Tirupati Campus Ph.II Co-Op Society Maryadit, Pune V. Income-tax Officer, Ward - 7(4), Pune

ITA 1429/PUN/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6857 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 11-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3); 80P

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM . / ITA NO.1429/PUN/2018 / ASSESSMENT YEAR : 2015-16 TIRUPATI CAMPUS PH.II CO - OP HOUSING SOCIETY MARYADIT, TIRUPATI CAMPUS PHASE II, ADARSHA COLONY, ROAD NO.2, VISHRANTWADI, PUNE 411015. PAN : AACAT3001H. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 7(4), PUNE. . / RESPONDENT ASSESSEE BY : SHRI MANOJ DESHPANDE. REVENUE BY : SHRI RAJESH GAWALI. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) PUNE-5, PUNE DA TED 24.05.2018 FOR THE ASSESSMENT YEAR 2015-16. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A CO-OPERATIVE SOCIETY, WHO ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2015-16 ON 28.08.2015 DECLARING TOTAL INCOME OF RS.16,85,525/-. THE CASE WAS SELECTED FOR SCRUT INY AND / DATE OF HEARING : 30.01.2019 / DATE OF PRONOUNCEMENT: 28.02.2019 2 ITA NO.1429/PUN/2018 THEREAFTER, ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT V IDE ORDER DT.30.06.2017 AND THE TOTAL INCOME WAS DETERMINED AT RS.16,35,530/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.24.05.2018 (IN APPEAL NO.PN/CIT(A)-5/ITO, WD-7(4), PUNE/10309/2017-18) DISMISSED THE APPEAL OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL AND HAS RAISED THE FOLL OWING GROUNDS : 1. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE OF THE AVAILABLE DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT, IN RESPECT OF INTEREST INCOME AGGREGATING TO RS.16,85,525/- EARNE D BY THE APPELLANT ON THE DEPOSITS PLACED WITH CO-OPERATIVE BANKS; BY HOLDING THAT CO-OPERATIVE BANKS ARE NOT CO-OPERATIV E SOCIETY AS CONTEMPLATED BY SECTION 80P(2)(D). 2. THE CIT(A) ALSO FAILED TO APPRECIATE THE FACT TH AT THE CO-OPERATIVE BANKS FROM THE APPELLANT HAS RECEIVED INTEREST ARE GOVERNED BY MULTI STATE COOPERATIVE SOCIETIES ACT 2002 AND ALSO IS GOVERNED BY THE PROVISIONS OF THE BANKING REGULATION ACT AS APP LICABLE TO THE COOPERATIVE SOCIETIES AS IT IS A COOPERATIVE SOCIET Y CARRYING ON BANKING BUSINESS. 3. THE LD. CIT(A) HAS NOT ALLOWED THE CLAIM FOR PRO PORTIONATE EXPENSES TO BE SET OFF AGAINST THE TAXABLE (INTERES T RECEIVED) AND EXEMPTED INCOME (MAINTENANCE CHARGES COLLECTED FROM MEMBERS EXEMPTED UNDER MUTUALITY CONCEPT). 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON PERU SING THE PROFIT AND LOSS ACCOUNT, AO NOTICED THAT ASSESSEE H AD EARNED INTEREST INCOME OF RS.16,85,525/- ON THE DEPOSITS HELD WITH SARASWAT CO-OPERATIVE BANK, TJSB BANK, COSMOS BANKS AN D IDBI BANK, WHICH WAS CLAIMED AS DEDUCTION U/S 80P(2)(D) OF THE A CT. AO WAS OF THE VIEW THAT THE INTEREST INCOME EARNED BY T HE ASSESSEE FROM CO-OPERATIVE BANK AND OTHER NATIONALIZED AND PRIV ATE BANKS IS NOT ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. HE ACCORD INGLY DENIED THE CLAIM OF DEDUCTION. AGGRIEVED BY THE ORDER OF A O, 3 ITA NO.1429/PUN/2018 ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD T HE ORDER OF AO BY OBSERVING AS UNDER : 5.5 I HAVE PERUSED CAREFULLY THE MATERIAL ON RECO RD AND THE CONTENTION OF THE APPELLANT. THE APPELLANT HAS CONT ENDED THAT THE ASSESSING OFFICER MADE THE ADDITION BY PLACING RELI ANCE ON THE DECISION OF HONBLE ITAT, MUMBAI IN THE CASE OF BA NDRA SHIV SAMRUDHI CHS LTD WHICH WAS OVERRULED BY THE HONBLE ITAT MUMBAI IN THE CASE OF LANDS END CO-OPERATIVE HOUSIN G SOCIETY VS. ITO WARD 16(1)(3), MUMBAI VIDE ORDER DATED 15.01.20 16 (3566/M/2014), AND THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER DESERVES TO BE DELETED. 5.6 I FIND THE ASSESSING OFFICER HAS MADE THE ADDIT ION AS HE HELD THAT, IN THE CASE UNDER CONSIDERATION, THE INTEREST INCOME EARNED FROM THE CO-OPERATIVE BANK DID NOT FALL UNDER THE P URVIEW OF A CO- OPERATIVE SOCIETY, AS A CO-OPERATIVE SOCIETY CONFI NES ITS ACTIVITIES TO ITS SHAREHOLDERS OR MEMBERS WHERE SUCH MEMBERS ARE BOUND TOGETHER BY BELONGING TO THE SAME EMPLOYER OR SAME SPECIFIC BUSINESS ACTIVITY OR RESIDING IN THE SAME COMPLEX O R SOCIETY. THE ASSESSING OFFICER HAS NOT MADE THE ADDITION ONLY ON THE BASIS OF THE DECISION OF HONBLE ITAT, MUMBAI IN THE CASE OF BAN DRA SHIV SAMRUDHI CHS LTD. (SUPRA) BUT HAS USED IT TO BUTTRE SS HIS STAND. THE ASSESSING OFFICER HAS CLEARLY ARRIVED AT THE CO NCLUSION THAT, THE INTEREST EARNED FROM THE CO-OPERATIVE BANK DID NOT FALL UNDER THE PURVIEW OF CO-OPERATIVE SOCIETY FOR THE REASONS M ENTIONED IN THE ASSESSMENT ORDER AND AS STATED ABOVE. THE INTEREST IS EARNED NOT ONLY FROM CO-OPERATIVE BANKS BUT ALSO FROM OTHER NA TIONALIZED AND PRIVATE BANKS. THEREFORE, THE CASE UNDER CONSIDERA TION IS ALSO DISTINGUISHABLE FROM BOTH THE DECISIONS OF HONBLE ITAT MUMBAI (SUPRA) RELIED UPON BY THE APPELLANT. IN BOTH THE CASES THE INTEREST EARNED IS FROM OTHER CO-OPERATIVE SOCIETIES. IN VI EW OF THIS, THE CONTENTION OF THE APPELLANT LACKS STRENGTH AND IS T HEREFORE, DISMISSED. ACCORDINGLY, GROUND NO.1 IS DISMISSED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 4. BEFORE ME, LD.A.R. AT THE OUTSET, SUBMITTED THAT THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DENIAL OF CLAIM OF D EDUCTION U/S 80P(2)(D) OF THE ACT. LD.A.R. SUBMITTED THAT THE CLAIM OF DEDUC TION WAS DENIED BY THE AO FOR THE REASON THAT SARASWAT CO-OPERATIVE BANK IS NOT A CO-OPERATIVE SOCIETY. HE SUB MITTED THAT ON IDENTICAL FACTS IN THE CASE OF M/S. THE VEER COOPERATIV E GROUP 4 ITA NO.1429/PUN/2018 HOUSING SOCIETY LTD., VS. ITO, THE DELHI BENCH OF THE TRIBUNA L HAS HELD THAT SARASWAT CO-OPERATIVE BANK TO BE A CO-OPERA TIVE SOCIETY AND THEREFORE INCOME EARNED FROM ITS INVESTMENT TO BE CLA IMED AS DEDUCTION U/S 80P OF THE ACT. HE POINTED TO THE RELEVAN T PARAS OF THE SAID ORDER AND ALSO PLACED IN RECORD THE COPY OF THE SAID ORDER. WITH RESPECT TO INTEREST EARNED FROM OTHER BANKS, HE RE LIED ON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF LA DY RATAN TOWER COOPERATIVE HOUSING SOCIETY LIMITED VS. ITO IN ITA NO.1152/MUM/2018 DATED 09.08.2018 WHEREIN FOLLOWING THE ORD ER IN THE CASE OF KALIANDAS UDYOG BHAVAN PREMISES CO-OPER ATIVE SOCIETY LTD., (IN ITA NO.6547/MUM/2017 DATED 25.04.2018), THE ISSUE WAS DECIDED IN ASSESSEES FAVOUR. HE THEREFORE SU BMITTED THAT THE ISSUE IN THE PRESENT CASE BEING IDENTICAL TO THE CASES RELIED UPON BY HIM, THE ISSUE BE DECIDED IN ASSESSEES FAV OUR. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESP ECT TO DENIAL OF CLAIM OF DEDUCTION U/S 80P(2)(D) OF THE ACT. THE CLA IM OF DEDUCTION BY THE ASSESSEE WAS DENIED BY THE AO WITH R ESPECT TO THE INTEREST INCOME EARNED FROM SARASWAT CO-OPERATIVE B ANK ON THE GROUND THAT THE SAME IS NOT A CO-OPERATIVE SOCIETY . I FIND THAT THE CO-ORDINATE BENCH OF THE DELHI TRIBUNAL IN THE CASE O F M/S. THE VEER COOPERATIVE GROUP HOUSING SOCIETY LIMITED (SUPR A) HAS HELD THAT SARSWAT CO-OPERATIVE BANK TO BE A CO-OPERAT IVE SOCIETY AND THE INTEREST EARNED THEREIN TO BE ENTITLED TO CLAIM D EDUCTION 5 ITA NO.1429/PUN/2018 U/S 80P(2)(D) OF THE ACT. I FURTHER FIND THAT CO-ORDINATE B ENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF LADY RATAN TOWER CO - OPERATIVE HOUSING SOCIETY LTD., (SUPRA) AND AFTER RELYING ON THE DECISION IN THE CASE OF KALIANDAS UDYOG BHAVAN PREMISES CO - OPERATIVE SOCIETY LTD., (SUPRA) HAS HELD THAT THE INTERES T EARNED ON INVESTMENTS HELD WITH THE CO-OPERATIVE BANKS WOULD BE E LIGIBLE FOR DEDUCTION U/S 80P(2)(D) OF THE ACT. BEFORE ME, REVENUE HAS NOT POINTED OUT ANY CONTRARY BINDING DECISION NOR HAS PLACED ON RECORD ANY MATERIAL TO DEMONSTRATE THAT THE AFORESAID DECISIONS HAVE BEEN SET ASIDE/ STAYED/OVER-RULED BY ANY HIGHER JUDICIAL FORU M. IN VIEW OF THE AFORESAID FACTS, I, FOLLOWING THE AFORESAID DECISIO NS, HOLD INTEREST INCOME OF RS.16,85,525/- EARNED BY THE ASSE SSEE ON THE DEPOSITS HELD WITH BANKS WOULD BE ELIGIBLE FOR DEDUCTIO N U/S 80P(2)(D) OF THE ACT. I THEREFORE DIRECT SO. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON THE 28 TH DAY OF FEBRUARY, 2019. S SD/- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 28 TH FEBRUARY, 2019. YAMINI 6 ITA NO.1429/PUN/2018 #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-PUNE-5, PUNE. PR. CIT, PUNE-4, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.