SAI PRERNA CO OP SOCIETY LTD, MUMBAI V. ITO WD 12(1)(2), MUMBAI

ITA 2160/MUM/2018

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5554 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 06-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: VIJAYRAO TAMBE
• Keywords: Set aside
• Section: 80P; 201

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 2160 /MUM/ 201 8 (ASSESSMENT YEAR 20 08 - 09 ) SAI PRERNA CO.OP. SOCIETY LIMITED 317, PURAN ASHA NARSHI NATHA STREET MASJID BUNDER (E) MUMBAI - 400 009. PAN : A ADTS5638M V S . ITO WARD 12(1)(2) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI BHARAT KUMAR & SHRI VIJAY RAO TAMBE DEPARTMENT BY SMT. ARJU GARODIA DATE OF HEARING 08 . 11 . 201 8 DATE OF PRONOUNCEMENT 08 . 11 . 201 8 O R D E R THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 4.12.2017 PASSED BY THE LEARNED CIT(A) - 28, MUMBAI AND IT RELATES TO A.Y. 2008 - 09. THE ASSESSEE IS AGGRIEVED BY THE DECISION O F THE LEARNED CIT(A) IN GIVIN G RELIEF O NLY TO THE EXTENT OF 50% OF EXPENSES CLAIMED BY THE ASSESSEE . 2. I HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS A COOPERATIVE CREDIT SOCIETY. DURING THE YEAR UNDER CONSIDERATION, IT HAS RECEIVED INCOME OF RS 2,88,534/ - FROM MAHARASHTRA E LECTRICITY DISTRIBUTION COMPANY AS COMMISSION FOR COLLECTING ELECTRICITY BILLS FROM THE CUSTOMER S OF ELECTRICITY COMPANY. THE ASSESSEE HAD CLAIMED VARIOUS EXPENSE S IN THE FORM OF SALARY, PRINTING AND STATIONARY ETC. AGAINST ABOVE SAID COMMISSION INCOME R ECEIVED BY IT. THE E XPENSES SO CLAIMED BY THE ASSESSEE ACCOUNTED FOR ABOUT 95% OF THE COMMISSION INCOME. THE ASSESSING OFFICER NOTICED THAT THE EXPENSES MADE BY THE ASSESSEE IS ON THE HIGHER SIDE AND THE ASSESSEE ALSO DID NOT PROVE THAT THE SAID EXPENSES W ERE ACTUALLY EXPENDED OR LAID DOWN WHOLLY AND EXCLUSIVELY FOR SAI PRERNA CO.OP. SOCIETY LIMITE D 2 THE PURPOSE OF EARNING COMMISSION INCOME. ACCORDINGLY, HE DISALLOWED THE ENTIRE CLAIM OF EXPENSES . THE LEARNED CIT(A) RESTRICTED THE DISALLOWANCE TO 50% OF THE EXPENSES CLAIMED BY THE ASSESSEE. STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 3. THE LEARNED AR SUBMITTED THAT THE EXPENSE S HAVE BEEN ACTUALLY INCURRED BY THE ASSESSEE - SOCIETY AND HENCE CLAIM OF EXPENSES ARE JUSTIFIED EVEN THOUGH SAME WORKS OUT TO 95% OF THE C OMMISSION INCOME. THE LEARNED AR, IN THE ALTERNATIVE , SUBMITTED THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NO. 1308 & 1310/MUM/2017 DATED 30.1.2018 AND THE MATTER WAS RESTORED TO THE FILE OF THE ASSESSING O FFICER. ACCORDINGLY, LEARNED AR SUBMITTED THAT IMPUGNED ISSUE MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THE CLAIM OF THE ASSESSEE AFRESH . 4. THE LEARNED DR DID NOT OBJECT TO THE ALTERNATIVE PLEA PUT FORTH BY LEARNED AR. THE LEARNE D D R, HOWEVER , SUBMITTED THAT THE ISSUE UNDER CONSIDERATION RELATES TO QUANTUM OF EXPENSES ALLOWABLE AGAINST COMMISSION INCOME EARNED BY THE ASSESSEE. SHE SUBMITTED THAT T HERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE IS NOT ENTITLED FOR DED UCTION U/S. 80P OF THE ACT IN RESPECT NET COMMISSION INCOME. HOWEVER, THE TRIBUNAL, IN ITS ORDER DATED 30.1.2018 HAS DIRECTED THE ASSESSING OFFICER TO ALLOW CLAIM OF THE ASSESSEE U/S. 80P OF THE ACT . ACCORDINGLY, LEARNED DR SUBMITTED THAT NO SUCH DIRECTION SHOULD BE GIVEN FOR THE YEAR UNDER CONSIDERATION. 5 . I HEARD BOTH THE PARTIES AND PERUSED THE RECORD. AS RIGHTLY POINTED OUT BY THE LEARNED AR , THE ISSUE UNDER CONSIDERATION RELATES TO QUANTUM OF EXPENSES ALLOWABLE AGAINST COMMISSION INCOME EARNED BY T HE ASSESSEE. WHILE THE EXPENSES CLAIMED BY THE ASSESSEE HAS WORKED OUT TO 95% OF THE COMMISSION INCOME, THE LEARNED CIT(A) HAS RESTRICTED ALLOWANCE TO 50% OF THE EXPENSES CLAIMED BY THE ASSESSEE. THERE IS ALSO NO DISPUTE BETWEEN THE PARTIES THAT NET COMMIS SION INCOME IS LIABLE TO BE TAXED IN THE HANDS OF THE ASSESSEE , SAI PRERNA CO.OP. SOCIETY LIMITE D 3 I.E., DEDUCTION U/S. 80P OF THE ACT IS NOT ALLOWABLE AGAINST NET COMMISSION INCOME. HENCE, I FIND MERIT IN THE CONTENTION OF LEARNED D R THAT THERE IS NO REQUIREMENT TO GIVE ANY DIRECTION FOR D EDUCTION U/S 80P OF THE ACT . THERE SHOULD NOT BE ANY DISPUTE THAT EXPENSES INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING THE COMMISSION INCOME IS ALLOWABLE AS DEDUCTION. THEN, IT IS THE RESPONSIBILITY OF THE ASSESSEE TO SHOW THAT THE IMPUGNED EXPENSES WERE ACTUALLY INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING COMMISSION INCOME. I NOTICE THAT THE CO - ORDINATE BENCH HAS RESTORED AN IDENTICAL ISSUE IN THE ASSESSEES OWN CASE IN OTHER YEARS. FOLLOWING THE SAME, I SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THIS ISSUE AFRESH. THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE ASSESSING OFFICER BY FURNISHING NECESSARY INFORMATION AND EXPLANATION S THAT MAY BE CALLED FOR BY THE ASSESSING OFFICER. AFTER HEARING THE ASSESSEE, THE ASSESSING OFFICER MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRO NOUNCED IN THE COURT ON 08 . 11 . 201 8 . SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 08 / 11/ 20 1 8 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI SAI PRERNA CO.OP. SOCIETY LIMITE D 4 6. GUARD FILE. BY ORDER, //TRUE COPY// ( SENIOR P RIVATE S ECRETARY ) PS ITAT, MUMBAI