The Jawala Co- Operative Urban Thrift & Credit Society Ltd., New Delhi V. ACIT, New Delhi

ITA 2901/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5403 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 11-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: SAI PRASANA DASH
• Keywords: Business income; Rule of consistency; Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA.NO.2900 & 2901/DEL./2015 ASSESSMENT YEARS 2010-2011 & 2011-2012 THE JAWALA COOPERATIVE URBAN THRIFT & CREDIT SOCIETY LIMITED, 218-219, CYCLE MARKET, JHANDEWALAN EXTN. NEW DELHI 110 055. PAN AABAT0924C VS THE ACIT, CIRCLE-62(1) CIVIC CENTRE, NEW DELHI 110 002. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI PUNEET AGARWAL, SHRI DEEPAK THAKUR & SHRI SAI PRASANA DASH ADVOCATES FOR REVENUE : SHRI S.R. SENAPATI, SR. D.R. DATE OF HEARING : 24 .0 4 .2018 DATE OF PRONOUNCEMENT : 26 .04.2018 ORDER PER BHAVNESH SAINI, J.M. BOTH THE APPEALS BY THE SAME ASSESSEE ARE DIRECTE D AGAINST THE DIFFERENT ORDERS OF THE LD. CIT(A)-XX, NEW DELHI, 2 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. DATED 16 TH MARCH, 2015, FOR THE A.YS. 2010-2011 AND 2011- 2012. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 3. THE ISSUE IS COMMON IN BOTH THE APPEALS. FOR TH E PURPOSE OF DISPOSAL OF BOTH THE APPEALS, WE DECIDE THE APPEAL FOR THE A.Y. 2010-2011 AS UNDER. ITA.NO.2900/DEL./2015 A.Y. 2010-2011 : 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL : 1. THE ORDER OF ASSESSING OFFICER IS BAD IN LAW AND A GAINST THE FACTS OF THE CASE. 2. A.O. HAS WRONGLY DISALLOWED AND C.L.T (A) HAS WRONG LY UPHELD THE DISALLOWANCE OF DEDUCTION CLAIMED BY A U/S 80P FOR THE INTEREST ON FDR EARNED BY IT ON FDR KEP T WITH BOMBAY MERCANTILE CO OPERATIVE BANK LIMITED OF RS.1,31,01,754/- AND ALSO SAVING BANK INTEREST OF RS.22,163/- AND ALSO HAS WRONGLY UPHELD THAT INTERE ST ON FDR KEPT WITH BOMBAY MERCANTILE CO OPERATIVE BAN K 3 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. LIMITED IS INCOME FROM OTHER SOURCES WHILE A CL AIMING IT IS A BUSINESS INCOME. 5. THE A.O. MADE DISALLOWANCE OF DEDUCTION UNDER SECTION 80P(2)(D) BEING INTEREST ON FDR AMOUNTING T O RS.1,34,65,081/- AND S.B. INTEREST OF RS.22,163/- B Y TREATING THEM AS INCOME FROM OTHER SOURCES. THE ASSESSEE TOO K THE PLEA THAT INCOME OF THE ASSESSEE FROM BOMBAY MERCANTILE COOPERATIVE BANK LTD., IS EXEMPT UNDER SECTION 80P( 2)(D) OF THE I.T. ACT. THE ASSESSEE FILED WRITTEN SUBMISSIONS BE FORE LD. CIT(A) WHICH IS REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSESSEE EXPLAINED THAT ASSESSEE IS A COOPERATIVE U RBAN THRIFT & CREDIT SOCIETY ENGAGED IN PROVIDING CREDIT FACILI TIES TO ITS MEMBERS. ONLY A MEMBER CAN GET CREDIT FACILITIES SA Y UP TO RS.1.50,000/- AFTER PROVIDING PERSONAL SURETY OF TH E MEMBERS. RETURN WAS FILED DECLARING GROSS INCOME OF RS.1,35, 70,457/- AFTER CLAIMING DEDUCTION UNDER SECTION 80P OF THE E NTIRE AMOUNT, -NIL- INCOME WAS OFFERED FOR TAXATION. THE ASSESSEE WAS FILING RETURN OF INCOME REGULARLY AND IN PAST, SEVERAL SCRUTINY ASSESSMENTS HAVE BEEN DONE AND TAXABLE INC OME 4 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. DECLARED BY THE ASSESSEE AT NIL HAVE ALREADY BEEN A CCEPTED. IT WAS CLAIMED AS EXEMPT UNDER SECTION 80P OF THE I.T. ACT WHICH INVARIABLY INCLUDED INTEREST INCOME ON FDR KEPT WIT H BOMBAY MERCANTILE COOPERATIVE BANK LTD., IN A.YS. 2008-200 9 AND 2009-2010, FOR THE FIRST TIME, IN THE HISTORY OF TH E ASSESSEE, INTEREST INCOME ON FDR OF ASSESSEE WITH BOMBAY MERC ANTILE COOPERATIVE BANK LTD., WAS TAXED. HOWEVER, THE LD. CIT(A) DELETED THE ADDITION AS THE ASSESSEES CONTENTION T HAT INCOME FROM FDR WITH BOMBAY MERCANTILE COOPERATIVE BANK LT D., WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P FROM THE A BOVE BANK WHICH IS ALSO COOPERATIVE BANK WAS FOUND CORRECT. T HE A.O. HAD DIVIDED THE INCOME INTO TWO PARTS I.E., INCOME FOR MEMBERS AND OTHER INTEREST INCOME ON FUNDS INVESTED BY ASSESSEE WITH BOMBAY MERCANTILE COOPERATIVE BANK LTD., AND DIVIDE ND FROM DELHI STATE CORPORATION BANK. THE A.O. HELD THAT IN TEREST INCOME IS TAXABLE. IT IS STATED THAT A.O. RELIED UP ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TOTGAR S CO- OPERATIVE SALE SOCIETY LTD., VS. ITO (2010) 322 ITR 283 (SC). IT WAS SUBMITTED THAT THE FACTS IN THIS CASE ARE CLEAR LY 5 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. DISTINGUISHABLE BECAUSE IT RELATES TO A SOCIETY WHO SE BUSINESS IS SALES I.E., MARKETING. A MARKETING SOCIETYS MAI N BUSINESS IS NOT OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS A ND SUCH A SOCIETY GETTING SHORT TERM FUND INVESTED AND GETTIN G INCOME FROM IT MAY BE TAXABLE. THE ASSESSEES INTEREST INC OME IS HOWEVER FROM ITS MAIN BUSINESS. THIS CASE DOES NOT RELATE TO COOPERATIVE BANK. THE ITAT, CHANDIGARH BENCH IN THE CASE OF PUNJAB STATE COOPERATIVE FEDERATION OF HOUSE BUILDI NG SOCIETY LTD., VS. ACIT IN ITA.NO.966/CHD./2009 DATED 29 TH JANUARY, 2010 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING THAT FUNDS KEPT IN BANK CAN BE SAID TO BE READY FOR UTIL ISATION BY THE COOPERATIVE SOCIETY IN ITS BUSINESS OF PROVIDING CR EDIT FACILITIES TO ITS MEMBERS, THE INCOME FROM SUCH MONIES, KEPT I N BANK, CAN BE SAID TO BE ATTRIBUTABLE TO THE BUSINESS OF P ROVIDING CREDIT FACILITIES SO AS TO FALL WITHIN THE AMBIT OF SECTIO N 80P(2)(A)(I) OF THE I.T. ACT. THE FACTS OF THE CASE OF ASSESSEE ARE IDENTICAL. THEREFORE, INTEREST INCOME ON SUCH FUNDS DEPOSITED IN THE BANKS ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80P( 2)(A)(I) OF THE I.T. ACT. THE ASSESSEE INVESTED SURPLUS FUNDS IN FD R AND EARNED 6 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. INTEREST. THESE FUNDS WERE ALWAYS AVAILABLE TO ASSE SSEE FOR UTILISATION FOR PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE A.O. FAILED TO NOTE THAT INCOME ON FDR ON WHICH INTEREST INCOME IS ACCRUED HAVE ALL BEEN PLEDGED WITH THE SAME BANK AN D O.D. FACILITY IS OBTAINED, ON WHICH, INTEREST HAVE BEEN PAID. THE O.D. FACILITY, THUS, OBTAINED WERE USED FOR PROVIDING CR EDIT FACILITIES TO ITS MEMBERS AND THE FDR INVESTED WAS OF RS.19.62 CRORES (ON ASSET SIDE). IT WAS SUBMITTED THAT BOMBAY MERCA NTILE COOPERATIVE BANK LTD., DOES NOT FALL WITHIN THE PUR VIEW OF TDS PROVISIONS. CERTIFICATE TO THAT EFFECT WAS FILED. T HE O.D. AGAINST FDS ARE UTILISED BY THE ASSESSEE FOR THE PURPOSE OF ITS BUSINESS FOR RUNNING THRIFT CREDIT SOCIETY FOR PAYMENT TO IT S MEMBERS. BOMBAY MERCANTILE COOPERATIVE BANK LTD., IS A COOPE RATIVE BANK AND THEREFORE, INTEREST INCOME RECEIVED FROM T HE FIXED DEPOSITS PLACED WITH IT ALSO QUANTIFIED FOR DEDUCTI ON UNDER SECTION 80P(2)(D) OF THE I.T. ACT. THE ASSESSEE REL IED UPON THE ORDER OF THE ITAT, DELHI BENCH IN THE CASE OF THE A SSESSEE IN ITA.NO.2607/DEL./2012 FOR A.Y. 2008-2009 DATED 19.1 2.2014 IN WHICH IT WAS HELD AS UNDER : 7 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. 9. WE HAVE HEARD RIVAL PARTIES AND HAVE GON E THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT TOTAL I NCOME EARNED BY THE ASSESSEE INCLUDED INCOME ON FIXED DEP OSITS PLACED WITH BOMBAY MERCANTILE BANK, INTEREST INCOME FROM A SCHEDULED BANK AND DIVIDEND INCOME FROM DELHI COOPERATIVE BANK. FROM THE CERTIFICATE AS PLACED AT PAPER BOOK PAGE 30, WE FIND THAT BOMBAY MERCANTILE COOPER ATIVE BANK IS A COOPERATIVE SOCIETY REGISTERED UNDER MAHA RASHTRA COOPERATIVE SOCIETIES ACT AND WE FURTHER FIND THAT THE SAID SOCIETY HAS BEEN ASSESSED U/S 143(3) AS A COOPERATI VE SOCIETY AND ITS INCOME WAS ALLOWED TO BE EXEMPT U/S 80P(2)(I) AS HELD BY MUMBAI TRIBUNAL IN I.T.A. NO. 4128 AND 4129 VIDE ITS ORDER DATED 30.11.2005, FOR ASSESSMEN T YEAR 1990-91 AND 1991-92 AND FURTHER BY MUMBAI TRIBUNAL VIDE ORDER DATED 07.09.2011 IN I.T.A. NO. 5292 FOR ASSES SMENT YEAR 1997-98. THEREFORE IT IS HELD THAT FIXED DEPOS ITS PLACED WITH BOMBAY MERCANTILE BANK FALLS WITHIN THE EXEMPT ION GRANTED BY SECTION 80P(2)(D) OF THE ACT. THE ASSESS EE WAS ALSO ELIGIBLE UNDER THE PROVISIONS OF SECTION 80P(2 )(A)(I) AS 8 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. THE FUNDS PLACED BY ASSESSEE IN THE FORM OF FIXED DEPOSITS CAN BE SAID TO BE KEPT FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AS THE ASSESSEE HAD AVAILED CREDIT FACILIT IES ALSO AGAINST SUCH FIXED DEPOSITS WHICH WERE AGAIN USED F OR THE PURPOSE OF BUSINESS OF ASSESSEE. MOREOVER, UNDER SI MILAR CIRCUMSTANCES, CHANDIGARH BENCH IN I.T.A. NO. 996/2 009 AS NOTED BY LD CIT(A) HAS DECIDED IN FAVOUR OF ASSE SSEE. THE DIVIDEND INCOME IS EXEMPT FOR ALL PERSONS INCLU DING ASSESSEE. THE INTEREST INCOME FROM BANK AMOUNTING T O RS.18,190/- IS THOUGH NOT EXEMPT U/S 80(P)(2)(D) BU T IS EXEMPT U/S 80P(2)(I) OF THE ACT. THE CASE LAW OF TO TGARS COOPERATIVE SOCIETY WAS RIGHTLY DISTINGUISHED BY LD . CIT(A). THEREFORE, KEEPING IN VIEW ALL FACTS AND CIRCUMSTAN CES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A ). 10. IN VIEW OF ABOVE, APPEAL FILED BY REVENU E IS DISMISSED. 11. ORDER PRONOUNCED IN THE OPEN COURT ON 19 LH DEC., 2014. 9 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. 5.1. A FRESH CERTIFICATE FROM BOMBAY MERCANTILE COOPERATIVE BANK LTD., WAS ALSO FILED. THE INTEREST FROM FDR IS DIRECTLY LINKED TO THE INTEREST BEARING DEPOSITS RE CEIVED FROM ITS MEMBERS, ON WHICH, THE SOCIETY WAS PAYING INTEREST. THE OTHER DECISION RELIED UPON BY A.O. ARE NOT APPLICABLE. 5.2. THE LD. CIT(A) QUOTED THE ORDER OF ITAT, DELH I BENCH IN THE CASE OF SAME ASSESSEE FOR A.Y. 2008-2009 (SU PRA), BUT, TRIED TO DISTINGUISH THE SAID DECISION AND ULTIMATE LY HELD THAT THE EARLIER ORDER OF THE TRIBUNAL IS DISTINGUISHABL E ON FACTS. IT WAS HELD THAT FACTS OF THE CASE IN THE CASE OF TOTG ARS COOPERATIVE SALE SOCIETY LTD. VS. ITO (SUPRA) ARE S IMILAR TO THE CASE OF THE ASSESSEE. IT WAS NOTED THAT AS PER SECT ION 80P(4) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN RELAT ION TO ANY COOPERATIVE BANK. THE ASSESSEE DEPOSITED THE MONEY WITH BOMBAY MERCANTILE COOPERATIVE BANK LTD., WHICH HAS FILED ITS RETURN AS A BANK AND NOT AS COOPERATIVE SOCIETY. TH EREFORE, NO BENEFIT IS ALLOWABLE TO ASSESSEE. THE LD. CIT(A), T HEREFORE, HELD 10 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. THAT ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER S ECTION 80P(2)(D) OF THE I.T. ACT AND DISMISSED THE APPEAL OF ASSESSEE. 6. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT ISSUE IS IDENTICAL AS HAVE BEEN DECIDED BY ITA T, DELHI BENCH IN THE CASE OF THE ASSESSEE FOR A.Y. 2008-200 9 (SUPRA) IN WHICH THE LD. CIT(A) ALLOWED THE CLAIM OF ASSESSEE AND THE TRIBUNAL DISMISSED THE DEPARTMENTAL APPEAL. HE HAS SUBMITTED THAT THE REVENUE PREFERRED APPEAL BEFORE THE HONBL E DELHI HIGH COURT WHICH HAVE BEEN DISMISSED IN ITA.NO.805/2015 DATED 18 TH DECEMBER, 2015, THOUGH, ON TAX EFFECT BEING LESS T HAN RS.20 LAKHS. HE HAS SUBMITTED THAT ITAT, AHMEDABAD BENCH IN THE CASE OF THE ARBUDA CREDIT CO-OP. SOCIETY LTD., VS. ACIT IN ITA.NOS.2084 & 2085/AHD./2015 DATED 29.02.2016 CONS IDERED THE CASE OF ASSESSEE WHICH IS CREDIT COOPERATIVE SO CIETY AND FOLLOWING THE DECISION OF A.Y. 2008-2009 ABOVE IN T HE CASE OF ASSESSEE AND DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPER ATIVE 11 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. LIMITED, TUMKUR VS. ITO, WARD-1, TUMKUR IN ITA.NO.3 07 OF 2014 DATED 28.10.2014 ALLOWED SIMILAR CLAIM OF ASSE SSEE BY HOLDING THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION UND ER SECTION 80P(2)(A)(I) OF THE I.T. ACT FOR THE INTEREST INCOM E EARNED ON UNUTILIZED IDLE FUNDS KEPT FOR BUSINESS PURPOSES OF THE SOCIETY BEING DEPOSITED WITH M/S. BANAS BANK. LEARNED COUNS EL FOR THE ASSESSEE FURTHER SUBMITTED THAT IN SUBSEQUENT A.Y. 2013-2014, THE LD. CIT(A)-27, VIDE ORDER DATED 15 TH FEBRUARY, 2018, IN THE CASE OF THE ASSESSEE ALLOWED SIMILAR CLAIM OF ASSES SEE. COPIES OF ALL THE ORDERS ARE PLACED ON RECORD. LEARNED COUNSE L FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT THE ISSUE IS CO VERED IN FAVOUR OF THE ASSESSEE BY ORDER OF THE TRIBUNAL IN THE CASE OF SAME ASSESSEE AND OTHER DECISIONS REFERRED TO ABOVE . 7. ON THE OTHER HAND, LD. D.R. RELIED UPON THE ORD ERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEE M ADE A CLAIM OF DEDUCTION UNDER SECTION 80P(2)(D) OF THE I.T. AC T BEFORE AUTHORITIES BELOW AND NO CLAIM IS MADE FOR DEDUCTIO N UNDER SECTION 80P(2)(A)(I) OF THE I.T. ACT. 12 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOT IN DISPUTE THAT ASSESSEE IS A COOPERATIVE URBAN THR IFT & CREDIT SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO I TS MEMBERS AND ONLY ITS MEMBERS CAN GET CREDIT FACILITIES. THE ASS ESSEE CLAIMED THAT ITS INCOME IS EXEMPT UNDER SECTION 80P OF THE I.T. ACT FROM TAXATION. IT WAS ALSO PLEADED THAT IN EARLIER YEARS THE SAME CLAIM OF ASSESSEE HAVE BEEN ACCEPTED BY THE REVENUE DEPAR TMENT. THE RULE OF CONSISTENCY APPLIES IN FAVOUR OF ASSESS EE AS NO DIFFERENT FACTS HAVE BEEN BROUGHT ON RECORD. IT IS ALSO CLAIMED THAT IN A.Y. 2008-2009, THE A.O. HAS DENIED DEDUCTI ON UNDER SECTION 80P OF THE I.T. ACT ON INTEREST INCOME ON F DR WITH BOMBAY MERCANTILE COOPERATIVE BANK LTD., AND WAS TA XED. THE LD. CIT(A), HOWEVER, DELETED THE ADDITION AND THE T RIBUNAL DISMISSED THE APPEAL OF REVENUE. THE ASSESSEE PLACE D SUFFICIENT MATERIAL BEFORE THE AUTHORITIES BELOW TO PROVE THAT IT HAS INVESTED SURPLUS FUNDS IN FDR AND EARNED INTEREST. THESE FUNDS WERE AVAILABLE TO ASSESSEE FOR UTILISATION FOR PROV IDING CREDIT FACILITIES TO ITS MEMBERS. THE INTEREST ON FDR HAVE BEEN PLEDGED WITH THE SAME BANK AND O.D. FACILITY HAVE BEEN OBTA INED. THE 13 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. O.D. FACILITY OBTAINED WERE USED FOR PROVIDING CRED IT FACILITIES TO ITS MEMBERS. THE ASSESSEE ALSO FILED CERTIFICATE TH AT BOMBAY MERCANTILE COOPERATIVE BANK LTD., IS A COOPERATIVE SOCIETY. THE FINDINGS OF THE TRIBUNAL IN THE CASE OF ASSESSEE FO R A.Y. 2008- 2009 HAVE ALREADY BEEN REPRODUCED ABOVE IN WHICH IT WAS HELD THAT BOMBAY MERCANTILE COOPERATIVE BANK LTD., HAVE BEEN ASSESSED AS A COOPERATIVE SOCIETY AND ITS INCOME WA S ALLOWED TO BE EXEMPT UNDER SECTION 80P(2)(A)(I) OF THE I.T. ACT BY THE MUMBAI BENCH. IT WAS, THEREFORE, HELD THAT FIXED DE POSITS PLACED WITH THIS BANK FALLS WITHIN THE EXEMPTION GRANTED B Y SECTION 80P(2)(D) OF THE I.T. ACT AND ASSESSEE WAS ALSO ELI GIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE I.T. AC T. THE ORDER OF THE TRIBUNAL HAS BECOME FINAL BECAUSE DEPARTMENTAL APPEAL HAVE BEEN DISMISSED BY THE HONBLE DELHI HIGH COURT , THOUGH, ON TAX EFFECT. THUS, ASSESSEE HAS BEEN ABLE TO PROV E THAT IT HAS INVESTED SURPLUS FUND IN THE FDR AND EARNED INTERES T WHICH IS UTILISED FOR PROVIDING CREDIT FACILITIES TO ITS MEM BERS. THE O.D. FACILITY WAS ALSO OBTAINED FROM THE SAME BANK WHICH IS USED FOR PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE ISS UE IS, THEREFORE, 14 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF I TAT, DELHI BENCH, IN THE CASE OF SAME ASSESSEE FOR A.Y. 200820 09. SINCE THE FINDING OF FACT HAS BECOME FINAL THAT BOMBAY ME RCANTILE COOPERATIVE BANK LTD., IS A COOPERATIVE SOCIETY, TH EREFORE, THERE WAS NO JUSTIFICATION TO APPLY SECTION 80P(4) OF THE I.T. ACT AGAINST THE ASSESSEE. IN THE SAME ORDER OF THE TRIB UNAL, THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F TOTGARS COOPERATIVE SALE SOCIETY LTD., (SUPRA) WAS FOUND TO BE DISTINGUISHABLE ON FACTS. THEREFORE, THERE WAS NO J USTIFICATION FOR LD. CIT(A) TO DISTINGUISH THE ORDER OF THE TRIB UNAL IN THE CASE OF THE SAME ASSESSEE. THE HONBLE KARNATAKA HI GH COURT IN THE CASE OF TUMKAR MERCHANTS SOUHARDA CREDIT COO PERATIVE LTD., TUMKUR VS. ITO, TUMKUR (SUPRA) IN PARA-8 HELD AS UNDER: 8. THEREFORE, THE WORD ATTRIBUTABLE TO IS CERTAINLY WIDER IN IMPORT THAN THE EXPRESSION DERIVED FROM. WHENEVER THE LEGISLATURE WANTED TO GIVE A RESTRICTE D MEANING, THEY HAVE USED THE EXPRESSION DERIVED FRO M. THE EXPRESSION ATTRIBUTABLE TO BEING OF WIDER IMP ORT, THE 15 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. SAID EXPRESSION IS USED BY THE LEGISLATURE WHENEVER THEY INTENDED TO GATHER RECEIPTS FROM SOURCES OTHER THAN THE ACTUAL CONDUCT OF THE BUSINESS. A COOPERATIVE SOCIE TY WHICH IS CARRYING ON THE BUSINESS OF PROVIDING CRED IT FACILITIES TO ITS MEMBERS, EARNS PROFITS AND GAINS OF BUSINESS BY PROVIDING CREDIT FACILITIES TO ITS MEMB ERS. THE INTEREST INCOME SO DERIVED OR THE CAPITAL, IF NOT I MMEDIATELY REQUIRED TO BE LENT THE MEMBERS, THEY CANNOT KEEP T HE SAID AMOUNT IDLE. IF THEY DEPOSIT THIS AMOUNT IN BANK SO AS. TO EARN INTEREST, THE SAID INTEREST INCOME IS ATTRIBUT ABLE TO THE PROFITS AND GAINS OF THE BUSINESS OF PROVIDING CRED IT FACILITIES TO ITS MEMBERS ONLY. THE SOCIETY IS RIOT CARRYING ON ANY SEPARATE BUSINESS FOR EARNING SUCH INTEREST INC OME. THE INCOME SO DERIVED IS THE AMOUNT OF PROFITS AND GAINS OF BUSINESS ATTRIBUTABLE TO THE ACTIVITY OF CARRYING O N THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS BY A CO-OPERATIVE SOCIETY AND IS LIABLE TO BE DEDUCTED FROM THE GROSS TOTAL INCOME UNDER SECTION 80P OF THE ACT. 16 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. 8.1. IN THE SAID DECISION, THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF TOTGARS COOPERATIVE SA LE SOCIETY LTD., (SUPRA) HAVE BEEN CONSIDERED BY THE HIGH COUR T AND IT WAS HELD THAT THE SAID DECISION IS CONFINED TO FACTS OF THAT CASE. THE APPEAL OF ASSESSEE WAS ALLOWED. THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF ARBUDA CREDIT CO-OP. SOCIET Y LTD., VS. ACIT (SUPRA), FOLLOWED THE ORDER IN THE CASE OF SAM E ASSESSEE FOR A.Y. 2008-2009 AND DECISION OF THE HONBLE KARN ATAKA HIGH COURT ABOVE AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND HELD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE I.T. ACT FOR THE INTEREST INCOM E EARNED ON UNUTILIZED IDLE FUNDS KEPT FOR BUSINESS PURPOSES OF THE SOCIETY BEING DEPOSITED WITH BANAS BANK. THE LD. CIT(A) IN THE CASE OF THE SAME ASSESSEE FOR A.Y. 2013-2014 VIDE ORDER DAT ED 15.02.2018 FOLLOWING THE ORDER OF THE TRIBUNAL FOR A.Y. 2008- 2009 ALLOWED THE CLAIM OF ASSESSEE. THEREFORE, THER E WERE NO JUSTIFICATION FOR LD. CIT(A) IN NOT FOLLOWING THE O RDER OF THE TRIBUNAL IN THE CASE OF SAME ASSESSEE FOR A.Y. 2008 -2009. THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF AG RAWAL 17 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. WAREHOUSING AND LEASING LTD., 257 ITR 235 HELD THAT THE LD. CIT(A) NOT ONLY COMMITTED JUDICIAL IMPROPRIETY BUT ALSO ERRED IN LAW IN REFUSING TO FOLLOW THE ORDER OF THE APPELLAT E TRIBUNAL. THE CONDITIONS OF SECTION 80P(2)(A)(I) AND ALSO 80P(2)( D) ARE SATISFIED BY ASSESSEE. 8.2. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT AUTHORITIES BELOW WERE NOT JUSTIFIED IN REFUSING TO GRANT DEDUCTION UNDER SECTION 80P OF THE I.T. ACT IN FAVOUR OF THE ASSESSEE. WE, ACCORDI NGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION. THE APPEAL OF ASSESSEE IS ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ITA.NO.2901/DEL./2015 A.Y. 2011-2012 : 10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL : 1. THE ORDER OF ASSESSING OFFICER IS BAD IN LAW AN D AGAINST THE FACTS OF THE CASE. 18 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. 2. A.O. HAS WRONGLY DISALLOWED AND C.L.T (A) HAS WRONGLY UPHELD THE DISALLOWANCE OF DEDUCTION CLAIME D BY A U/S 80P FOR THE INTEREST ON FDR EARNED BY IT ON FDR KEPT WITH BOMBAY MERCANTILE CO OPERATIVE BANK LIMITED OF RS.2,10,61,424/- AND ALSO SAVING BANK INTEREST OF RS.3,75,966/- AND ALSO HAS WRONGLY UPHE LD THAT INTEREST ON FDR KEPT WITH BOMBAY MERCANTILE CO OPERATIVE BANK LIMITED IS INCOME FROM OTHER SOURCE S WHILE A CLAIMING IT IS A BUSINESS INCOME. 3. WITHOUT PREJUDICE TO THE GROUND NO. 2, THE ASSESSAB LE INCOME OF THE A CANT EXCEED AMOUNT OF DEDUCTION U/S 80P CLAIMED BY A. IN THIS YEAR ASSESSEE CLAIM U/S 80P IS RS.82,95,417/- AND IT CANT BE ASSESSED AT A N INCOME OF EXCEEDING RS.82,95,417/- AS ONLY POINT OF CONTENTION IS ALLOWABLY OF DEDUCTION U/S 80P. 11. THE ISSUE IS SAME AS HAVE BEEN CONSIDERED IN A .Y. 20102011. FOLLOWING THE REASONS FOR DECISION FOR TH E SAME, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND D ELETE THE ENTIRE ADDITION. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. 19 ITA.NOS.2900 & 2901/DEL./2015 M/S. JAWALA COOPERATI VE URBAN THRIFT & CREDIT SOCIETY LTD., NEW DELHI. 13. TO SUM-UP, BOTH THE APPEALS OF THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (O.P. KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 26 TH APRIL, 2018 VBP/- COPY TO 1. THE APP ELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT E BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.