OF 6TH OCT., 1952 WOULD BE APPLICABLE; WHILE FROM THE ASST. YR. 1979 - 80, THE CBD T'S CIRCULAR OF 9TH OCT., 1984 IS MADE APPLICABLE. IN THE PRESENT CASE, THE ASSESSMENT WAS MADE ON THE BASIS OF THE CBDT'S CIRCULAR OF 9TH OCT., 1984, SINCE THE ASSESSMENT PERTAINS TO ASST. YR. 1981 - 82 TO WHICH THE CIRCULAR OF 9TH OCT., 1984, IS APPLICABLE . UNDER SUB - S. (2) OF S. 119, WITHOUT PREJUDICE TO THE GENERALITY OF THE BOARD'S POWER SET OUT IN SUB - S. (1), A SPECIFIC POWER IS GIVEN TO THE BOARD FOR THE PURPOSE OF PROPER AND EFFICIENT MANAGEMENT OF THE WORK OF ASSESSMENT AND COLLECTION OF REVENUE TO I SSUE FROM TIME TO TIME GENERAL OR SPECIAL ORDERS IN RESPECT OF ANY CLASS OF INCOMES OR CLASS OF CASES SETTING FORTH DIRECTIONS OR INSTRUCTIONS, NOT BEING PREJUDICIAL TO ASSESSEES, AS THE GUIDELINES, PRINCIPLES OR PROCEDURES TO BE FOLLOWED IN THE WORK RELAT ING TO ASSESSMENT. SUCH INSTRUCTIONS MAY BE BY WAY OF RELAXATION OF ANY OF THE PROVISIONS OF THE SECTIONS SPECIFIED THERE OR OTHERWISE. THE BOARD THUS HAS POWER, INTER AL/A, TO TONE DOWN THE RIGOUR OF THE LAW AND ENSURE A FAIR ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 17 ENFORCEMENT OF ITS PROVISIONS , BY ISSUING CIRCULARS IN EXERCISE OF ITS STATUTORY POWERS UNDER S. 119 WHICH ARE BINDING ON THE AUTHORITIES IN THE ADMINISTRATION OF THE ACT. UNDER S. 119(2)(A), HOWEVER, THE CIRCULARS AS CONTEMPLATED THEREIN CANNOT BE ADVERSE TO THE ASSESSEE. THUS, THE A UTHORITY WHICH WIELDS THE POWER FOR ITS OWN ADVANTAGE UNDER THE ACT IS GIVEN THE RIGHT TO FOREGO THE ADVANTAGE WHEN REQUIRED TO WIELD IT IN A MANNER IT CONSIDERS JUST BY RELAXING THE RIGOUR OF THE LAW OR IN OTHER PERMISSIBLE MANNERS AS LAID DOWN IN S. 119. THE POWER IS GIVEN FOR THE PURPOSE OF JUST, PROPER AND EFFICIENT MANAGEMENT OF THE WORK OF ASSESSMENT AND IN PUBLIC INTEREST. IT IS A BENEFICIAL POWER GIVEN TO THE BOARD FOR PROPER ADMINISTRATION OF FISCAL LAW SO THAT UNDUE HARDSHIP MAY NOT BE CAUSED TO T HE ASSESSEE AND THE FISCAL LAWS MAY BE CORRECTLY APPLIED. HARD CASES WHICH CAN BE PROPERLY CATEGORISED AS BELONGING TO A CLASS, CAN THUS BE GIVEN THE BENEFIT OF RELAXATION OF LAW BY ISSUING CIRCULARS BINDING ON THE TAXING AUTHORITIES. IF THE BOARD HAS CONS IDERED IT NECESSARY TO LAY DOWN A GENERAL TEST FOR DECIDING WHAT IS A DOUBTFUL DEBT, AND DIRECTED THAT ALL ITOS SHOULD TREAT SUCH AMOUNTS AS NOT FORMING PART OF THE INCOME OF THE ASSESSEE UNTIL REALIZED, THIS DIRECTION BY WAY OF A CIRCULAR CANNOT BE CONSID ERED AS TRAVELLING BEYOND THE POWERS OF THE BOARD UNDER S. 119. SUCH A CIRCULAR IS BINDING UNDER S. 119. THE CIRCULAR OF 9TH OCT., 1984, THEREFORE, PROVIDES A TEST FOR RECOGNISING WHETHER A CLAIM FOR INTEREST CAN BE TREATED AS A DOUBTFUL CLAIM UNLIKELY TO BE RECOVERED OR NOT. 10. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO APPLYING THE RATIOS OF THE JUDG MENTS DISCUSSED ABOVE, WE ARE OF THE VIEW THAT I NTEREST ON A LOAN WHOSE RECOVERY IS DOUBTFUL AND WHICH HAS NOT BEEN RECOVERED BY THE ASSES SEE - BANK, BUT HAS BEEN KEPT IN A SUSPENSE ACCOUNT AND HAS NOT BEEN BROUGHT TO THE P&L A/C OF THE ASSESSEE, COULD NOT BE INCLUDED IN THE INCOME OF THE ASSESSE. THE CIT(A) RIGHTLY DELETED THE ADDITIONS TOWARDS INTEREST ON NPAS. THERE IS NO ERROR OR INFIRMIT Y IN THE ORDER OF CIT(A). ACCORDINGLY, WE DIRECT THE A.O. TO DELETE THE ADDITIONS MADE TOWARDS INTEREST ON NPAS. IN VIEW OF THE ABOVE, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. 19 SO FAR AS ASSESSMENT YEARS 2007 - 08 & 2009 - 10 ARE CONCERNED , THE ASSESSING OFFICER HAS DENIED EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 80P(2)(A)(I) OF THE ACT . ON APPEAL, LD. COMMISSIONER OF INCOME ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 18 TAX (APPEALS) WITHOUT CONSIDERING THE OBJECTS OF THE SOCIETY AND FINDINGS GIVEN BY THE ASSESSING OFFICER , SIM PLY ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. THE VERY SAME ISSUE HAS BEEN CONSIDERED BY US IN THE ASSESSMENT YEAR 2008 - 09. IN VIEW OF OUR ABOVE DECISION, THE ASSESSM ENT YEARS UNDER CONSIDERATION ALSO , THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. WE , T HEREFORE REVERSE THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND THE GROUND RAISED BY THE REVENUE IS ALLOWED. 20 SO FA R AS ISSUE IN RESPECT OF OVER DUE INTEREST IS CONCERNED, THE ASSESSEE WAS NOT PRESSED THIS GROUND BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , T HEREFORE THIS GROUND RAISED BY THE REVENUE IS DISMISSED. 21 . SO FAR AS THE PROVISION IN RESPECT OF NPA IS CONCERNED, THE LD.COMMISSIONER OF INCOME TAX (APPEALS) DIRECTED THE ASSESSING OFFICER TO VERIFY AND DECIDE ACCORDINGLY , HENCE, W E FIND NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. 2 2. IN SO FAR AS STATUTORY RESE RVE OF RS. 10,000/ - IS CONCERNED, WHICH WAS NOT PRESSED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , T HEREFORE THE SAME IS DISMISSED. ITA NO. 13 7 , 473 & 474/VIZAG/2012 & CO 13 & 14/VIZAG/2013 THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOC IETY LTD., ELURU 19 23 . SO FAR AS, CROSS OBJECTIONS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2007 - 08 & 2009 - 10 ARE CONCERNED, IN VIEW OF OUR DECISION FOR THE ASSESSMENT YEAR 2008 - 09 , THE CROSS OBJECTIONS FILED BY THE ASSESSEE HAVE BECOME INFRUCTUOUS AND THE SAME ARE DISMISSED. 24 . IN THE RESULT, APPEAL S FILED BY THE ASSESSEE AS WELL AS REVENUE ARE PARTLY ALLOWED AND THE CROSS OBJEC TIONS FILED BY THE ASSESSEE ARE DISMISSED AS INFRUCTUOUS. O RDER PRONOUNCED IN THE OPEN COURT ON 23 RD DAY OF DEC EMBER 20 16 . S D/ - SD/ - ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /VISAKHAPATNAM: /DATED : 23 /12/2016 VG/ VR / COPY OF THE OR DER FORWARDED TO : - 1. / THE APPELLANT M/S. THE ELURU CO - OPERATIVE HOUSE MORTGAGE SOCIETY LTD., R.R. PETA, ELURU, WEST GODAVARI DIST. 2. / THE RESPONDENT THE ITO, WARD - 2, ELURU 3. / THE CIT, RAJAHMUNDRY 4 . ( ) / THE CIT(A) , VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // (SR.PRIVATE SECRETARY) , / ITAT, VISAKHAPATNAM
