RAHEJA GREEN CO-OPERATIVE HOUSING SOCIETY LIMITED, MUMBAI V. INCOME TAX OFFICER, WARD 32(1)(4), MUMBAI

ITA 1943/MUM/2023

AI Insights

The case involves Raheja Green Co-operative Housing Society Ltd., which appealed against the decision of the Income Tax Officer (ITO) and the Commissioner of Income Tax (Appeals) [CIT(A)], which disallowed a deduction of Rs. 17,64,209 under section 80P(2)(d) of the Income Tax Act. This deduction was claimed for interest income received from deposits with Saraswat Cooperative Bank and SVC Cooperative Bank. The ITO and CIT(A) contended that post the amendment of section 80P(4), cooperative banks are not considered cooperative societies for the purpose of section 80P(2)(d). However, the Tribunal, referencing various decisions, held that the interest income from cooperative banks is eligible for deduction under section 80P(2)(d) as these banks are still registered as cooperative societies under the Cooperative Society Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130159 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-09-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 25-05-2023
• Other Referred Cases: Mittal Park Cooperative Housing Society Ltd. Vs. Asst. Director of Income Tax, Kaliandas Udyog Bhavan Premises Coop Society Ltd. Vs. ITO, Aqua Cooperative Housing Society Limited Vs ITO, Sea Green Cooperative Housing Society Ltd. Vs. ITO, lands' End Cooperative Housing Society Ltd. Vs. ITO, The Nutan Laxmi Chs Ltd. Mumbai Vs. ITO, M/s Palmera Cooperative Housing Society Ltd. Vs. ACIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAKASH KISHINCHANDANI
• Assessee Lawyers: SANJAY PARIKSH
• Section: 143(3); 80P

Judgement Text

P a g e | 1 ITA No.1943/Mum/2023 Raheja Green Co-operative Housing Society Ltd. Vs. ITO, Ward 32(1)(4) IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No.1943/Mum/2023 (A.Y. 2017-18) Raheja Green Co-operative Housing Society Limited Society Office, Ground Floor, Raheja Estate, Kulupwadi Road, Borivali East, Mumbai – 400 066 Vs. Income Tax Officer, Ward 32(1)(4) 706, 7 th Floor, Kautilya Bhavan, C-41 to C-43, G Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAAAR4856Q Appellant .. Respondent [ Appellant by : Sanjay Pariksh Respondent by : Prakash Kishinchandani Date of Hearing 04.09.2023 Date of Pronouncement 28.09.2023 आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the assesse is directed against the order passed by the ld. CIT(A) NFAC, dated 28.03.2023 for A.Y. 2017- 18. The assesse has raised the following grounds before us: “(A) Disallowance of deduction u/s. 80P(2)(d) - Rs.17,64.209/- 1. The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) [CIT(A)] erred on facts and in law in upholding the order of the Income Tax Officer, Ward - 32(1)(4), Mumbai (AO) disallowing the appellant's claim of deduction u/s 80P(2)(d) amounting to Rs.17,64,209/- P a g e | 2 ITA No.1943/Mum/2023 Raheja Green Co-operative Housing Society Ltd. Vs. ITO, Ward 32(1)(4) 2 The learned CIT(A) erred on facts and in law in upholding the disallowance made by the AO of the appellant's claim of deduction u/s 80P(2)(d) of Rs.17.64,209/- by interpreting section 80P(2)(d) to be eligible to income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society that is not a co-operative bank. 3. The learned AO and CIT(A) failed to appreciate that the appellant had earned interest from co-operative banks which were co-operative societies and hence the appellant was entitled to deduction u/s 80P(2)(d) of Rs.17,64,209/-. 4. The appellant prays that the disallowance made by the AO of the appellant's claim of deduction us. 80P(2)(d) of Rs.17,64,209/- and confirmed by the CIT(A), may be deleted. B) General 5. The above grounds of appeal are without prejudice to one another and the appellant craves leave to add, alter, amend, delete or modify any of the above grounds of appeal.” 2. Fact in brief is that assesse is a cooperative Housing Society and filed its return of income for the assessment year on 11.03.2018 declaring total income of Rs.456,110/-. The case was subject to scrutiny assessment and assessment u/s 143(3) of the Act was finalised on 29.11.2019. The assessing officer has disallowed the claim of deduction made u/s 80P(2)(d) of the Act in respect of interest amount of Rs.17,64,209/- received from the deposit maintained with the Saraswat Cooperative Bank and SVC Cooperative Bank. The assessing officer was of the view that deduction u/s 80P(2)(d) cannot be given without fulfilling the conditions laid down u/s 80P(4) of the Act. The assessing officer stated that after insertion of subsection (4) of 80P the cooperative bank is not treated as a cooperative society and benefit of deduction u/s 80P cannot be given when there was investment in any Co-operative Bank. 3. Aggrieved, the assesse filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. P a g e | 3 ITA No.1943/Mum/2023 Raheja Green Co-operative Housing Society Ltd. Vs. ITO, Ward 32(1)(4) 4. Heard both the sides and perused the material on record. The assessee is a cooperative society formed with the object of maintaining and attracting the builder occupied its members. Copy Pran Gold Coin case consider in the various decision of the ITAT Mumbai benches 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. Some of the decision of the ITAT wherein the claim of deduction u/s 80P(2)(d) was allowed on the interest income earned from deposit with cooperative bank are as under: (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) In the case of Kaliandas Udyog Bhavan Premises Coop. Society Ltd. Vs. ITO vide ITA No. 6547/Mum/2017 dated 25.04.2018 it is held that though the cooperative bank pursuant to the insertion of subsection (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 continued to be a cooperative society registered under the Cooperative Society Act, therefore, the interest income earned by a cooperative society from its investment held that cooperative bank would be entitled for claim of deduction u/s 80P(2)(d), therefore, we direct the AO to allow the claim of deduction to the assesse in respect of interest earned from investment made with P a g e | 4 ITA No.1943/Mum/2023 Raheja Green Co-operative Housing Society Ltd. Vs. ITO, Ward 32(1)(4) the cooperative bank, Therefore, the appeal of the assesse is allowed. 5. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 28.09.2023 Sd/- (Amarjit Singh) Accountant Member Place: Mumbai Date 28.09.2023 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.