The Asst. Commissioner of Income Tax, Circle-7(1), Hyderabad V. M/s.Metrocity Criminal Courts Employees Mutually Aided Co-op Credit Society Ltd., Hyderabad

ITA 1448/HYD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87325 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 29-01-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2013
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Gift; Business income; Assessment record
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A NOS. 1328, 1329 & 1330/HYD/2012 ASSESSMENT YEARS: 2007-08, 2008-09 & 2009-10 THE AS ST. COMMISSIONER OF INCOME TAX, CIRCLE-7(1), HYDERABAD VS M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOPERATIVE CREDIT SOCIETY LTD., RED HILLS, NAMPALLY, HYDERABAD [PAN: AAABM0284E] I.T.A. NO. 1448/HYD/2013 ASSESSMENT YEAR: 2010-11 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-7(1), HYDERABAD VS M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOPERATIVE CREDIT SOCIETY LTD., RED HILLS, NAMPALLY, HYDERABAD [PAN: AAABM0284E] (APPELLANT) (RESPONDENT) FOR REVENUE : S HRI R AMA KRISHNA BANDI , DR FOR ASSESSEE : S HRI K.A . SAI PRASAD , AR DATE OF HEARING : 29 - 0 1 - 201 5 DATE OF PRONOUNCEMENT : 04 - 03 - 2015 O R D E R PER BENCH : THESE ARE REVENUE APPEALS FILED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX(APPEALS)-VI, HYDERABAD F OR THE ASSESSMENT YEARS (AYS) 2007-08, 2008-09, 2009-10 & 2010-11. T HERE WAS A COMMON ORDER BY CIT(A)-VI, HYDERABAD DATED 001-06-2 011 FOR AYS. ITA NOS. 1328, 1329, 1330/HYD/2012 & 1448/HYD/2013 M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOP CREDIT SOCIETY LTD. , :- 2 -: 2007-08 TO 2009-10 WHEREAS CIT(A)-VI, HAS PASSED TH E ORDER IN AY 2010-11 DT.20-07-2013. SINCE COMMON ISSUES ARE INV OLVED, THESE APPEALS ARE CONSIDERED TOGETHER DISPOSED-OFF BY THI S COMMON ORDER. AYS. 2007-08, 2008-09 & 2009-10: 2. THE REVENUE HAS RAISED THE FOLLOWING COMMON GROU NDS IN ALL THE IMPUGNED ASSESSMENT YEARS. '1. THE ORDER OF THE LEARNED CIT(APPEALS) IS ERRONE OUS IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN ALLOWIN G THE ASSESSEE'S APPEAL. 2. THE LEARNED CIT(APPEALS) OUGHT TO HAVE UPHELD T HE DISALLOWANCE MADE U/S.80P(4) AS THE ABOVE PROVISION DOES NOT AP PLY TO A CO- OPERATIVE BANK OTHER THAN A PRIMARY CO-OPERATIVE A GRICULTURAL AND RURAL DEVELOPMENT BANK OR PRIMARY AGRICULTURAL SOC IETY. 3. THE LEARNED CIT(A)-VI HAS ERRED IN TREATING THE ASSESSEE AS A CO- OPERATIVE SOCIETY RATHER THAN A CO-OPERATIVE SOCIE TY (SIC) AS THE ASSESSEE IS CARRYING OUT BANKING ACTIVITIES'. 3. BRIEFLY STATED, ASSESSEE IS A CO-OPERATIVE SOCIE TY REGISTERED UNDER THE AP MUTUALLY AIDED CO-OPERATIVE SOCIETIES ACT (A PMACS ACT) WITH MEMBERSHIP CONSISTING OF ALL CRIMINAL COURT EMPLOYE ES OF TWIN CITIES AND OTHER TOWNS. IT COLLECTS INTERESTS FROM ITS MEMBER S ON LOANS PROVIDED AND RECEIVES INTERESTS FROM BANKS/ SOCIETIES WHERE THE IT HAS PLACED FIXED DEPOSITS. IN THE IMPUGNED ASSESSMENT YEARS, ASSESSEE CLAIMED DEDUCTION U/S.80P(2)(A)(I) OF THE INCOME TAX ACT. THE ASSESSING OFFICER IN THE THREE ASSESSMENT YEARS WITHOUT ANALYZING THE ISSUE, RELYING ON THE CBDT CIRCULAR NO. F.173(3)/44/2009-ITA-IDT.20-09-20 10 HELD THAT ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S.80P. LD .CIT(A) ANALYSED THE CIRCULAR NO.06/2010 RELIED BY THE ASSESSING OFFICER AND NOTICED THAT THE SUBJECT MATTER IN THE CIRCULAR IS WITH REFERENCE TO ELIGIBILITY OF DEDUCTION ITA NOS. 1328, 1329, 1330/HYD/2012 & 1448/HYD/2013 M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOP CREDIT SOCIETY LTD. , :- 3 -: U/S.80P TO REGIONAL RURAL BANKS AND DOES NOT APPLY TO ASSESSEE'S CASE. FURTHER, LD.CIT(A) ANALYSED THE FACTS OF THE CASE W ITH REFERENCE TO THE DECISION OF THE CO-ORDINATE BENCH AT ITAT, BANGALOR E IN THE CASE OF ACIT VS. M/S.BANGALORE COMMERCIAL TRANSPORT CREDIT CO-OP ERATIVE SOCIETY LTD., IN ITA NO.1069/BANG/2010 AND HELD THAT ASSESS EE IS A CO- OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PROVID ING CREDIT FACILITIES TO ITS MEMBERS AND NOT A CO-OPERATIVE BANK. THE DETAI LED ORDER OF CIT(A) IN PARA NO.5.4 TO 5.8 IS AS UNDER: '5.4 THE ITAT, BANGALORE IN THE DECISION CITED BY T HE ASSESSEE HAS LAID DOWN THE FOLLOWING DIFFERENCE BETWEEN A COOPERATIVE BANK AND A COOPERATIVE SOCIETY: NATURE COOPERATIVE SOCIETY REGISTERED UNDER BANKING REGULATION ACT, 1949 COOPERATIVE SOCIETY REGISTERED UNDER KARNATAKA COOPERATIVE SOCIETY ACT, 1959 REGISTRATION UNDER THE BANKING REGULATION ACT, 1949 AND COOPERATIVE SOCIETIES ACT, 1959 COOPERATIVE SOCIETIES ACT, 1959 NATURE OF BUSINESS 1.AS DEFINED IN SECTION 6 OF BANKING REGULATION 2.CAN OPEN SAVINGS BANK ACCOUNT, CURRENT ACCOUNT, OVERDRAFT ACCOUNT, ISSUE LETTER OF CREDIT, DISCOUNTING BILLS OF EXCHANGE, ISSUE CHEQUES, DEMAND DRAFTS (DD), PAY ORDERS, GIFT CHEQUES, LOCKERS, BANK GUARANTEES ETC. 3.COOPERATIVE BANKS CAN ACT AS CLEARING AGENT FOR CHEQUES, DDS, PAY ORDERS AND OTHER FORMS. 4.BANKS ARE BOUND TO FOLLOW THE RULES, REGULATIONS AND DIRECTIONS ISSUED BY RESERVE BANK OF INDIA. 1.AS PER THE BYE LAWS OF COOPERATIVE SOCIETY. 2.SOCIETY CANNOT OPEN SAVINGS BANK ACCOUNT, CURRENT ACCOUNT, ISSUE LETTER OF CREDIT, DISCOUNTING BILLS OF EXCHANGE, ISSUE CHEQUES, DEMAND DRAFTS, PAY ORDERS, GIFT CHEQUES, LOCKERS, BANK GUARANTEES ETC. 3.SOCIETY CANNOT ACT AS CLEARING AGENT, FOR CHEQUES, DDS, PAY ORDERS AND OTHER FORMS. 4.SOCIETY ARE BOUND BY RULES AS SPECIFIED BY IN THE COOPERATIVE ITA NOS. 1328, 1329, 1330/HYD/2012 & 1448/HYD/2013 M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOP CREDIT SOCIETY LTD. , :- 4 -: SOCIETIES ACT. FILING OF RETURNS COOPERATIVE BANKS HAVE TO SUBMIT ANNUAL RETURN TO RBI EVERY YEAR. SOCIETY HAS TO SUBMIT THE ANNUAL RETURN TO REGISTRAR OF SOCIETIES. INSPECTION RBI HAS THE POWER TO INSPECT ACCOUNTS AND OVERALL FUNCTIONING OF THE BANK REGISTRAR HAS THE POWER TO INSPECT ACCOUNTS AND OVERALL FUNCTIONING OF THE BANK. PART V PART V OF THE BANKING REGULATION ACT IS APPLICABLE TO COOPERATIVE BANKS PART V OF THE BANKING REGULATION ACT IS NOT APPLICABLE TO COOPERATIVE BANKS USE OF WORDS THE WORK 'BANK', 'BANKER', 'BANKING' CAN BE USED BY A COOPERATIVE BANK THE WORD 'BANK', 'BANKER', 'BANKING' CANNOT BE USED BY A COOPERATIVE SOCIETY. 5.5 EXAMINED ON THESE TOUCHSTONES, I FIND THAT: A) THE ASSESSEE IS REGISTERED UNDER THE ANDHRA PRA DESH MUTUALLY AIDED COOPERATIVE SOCIETIES ACT, 1995 VIDE REGISTR ATION CERTIFICATE DATED 19.2.1995. B) THE ASSESSEE HAS CLAIMED, AND THE AO HAS NOT BR OUGHT ON RECORD ANY EVIDENCE TO THE CONTRARY, THAT IT IS NOT ENGAG ED IN THE ACTIVITIES OF OPENING SAVINGS BANK ACCOUNTS, CURRENT ACCOUNTS , ISSUING LETTER OF CREDIT, DEMAND DRAFTS, PAY ORDERS, BANK GUARANTEES ETC. WHICH WOULD LEND IT THE CHARACTER OF A BANK. C) I HAVE CALLED FOR THE ASSESSMENT RECORDS AND A PERUSAL OF THE ANNUAL REPORT DOES NOT REFLECT ANY ACTIVITY OF THI S KIND. D) IT HAS BEEN SUBMITTING ITS ANNUAL REPORT TO THE REGISTRAR OF SOCIETIES AND NOT TO THE RBI. 5.6 IN VIEW OF THE ABOVE, I AM OF THE VIEW THAT THE ASSESSEE IS A COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PROV IDING CREDIT FACILITY TO ITS MEMBERS, AND THAT IT IS NOT A COOPERATIVE BANK. 5.7 THE ITAT, BANGALORE HAS HELD IN THE CASE OF BAN GALORE COMMERCIAL TRANSPORT CREDIT COOPERATIVE SOCIETY LTD: 'IF THE INTENTION OF THE LEGISLATURE WAS NOT TO GR ANT DEDUCTION U/S.80P(2)(A)(I) TO COOPERATIVE SOCIETIES CARRYING ON THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS, THEN T HIS SECTION WOULD ITA NOS. 1328, 1329, 1330/HYD/2012 & 1448/HYD/2013 M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOP CREDIT SOCIETY LTD. , :- 5 -: HAVE BEEN DELETED. THE NEW PROVISION TO SEC.80P(4 ) WHICH IS BROUGHT INTO STATUTE IS APPLICABLE TO COOPERATIVE BANKS AND NOT TO CREDIT COOPERATIVE SOCIETIES. THE INTENTION OF TH E LEGISLATURE OF BRING COOPERATIVE BANKS INTO THE TAXATION STRUCTURE WAS MAINLY TO BRING IN PAR WITH COMMERCIAL BANKS. SINCE THE ASSESSEE IS A COOPERATIVE SOCIETY AND NOT A COOPERATIVE BANK, THE PROVISIONS OF SEC.80P(4) WILL NOT HAVE APPLICABLE IN THE ASSESSEE'S CASE AND THE REFORE IT IS ENTITLED FOR DEDUCTION U/S.80P(2)(A)(I) OF THE ACT .' 5.8 RESPECTFULLY FOLLOWING THE DECISION OF THE ITAT AND ON THE BASIS OF THE FACTS IN THE CASE OF THE PRESENT ASSESSEE, THE AO IS DIRECTED TO ALLOW DEDUCTION U/S.80P TO THE ASSESSEE. GROUND NO.2 IS ALLOWED FOR ALL THE 3 YEARS'. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO N OT SEE ANY REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A). OBVIOUSL Y, ASSESSEE IS A CO- OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PROVID ING CREDIT FACILITIES TO ITS MEMBERS. THERE IS NO DISPUTE WITH REFERENCE TO THE TRANSACTIONS WITH THE MEMBERS, AS ASSESSING OFFICER HAS NOT CONSIDERE D THAT ISSUE AT ALL IN THE ORDER. THEREFORE, ASSESSEE BEING A CO-OPERATIV E SOCIETY REGISTERED UNDER THE APMACS ACT IS ELIGIBLE FOR DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT. NOT ONLY THAT, ASSESSEE IS ALSO ELIGIBLE FOR DEDUCTION U/S.80P(2)(D) ON THE INCOMES RECEIVED FROM OTHER ELIGIBLE CO-OPER ATIVE SOCIETIES/BANKS. THEREFORE, ON THE FACTS OF THE CASE, WE DO NOT SEE ANY REASON TO DISALLOW THE DEDUCTION U/S.80P. REVENUE HAS RAISED THE GROU NDS THAT PROVISIONS OF U/S.80P(4) WERE APPLICABLE TO ASSESSEE. WE DO N OT SEE ANY REASON TO CONSIDER THIS GROUND AS THE RESTRICTIONS BROUGHT OU T SUBSEQUENTLY U/S.80P(4) IS APPLICABLE IN THE CASE OF A CO-OPERAT IVE BANK NOT A CO- OPERATIVE SOCIETY. THIS ISSUE IS ALSO DISCUSSED IN THE CO-ORDINATE BENCH AT HYDERABAD DECISION IN THE CASE OF 'THE ADVOCATES MUTUALLY AIDED COOP SOCIETY, HYDERABAD' PRONOUNCED ON 20-02-2015 A S UNDER: '22.1 THE GROUND NO.3 REGARDING DEDUCTION UN DER SECTION 80P(2)(D) IS IN RESPECT OF INTEREST RECEIVED FROM COOPERATIVE SOCIETIES AND THE COOPERATIVE BANKS. WE ARE UNABLE TO UNDER STAND WHY THE ITA NOS. 1328, 1329, 1330/HYD/2012 & 1448/HYD/2013 M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOP CREDIT SOCIETY LTD. , :- 6 -: COOPERATIVE BANKS ARE NOT CONSIDERED AS COOPERATIV E SOCIETIES IN BANKING BUSINESS. THE SUB-SECTION (4) INTRODUCED B Y FINANCE ACT, 2006 W.E.F. 1.4.2007 IS AS UNDER : (4) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN RELATION TO ANY COOPERATIVE BANK OTHER THAN A PRIMARY AGRIC ULTURAL CREDIT SOCIETY OR A PRIMARY COOPERATIVE 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 T HEM IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949) . (B)PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEV ELOPMENT 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 DEVELO PMENT ACTIVITIES. 22.1. AS PER THIS SECTION, THE EXEMPTION PROVIDED UNDER SUB- SECTION (2) OR SUB-SECTION (3) DOES NOT APPLY TO T HE INCOMES OF THE COOPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL COOPERATIVE SOCIETY OR A PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. HOWEVER, THE ABOVE PROVISION APP LICABLE IN THE CASE OF COOPERATIVE BANK IS NOT IN RESPECT OF INTE REST RECEIVED FROM COOPERATIVE BANKS BY A COOPERATIVE CREDIT SOCIETY/ COOPERATIVE SOCIETY. SECTION 80P(2)(D) IS APPLICABLE TO THE AS SESSEE SOCIETY IN RESPECT OF INCOMES BY WAY OF INTEREST OR DIVIDENDS RECEIVED BY THE COOPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER COOPERATIVE SOCIETY. THEREFORE, IN THE CASE OF THE ASSESSEE SO CIETY, SUB-SECTION (4) IS NOT APPLICABLE AND DEDUCTION UNDER SECTION 80P(2)(D) IS CERTAINLY ELIGIBLE TO ASSESSEE. IN THE ASSESSMENT OF A COOPERATIVE BANK, THE INCOMES MAY NOT BE EXEMPT AFTER 01.04.20 07 BY VIRTUE OF SUB-SECTION (4), BUT ASSESSEE IS NOT A COOPERATIVE BANK. THEREFORE, THE REVENUE GROUND IS NOT ONLY ILLOGICAL BUT ALSO NOT SUPPORTED BY THE FACTS OF THE CASE. MOREOVER AS SEEN, THE RECOM MENDATION MADE BY THE A.O. TO THE LD. CIT IN THEIR INTERNAL CORRE SPONDENCE IS EXTRACTED AS A GROUND. THIS ALSO INDICATES NON-APP LICATION OF MIND ITA NOS. 1328, 1329, 1330/HYD/2012 & 1448/HYD/2013 M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOP CREDIT SOCIETY LTD. , :- 7 -: EITHER BY THE A.O. OR BY HIGHER AUTHORITY LIKE CIT . THIS SORRY STATE OF AFFAIRS SHOULD COME TO AN END AND OFFICERS SHOULD ACT RESPONSIBLY WHILE PREFERRING SECOND APPEAL ON THE ORDERS OF TH E SENIOR OFFICER LIKE LD. CIT(A). REVENUE APPEAL IS DISMISSED'. 5. IN VIEW OF THE ABOVE, WE DO NOT SEE ANY MERIT IN THE REVENUE'S GROUNDS. ACCORDINGLY, REVENUE'S APPEALS ARE DISMIS SED. AY. 2010-11: 6. IN THE ASSESSMENT YEAR, ASSESSING OFFICER HAD PA SSED LITTLE DETAILED ORDER HOLDING THAT ASSESSEE HAS VIOLATED THE A.P.CO -OPERATIVE SOCIETIES ACT, 1964, THEREFORE NOT ELIGIBLE FOR DEDUCTION. A SSESSING OFFICER HOWEVER, ALLOWED THE DEDUCTION U/S.80P(2)(D) OF AN AMOUNT OF RS.51,45,018/-. LD.CIT(A) FOLLOWING THE PREDECESSO R'S ORDER IN EARLIER YEARS, HOWEVER, ELABORATELY DISCUSSED THE ISSUE AND RE-WORKED OUT THE DEDUCTION U/S.80P(2)(A)(I) AS WELL AS 80P(2)(D). T HE ORDER OF LD.CIT(A) IN PARA NO.5.3 TO PARA 8 IS AS UNDER: '5.3 PERUSED THE OBSERVATIONS OF THE ASSESSING OFF ICER AND THE SUBMISSIONS OF THE APPELLANT. AS COULD BE SEEN FR OM THE FACTS OF THE CASE, THE APPELLANT SOCIETY IS MUTUALLY AIDED COOP ERATIVE SOCIETY, GOVERNED BY THE APMACS ACT, 1995, BUT NOT THE COOP ERATIVE SOCIETIES ACT. HENCE, THE REASONS ATTRIBUTED BY T HE ASSESSING OFFICER, FOR REJECTING THE DEDUCTION U/S.80P(2)(A) (I) ARE NOT APPLICABLE TO THE APPELLANT SOCIETY. THIS HAS BEEN CLEARLY H ELD BY MY PREDECESSOR, IN THE CASE OF THE APPELLANT'S OWN CA SE FOR EARLIER ASSESSMENT YEARS. HENCE, THE REASONS ASSIGNED BY THE ASSESSING OFFICER FOR REJECTING THE CLAIM U/S.80P(2)(A)(I) A RE NOT APPLICABLE TO THE ASSESSEE. REGARDING THE DISALLOWANCE OF THE SAID CLAIM BY VIRTUE OF THE AMENDMENT TO 80P(4) IS ALSO CLARIFIED IN THE D ECISION OF HON'BLE ITAT, BANGALORE, IN THE CASE OF M/S.BANGALORE COMM ERCIAL TRANSPORT CREDIT COOPERATIVE SOCIETY LTD (ITA NO.1 069/BANG/2010 DT.08.04.2011), WHEREIN IT WAS CLARIFIED THAT THE NEW PROVISO TO ITA NOS. 1328, 1329, 1330/HYD/2012 & 1448/HYD/2013 M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOP CREDIT SOCIETY LTD. , :- 8 -: SEC.80P(4) WHICH IS BROUGHT INTO STATUE, IS APPLIC ABLE ONLY TO COOPERATIVE BANKS AND NOT CREDIT COOPERATIVE SOCIE TIES. CONSIDERING THE FINDING GIVEN BY THE ITAT, BANGALORE (SUPRA), IT IS HELD THAT THE APPELLANT SOCIETY BEING A COOPERATIVE CREDIT SOCIE TY IS ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I). HOWEVER, IT MAY BE RE LEVANT TO NOTE THAT IN THIS CASE, WHILE FURNISHING THE RETURN OF INCOM E, THE APPELLANT CLAIMED DEDUCTION OF RS.1,72,46,463/- U/S.80P(2)(A )(I) WHICH WAS DISALLOWED BY THE ASSESSING OFFICER. THE SAID DED UCTION IS RECOMPUTED IN THE REVISED COMPUTATION AT RS.1,66,1 3,779/-, WHICH IS AS UNDER, WHICH APPEARS TO BE BASED ON THE CORR ECT FACTS/INFORMATION. A) GROSS/TOTAL RECEIPTS : RS.5,35,97,746 (I) BUSINESS RECEIPTS : RS.3,82,77,265 (II) OTHER SOURCES : RS.1,53,20,481 A) INTEREST FROM BANK & OTHERS RS.1,39,78,009 B) INTEREST FROM CO.OP BANKS RS.13,42,472 (III) NET PROFIT FROM ALL SOURCES : RS.2,32,63,447 DEDUCTION U/S.80P(2)(A)(I) : BUSINESS RECEIPTS X NET PROFIT GROSS RECEIPTS : 38277265X23263447: RS.1,66,13,779/- 53597746 ACCORDINGLY, THE CLAIM OF DEDUCTION U/S.80P(2)(A)(I ) IS RESTRICTED TO RS.1,66,13,779/- AND THIS GROUND OF APPEAL IS TREATED AS PARTLY ALLOWED. 6.0 THE NEXT GROUND OF APPEAL RELATES TO RESTRICTI ON OF CLAIM OF DEDUCTION U/S.80P(2)(D). AS PER THE APPELLANT, TH E ASSESSING OFFICER HAS ALLOWED THE DEDUCTION U/S.80P(2)(D) TO RS.51,4 5,018/- AS AGAINST THE CLAIM OF RS.1,72,46,463/- MADE U/S.80P (2)(A)(I) OF THE INCOME-TAX ACT, WHEREBY A SEPARATE GROUND OF APPEA L WAS RAISED BY THE APPELLANT RELATING TO THE CLAIM. HOWEVER, THI S CLAIM STAND REVISED, ON ACCOUNT OF RECONSIDERING THE FACTS TO THE CASE IN THE ITA NOS. 1328, 1329, 1330/HYD/2012 & 1448/HYD/2013 M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOP CREDIT SOCIETY LTD. , :- 9 -: BACKGROUND OF CLAIM OF DEDUCTION U/S.80P(2)(A)(I), WITH THE SUPPORT OF JUDICIAL DECISIONS. 6.1 AS PER THE APPELLANT, THE ELIGIBLE DEDUCTION U /S.80P(2)(D) HAS BEEN QUANTIFIED AT RS.7,03,784/-, WHICH HAS BEEN W ORKED OUT AS UNDER: 1. TOTAL INTEREST RECEIPTS RS. 1,26,84,283 2. INTEREST RECEIPTS FROM CO.OP SOCIETIES RS. 13,42,472 3. INCOME FROM OTHER SOURCES RS. 66,49,668 (TOTAL PROFITS PROFITS FROM BUSINESS) I.E. RS.2,32,63,447 RS. 1,66,13,779 DEDUCTION U/S.80P(2)(D) : INTEREST FROM COOP SOCIETIES X INCOME FROM OTHER SO URCES TOTAL INTEREST RECEIPTS 1342472X6649668 : RS. 7,03,784 12684283 BASED ON THE FACTS OF THE CASE, THE QUANTIFICATION OF THE DEDUCTION U/S.80P(2)(D) IN THIS CASE IS JUSTIFIED AND UPHELD AT RS.7,03,784/-. HOWEVER, THE FACT REMAINS THAT THE TOTAL DEDUCTION CLAIMED U/S.80P BY THE APPELLANT WHILE FURNISHING THE RETURN OF INC OME WAS AT RS.1,72,46,463/- AND BY INCLUDING THE DEDUCTION U/S .80P(2)(A)(I) TO THE EXTENT OF RS.1,66,13,779/- AND RS.7,03,784/-, I N THE REVISED COMPUTATION, THE TOTAL CLAIM MADE BY THE APPELLANT (16613739 + 703784) AMOUNTED TO RS.17317523/- WHICH EXCEEDS THE TOTAL CLAIM MADE IN THE ORIGINAL RETURN OF INCOME (RS.1,72,46,4 63/-). THUS, THE CLAIM OF THE DEDUCTION U/S.80P(2)(A)(I) AND THE CLA IM FOR DEDUCTION U/S.80P(2)(D) IS RESTRICTED TO THE TOTAL AMOUNTS OF DEDUCTION OF RS.1,72,46,463/-, AS CLAIMED IN THE ORIGINAL RETUR N OF INCOME, IN ORDER TO AVOID THE SITUATION THAT THE ASSESSED INCOME IS LESS THAN THE RETURNED INCOME. 7.0 THE APPELLANT MADE THE ADDITIONAL CLAIM OF DEDU CTION U/S.80P(2)(C) BEING ELIGIBLE FOR DEDUCTION, AS COOP ERATIVE CREDIT SOCIETY, WHICH WAS OMITTED TO BE CLAIMED IN THE ORI GINAL RETURN OF ITA NOS. 1328, 1329, 1330/HYD/2012 & 1448/HYD/2013 M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOP CREDIT SOCIETY LTD. , :- 10 -: INCOME. THOUGH, ON FACTS THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S.80P(2)(C), FOR THE REASONS MENTIONED FOR RESTRI CTING THE ALLOWANCE U/S.80P, WHEREIN THE CLAIMS MADE IN REVISED COMPUTA TION/GROUNDS OF APPEAL EXCEEDS THE CLAIMS MADE WHILE FURNISHING THE RETURN OF INCOME, THE ADDITIONAL CLAIM OF THE APPELLANT IS NO T HELD TO BE ENTERTAINABLE AT THIS STAGE. HENCE, THE ADDITIONAL CLAIM THOUGH ACCEPTED IN PRINCIPLE, THE DEDUCTION IS RESTRICTED TO RS.1,72,46,463/- TO KEEP THE RETURNED INCOME FLOATING AT RS.60,16,9 84/-. HENCE, THIS ADDITIONAL GROUND IS TREATED TO HAVE BEEN DIS ALLOWED, FOR STATISTICAL PURPOSE. 8.0 IN THE RESULT, THE ASSESSING OFFICER IS DIRECTE D TO ALLOW THE DEDUCTION U/S.80P(2)(A)(I), FOR RS.1,66,13,779/- AN D THE DEDUCTION U/S.80P(2)(D), TO THE EXTENT OF RS.6,32,684/- BEING THE DIFFERENCE BETWEEN THE ORIGINAL CLAIM U/S.80P (RS.1,72,46,463 ) AND REVISED DEDUCTION U/S.80P(2)(A)(I) (RS.1,66,13,779), WITHO UT ANY FURTHER DEDUCTION U/S.80P(2)(C). IN THE RESULT, T HE APPEAL IS ALLOWED'. 7. IN VIEW OF THE DETAILED DISCUSSION BY THE CIT(A) , WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDERS OF THE ASSESSIN G OFFICER. ASSESSEE IS NOT IN APPEAL ON THE ABOVE ORDER OF LD.CIT(A). 8. LD.COUNSEL PLACED ON RECORD VARIOUS CASE LAW. IN THE CASE OF ACIT VS. THE JAFRI MOMIN VIKAS CREDIT CO-OP SOCIETY LTD. , PALANPUR IN ITAT, AHMEDABAD BENCH ORDER DT.01-03-2013 HELD THAT ASSES SEE-COMPANY BEING A CO-OPERATIVE SOCIETY AND NOT IN BANKING BUS INESS IS ELIGIBLE FOR DEDUCTION U/S.80P AND PROVISIONS OF SECTION 80P(4) WILL NOT HAVE ANY APPLICATION IN ASSESSEE'S CASE. IN THE CASE OF CIT VS. SURAT VANKAR SAHAKARI SANGH LTD., [43 TAXMANN.COM 431 (GUJARAT)] , THE HON'BLE GUJARAT HIGH COURT HAS CONSIDERED THE DEDUCTION ALL OWABLE U/S.80P AND HELD THAT SECTION 80P DEDUCTIONS ARE TO BE DENIED O NLY TO CO-OPERATIVE BANKS AND NOT TO CO-OPERATIVE SOCIETY, AFTER CBDT C LARIFICATION ON SECTION 80P. CONSIDERING THE FACTS OF THE CASE AND POSITION OF LAW, WE ITA NOS. 1328, 1329, 1330/HYD/2012 & 1448/HYD/2013 M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALLY AIDED COOP CREDIT SOCIETY LTD. , :- 11 -: ARE OF THE CONSIDERED OPINION THAT THE LD.CIT(A) IS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEDUCTION CLAIME D BY ASSESSEE U/S.80P OF THE ACT, BOTH UNDER 80P(2)(A)(I) AND ALSO 80P(2) (D). THERE IS NO MERIT IN REVENUE'S GROUNDS. ACCORDINGLY, THE SAME IS DIS MISSED. 9. IN THE RESULT, ALL THE APPEALS OF REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN OPEN COURT ON 04 TH MARCH, 2015. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B. RAMA KOTAIAH) JUDICIAL MEMBER ACC OUNTANT MEMBER HYDERABAD, DATED 04 TH MARCH, 2015 TNMM COPY TO : 1. ASS IS T ANT COMMISSIONER OF INCOME TAX, CIRCLE - 7 (1), 2 ND FLOOR, B-BLOCK, INCOME TAX TOWERS, A.C.GUARDS, HYDE RABAD. 2. M/S. METROCITY CRIMINAL COURTS EMPLOYEES MUTUALL Y AIDED COOPERATIVE CREDIT SOCIETY LTD., M.C.COURTS COMPLEX , RED HILLS, NAMPALLY, HYDERABAD. 3. CIT(APPEALS)-VI, HYDERABAD. 4. CIT-VI HYDERABAD. 5. D.R. ITAT, HYDERABAD