ITO 13(2)(2), MUMBAI V. ANNASAHEB PATIL MATHADI KAMGAR SAHAKARI PATPEDHI LTD, MUMBAI

ITA 2515/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3650 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: RAJENDRA KADREKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI , , BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO. : 2515/MUM /2014 (ASSESSMENT YEAR: 2010-11) INCOME-TAX-OFFICER WD 13(2)(2), R. NO. 412, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI -400 020 VS ANNASAHEB PATIL MATHADI KAMGAR SAHAKARI PATPEDHI LTD, JIRAJ BHANJI SHAH MARKET, 3 RD FLOOR, YUSUF MEHERALI ROAD, MASJID BUNDER (WEST), MUMBAI -400 009 .: PAN: AAAAB 0167 G (APPELLANT) ! (RESPONDENT) APPELLANT BY : '# $ % & MS ARJU GARODIA RESPONDENT BY : ' #() * SHRI RAJENDRA KADREKAR + ,- . / /DATE OF HEARING : 03-05-2016 0%12 . / / DATE OF PRONOUNCEMENT : 20 -05-2016 ORDER , ,, , : :: : PER RAM LAL NEGI, (JUDICIAL MEMBER) : THIS APPEAL IS DIRECTED AGAINST ORDER DATED 06.01.2 014 PASSED BY THE CIT(A)-24, MUMBAI FOR THE ASSESSMENT YEAR 20 10-11. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A C O-OPERATIVE CREDIT SOCIETY REGISTERED UNDER THE MAHARASHTRA CO-OPERATI VE SOCIETY ACT, 2 ANNASAHEB PATIL MATHADI KAMGAR SAHAKARI PATPEDHI LTD ITA 2515/MUM/2014 1960 AND FILED ITS RETURN OF INCOME FOR THE RELEVAN T ASSESSMENT YEAR DECLARING TOTAL INCOME OF RS. NIL. AFTER THE SCRU TINY, THE AO DETERMINED THE GROSS TOTAL INCOME OF THE ASSESSEE A T RS.7,24,81,010/-DISALLOWING DEDUCTION OF RS.1,39,23 ,333/- CLAIMED UNDER SECTION 80P(2)(D) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AS WELL AS RS.5,85,57,676/- CLAIMED UNDER SECTION 80P(2)(A)(I) OF THE ACT. THE AO EXAMINED THE ASSESSEES CLAIM OF DEDUCT IONS AFORESAID IN THE LIGHT OF THE PROVISIONS OF SECTION 80P (4) OF T HE ACT, INTRODUCED W.E.F. 01.04.2007, AND MADE DISALLOWANCES AFORESAID HOLDING THAT THE ASSESSEE WAS CARRYING ON BANKING BUSINESS. 3. THE ASSESSMENT ORDER WAS CHALLENGED BY THE ASSES SEE BEFORE THE FIRST APPELLATE AUTHORITY, INTER ALIA , ON THE GROUND THAT THE AO HAS WRONGLY ADDED THE DEDUCTION CLAIMED UNDER SECTION 8 0P(2)(A)(I) AND UNDER SECTION 80P(2)(D) OF THE ACT AND HAS WRONGLY CONCLUDED THAT THE AMENDMENT TO SECTION 80P(4) INTRODUCED W.E.F. 0 1.04.2007 BY THE FINANCE ACT, 2006 CLEARLY BARS ALL CO-OPERATIVE BAN KS OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO -OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANKS FROM CLAIM ING EXEMPTIONS UNDER THE SAID SECTIONS 4. THE LD. CIT(A) AFTER HEARING THE ASSESSEE ALLOWE D THE AFORESAID GROUNDS OF APPEAL OF THE ASSESSEE, HOLDING THE ASSE SSEE AS A CO- OPERATIVE CREDIT SOCIETY AND NOT A CO-OPERATIVE BAN K WITHIN THE MEANING OF BANKING REGULATION ACT, 1949 AND BANKING COMPANIES ACT, TO ATTRACT SECTION 80P(4) OF THE ACT. SINCE T HE ASSESSEE IS CARRYING ON THE BUSINESS OF EXTENDING CREDIT FACILI TY TO ITS MEMBERS ONLY, IT CANNOT BE TREATED AS A COOPERATIVE BANK. ACCORDINGLY, THE 3 ANNASAHEB PATIL MATHADI KAMGAR SAHAKARI PATPEDHI LTD ITA 2515/MUM/2014 LD. CIT(A) DELETED THE ADDITIONS MADE BY THE AO UND ER SECTION 80P(2)(D) AND 80P(2)(A)(I) OF THE ACT. 5. DISSATISFIED WITH THE IMPUGNED ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL ON THE FOL LOWING EFFECTIVE GROUNDS:- (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION MADE BY THE AO AMOUNTING TO RS.5,85,57,676/- U/S.80P(2)(A)(I) AND RS.1,39,23,333/- U/S.80P(2)(D) OF THE I.T. ACT EVEN THOUGH ASSESSEE WAS CARRYING ON BANKI NG BUSINESS. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING TH E FACT THAT AMENDMENT TO SEC.80P(4) INSERTED W.E.F. 1.4.20 07 BY FINANCE ACT, 2006 CLEARLY BANS ALL THE CO-OPERATIVE BANKS OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BAN KS FROM CLAIMING EXEMPTION UNDER THIS SECTION. 6. BEFORE US, THE LD. DR RELYING UPON THE ASSESSMEN T ORDER SUBMITTED THAT, THE CIT(A) HAS WRONGLY DELETED THE ADDITION MADE BY THE AO AMOUNTING TO RS.5,85,57,676/- UNDER SECTION 80P(2)(A)(I) AND RS.1,39,23,333/- UNDER SECTION 80P(2)(D) OF THE ACT IGNORING THE FACT THAT THE ASSESSEE WAS CARRYING ON THE BANKING BUSIN ESS AND THE AMENDMENT TO SECTION 80P(4) INTRODUCED W.E.F. 01.04 .2007 BY THE FINANCE ACT, 2006 CLEARLY BARS ALL THE CO-OPERATIVE BANKS OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY OR PRIMARY CO-O PERATIVE AGRICULTURAL & RURAL DEVELOPMENT BANKS FROM MAKING CLAIM UNDER 4 ANNASAHEB PATIL MATHADI KAMGAR SAHAKARI PATPEDHI LTD ITA 2515/MUM/2014 THE AFORESAID SECTIONS. SINCE, THE ASSESSEE DOES NO T FALL UNDER ANY OF THE EXCEPTIONS, THE FINDINGS OF THE LD. CIT(A) ARE CONTRARY TO THE PROVISIONS OF LAW AND, ACCORDINGLY, ARE LIABLE TO B E SET ASIDE. 7. ON THE OTHER HAND, THE LD. AR SUBMITTED THAT THE LD. CIT(A) HAS RIGHTLY HELD THAT SECTION 80P(4) IS NOT APPLICA BLE IN CASE OF CO-OP. CREDIT SOCIETY EXTENDING CREDIT FACILITIES TO ITS M EMBERS. THE LD. AR INVITED OUR ATTENTION TO THE DECISION RENDERED ON 2 1.8.2015 BY CO- ORDINATE BENCH OF ITAT MUMBAI, IN THE MATTER OF M/S KULSWAMI CO- OPERATIVE SOCIETY, ITA NO.6790/MUM/2012 FOR THE ASS ESSMENT YEAR 2009-10 AND IN CROSS OBJECTION NO.05/MUM/2014 VIDE WHICH THE SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE . THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEES CASE IS SQUAR ELY COVERED BY THE DECISION OF MUMBAI ITAT IN THE AFORESAID CASE. 8. WE HAVE GONE THROUGH THE DECISION OF A BENCH O F THE MUMBAI TRIBUNAL RENDERED IN THE CASE OF M/S KULSWAMI CO-OP ERATIVE SOCIETY (SUPRA) TO FIND THAT THE CO-ORDINATE BENCH, RELYING ON AN EARLIER DECISION OF THE BENCH IN KULSWAMI CO-OPERATIVE SOCI ETY (ITA NOS. 3223/MUM/2011 FOR THE ASSESSMENT YEAR 2007-08 AND I TA NO. 505/MUM/2012 FOR ASSESSMENT YEAR 2008-09), HELD THA T ASSESSEE CO-OPERATIVE SOCIETY DOES NOT FALL WITHIN THE RESTR ICTION PLACED IN SUB-SECTION (4) OF SECTION 80P OF THE ACT, AND DECI DED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. 9. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT T HE ISSUE ARISING IN THE PRESENT CASE IS IDENTICAL TO THE ISSUE DECID ED BY THE CO- ORDINATE BENCH IN KULSWAMI CO-OPERATIVE SOCIETY (SU PRA). FOLLOWING THE CONSISTENT VIEW TAKEN ON THE IDENTICAL ISSUE, W E RESPECTFULLY 5 ANNASAHEB PATIL MATHADI KAMGAR SAHAKARI PATPEDHI LTD ITA 2515/MUM/2014 FOLLOW THE SAME AND HOLD THAT THE ASSESSEE CO-OPERA TIVE SOCIETY DOES NOT FALL WITHIN THE RESTRICTION PLACED UNDER SUB-SE CTION (4) OF SECTION 80P OF THE ACT. ACCORDINGLY, WE DECIDE BOTH THE GRO UNDS OF APPEAL AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MAY, 2016. SD/- SD/- ( ) ( ) (SANJAY ARORA) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 20 TH MAY, 2016 6// COPY TO:- 1) / THE APPELLANT. 2) ! / THE RESPONDENT. 3) THE CIT(A) -24, MUMBAI. 4) THE CIT13, MUMBAI. 5) , , / 6) THE D.R. A BENCH, MUMBAI. 7) 7 8- \ COPY TO GUARD FILE. '*9 + / BY ORDER : / # ' ;<2 , + - DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * .. *CHAVAN, SR.PS