ITO 15(1)(2), MUMBAI V. BOMBAY MERCANTILE CO OP BANK LTD, MUMBAI

ITA 2937/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3013 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 29-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2937/MUM/2014 ASSESSMENT YEAR 2009-10 INCOME TAX OFFICER-15(1)(2), ROOM NO.116, 1 ST FLOOR,MATRU MANDIR TARDEO, GRANT ROAD (W), MUMBAI-400007 / VS. M/S BOMBAY MERCANTILE CO- OP. BANK LTD. EMPLOYEES CO- OP. CREDIT SOCIETY LTD. NAVRATAN BLDG., 69, P.D. MELLO ROAD, CARNAC BUNDER, MUMBAI-400009 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AAAJB0706E / REVENUE BY SHRI RANDHIR GUPTA !'# $ / ASSESSEE BY SHRI NISHIT GANDHI % & $ ' / DATE OF HEARING : 26/10/2015 & $ ' / DATE OF ORDER: 27/10/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 24/02/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED BY THE REVENUE PERTAINS TO A LLOW DEDUCTION U/S 80P OF THE INCOME TAX ACT, 1961(HEREI NAFTER THE ACT), EVEN THOUGHT THE ASSESSEE CARRIES ON BANK ING BOMBAY MERCANTILE CO-OP. BANK LTD. EMPLOYEES ITA NO.2937/MUM/2014 2 BUSINESS/OTHER BUSINESS IN THE NAME OF CREDIT CO-OP ERATIVE SOCIETY, WITHOUT CONSIDERING INSERTION OF SECTION 8 0P(4) AND SUB-CALUSE (VIIA) TO SECTION 2(24) INTRODUCED BY FI NANCE ACT, 2006 W.E.F 01/04/2007. 2. DURING HEARING OF THIS APPEAL, AT THE OUTSET, T HE LD. COUNSEL FOR THE ASSESSEE, SHRI NISHIT GANDHI, CONTE NDED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION FROM HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS JAFARI MOM IN VIKAS CO-OP CREDIT SOCIETY LTD. (TAX APPEAL NO.442, 443 A ND 863 OF 2013) ORDER DATED 15/01/2014 AND ALSO THE DECISION OF THE TRIBUNAL IN ITO VS M/S BHARAT PETROLEUM EMPLOYEES C O-OP CREDIT SOCIETY LTD. (ITA NO.6905/MUM/2013) ORDER DA TED 28/04/2015. THIS FACTUAL MATRIX WAS NO CONSENTED T O BE CORRECT BY THE LD. DR, SHRI RANDHIR GUPTA. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION F ROM THE ORDER OF THE TRIBUNAL DATED 28/04/2015 (ITA NO.6905/MUM/2013) FOR READY REFERENCE:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) - 33, MUMBAI DATED 02-09-2013 FOR THE A.Y. 2 010-11 IN THE MATTER OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER S ECTION 143(3) OF THE INCOME TAX ACT, 1961 DATED 16-01-2013. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL:- BOMBAY MERCANTILE CO-OP. BANK LTD. EMPLOYEES ITA NO.2937/MUM/2014 3 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING ASSESSEE'S APPEAL AND A LLOWING RELIEF U/S 8OP OF THE ACT IN THE CASE OF THE ASSESSEE CREDIT C O-OPERATIVE SOCIETY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT(A) ERRED I N HOLDING THAT THE CREDIT CO-OPERATI VE SOCIETY IS DIFFERENT FROM THE CREDIT CO-OPERATIVE BANK. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT(A) ERRED IN HOLDING THAT THE AMENDED PROVISION OF SECTION 80P(4) OF THE ACT IS NOT APPLICABLE TO THE CREDIT CO-OPERA TIVE SOCIETY. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFIC ER BE RESTORED. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE RESPON DENT ASSESEE IS A COOPERATIVE SOCIETY REGISTERED UNDER THE MAHARASHTR A C0- OPERATIVE SOCIETIES ACT, 1960. THE SOCIETY IS RUN B Y THE EMPLOYEES OF BHARAT PETROLEUM CORPORATION LTD. AND ITS MAIN ACTIVITY IS PROVIDING CREDIT FACILITIES TO ITS MEMB ERS ONLY, WHO HAPPEN TO BE THE EMPLOYEES OF BHARAT PETROLEUM CORP ORATION LTD. THE SOCIETY IS GIVING LOANS TO ITS MEMBERS AND ALSO ACCEPTING DEPOSITS FROM ITS MEMBERS. IN THE RETURN OF INCOME FILED FOR A.Y. 2010-11, IT DECLARED A GROSS TOTAL I NCOME OF RS. 80,98,490/- WHICH WAS CLAIMED AS EXEMPT IN TERMS OF SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT, 1961. THE A.O. DENIED THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 8 0P(2)(A)(I) OF THE ACT ON THE BASIS OF THE PROVISIONS OF SECTION 8 0P(4) OF THE ACT, WHICH WAS INSERTED BY FINANCE ACT 2006 W.E.F. APRIL, 1, 2007. THE A.O. WAS OF THE OPINION THAT AFTER THE IN SERTION OF SUB- SECTION (4) OF SECTION 80P EXEMPTION SHALL NOT BE A VAILABLE IN RELATION TO ANY CO-OPERATIVE BANK OTHER THAN PRIMAR Y AGRICULTURAL CREDIT SOCIETY OR PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. ACCORDING TO THE A.O. S UB CLAUSE BOMBAY MERCANTILE CO-OP. BANK LTD. EMPLOYEES ITA NO.2937/MUM/2014 4 (VIIA) WAS ALSO INSERTED IN CLAUSE (IV) OF SECTION 2 TO PROVIDE THAT THE PROFITS AND GAINS OF ANY BUSINESS OF BANKING (I NCLUDING PROVIDING CREDIT FACILITIES) CARRIED BY COOPERATIVE SOCIETY WITH ITS MEMBERS SHALL BE INCLUDED IN THE DEFINITION OF EXPR ESSION INCOME. ON THE BASIS OF HIS COMBINED READING OF S ECTIONS OF SECTION 2(24) (VIIA) AND SECTION 80P OF THE ACT AFT ER AMENDMENT BY FINANCE ACT, 2006, THE A.O. CONCLUDED THAT EVEN A CO- OPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT FACIL ITIES TO ITS MEMBERS WOULD BE DENIED THE EXEMPTION U/S 80P OF TH E ACT. ACCORDINGLY, THE A.O. ASSESSED THE TOTAL INCOME AT RS. 80,98,490/- AND REJECTED ASSESSEES CLAIM FOR DEDUC TION UNDER SECTION 80P OF THE ACT. 4. THE LD. CIT(A) HAS SINCE DISAGREED WITH THE A.O. PRIMARILY ON THE GROUND THAT THE ASSESSE-SOCIETY WAS NOT CARRYIN G OUT ANY BANKING FACILITIES AND THAT ITS ACTIVITIES WERE LIM ITED TO ITS MEMBERS ONLY. THE LD.CIT(A) ALSO HELD THAT THE ACTI VITIES OF THE ASSESSEE DO NOT FALL FOR CONSIDERATION AS BANKING A CTIVITIES AS DEFINED IN BANKING REGULATION ACT, 1949. IN COMING TO SUCH CONCLUSION, THE LD. CIT(A) HAS RELIED ON THE FOLLOW ING DECISIONS OF THE TRIBUNAL:- (I) ITO, WD 1(4) PUNE V/ JANKALYAN NAGRI SAHAKARI P ATSANSTHA LTD 54 SOT 60(PUNE)/24 TAXMMAN.COM 127(PUNE) (2012) (II) ITO V/S JAIN NAGRI PATSANSTHA LTD ITAT PUNE BE NCH (2010) (III) DCIT V/S JAYALAKSHMI MAHILA VIVIVDODESHAGALA SOUHARDA SAHAKARI LTD. 137 ITD 163(PANJI) (2012) BOMBAY MERCANTILE CO-OP. BANK LTD. EMPLOYEES ITA NO.2937/MUM/2014 5 (IV) SRI VASAVI MULTIPURPOSE VS CIT ITAT BANGALORE BENCH ORDER DATED 10,05.2015. 5. ACCORDINGLY, HE DIRECTED THE A.O. TO ALLOW DEDUC TION TO THE ASSESSEE UNDER SECTION 80(P)(2)(A)(I) OF THE ACT EX CEPT TO THE EXTENT OF INTEREST INCOME EARNED BY THE ASSESSE FRO M SBI, PATIALA. AGAINST THE AFORESAID DECISION OF THE LD. CIT(A), R EVENUE IS IN APPEAL BEFORE US. 6. BEFORE US THE LD. REPRESENTATIVE OF THE ASSESSEE , AT THE OUTSET, POINTED OUT THAT THE CONCLUSION DRAWN BY THE LD. CI T(A) IS IN ACCORDANCE WITH JUDGMENT OF HONBLE GUJARAT HIGH CO URT IN THE CASE OF CIT VS. JAFARI MOMIN VIKAS CO. OP. CREDIT S OCIETY LTD. [2014] 362 ITR 331 (GUJ). IN THIS CONTEXT THEFOLLOW ING DISCUSSION IN THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IS RE LEVANT:- THE ASSESSING OFFICER HELD THAT BY VIRTUE OF SECTI ON 80P(4), THE RESPONDENT-ASSESSEE WOULD NOT BE ENTITLED TO THE BE NEFITS OF DEDUCTION UNDER SECTION 80P. THE COMMISSIONER (APPEALS) AS WE LL AS THE TRIBUNAL REVERSED THE DECISION OF THE ASSESSING OFF ICER ON THE PREMISE THAT THE RESPONDENT-ASSESSEE NOT BEING A BANK, EXCL USION PROVIDED IN SUB-SECTION (4) OF SECTION 80P WOULD NOT APPLY. THI S, IRRESPECTIVE OF THE FACT THAT THE RESPONDENT WOULD NOT FALL WITHIN THE EXPRESSION 'PRIMARY AGRICULTURAL CREDIT SOCIETY'. HAD THIS BEEN THE PLAIN STATUTORY PROVISIONS UNDER CONSIDERATION IN ISOLATION, IN OUR OPINION, THE QUESTION OF LAW COUL D BE STATED TO HAVE ARISEN. WHEN, AS CONTENDED BY THE ASSESSEE, BY VIRT UE OF SUB-SECTION (4) ONLY CO-OPERATIVE BANKS OTHER THAN THOSE MENTIO NED THEREIN WERE MEANT TO BE EXCLUDED FOR THE PURPOSE OF DEDUCTION U NDER SECTION 80P, A QUESTION WOULD ARISE WHY THEN THE LEGISLATURE SPE CIFIED PRIMARY AGRICULTURAL CREDIT SOCIETIES ALONG WITH PRIMARY CO -OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANKS FOR EXCLUS ION FROM SUCH EXCLUSION AND, IN OTHER WORDS, CONTINUED TO HOLD SU CH ENTITY AS ELIGIBLE FOR DEDUCTION. HOWEVER, THE ISSUE HAS BEEN CONSIDER ABLY SIMPLIFIED BY VIRTUE OF THE CENTRAL BOARD OF DIRECT TAXES CIRCULA R NO. 133 OF 2007, DATED MAY 9, 2007. CIRCULAR PROVIDES AS UNDER : BOMBAY MERCANTILE CO-OP. BANK LTD. EMPLOYEES ITA NO.2937/MUM/2014 6 'SUBJECT: CLARIFICATION REGARDING ADMISSIBILITY OF DEDUCTION UNDER SECTION BOP OF THE INCOME-TAX ACT, 1961. 1. PLEASE REFER TO YOUR LETTER NO. DCUS/30688/2007, DATED MARCH 28, 2007, ADDRESSED TO THE CHAIRMAN, CENTRAL BOARD OF D IRECT TAXES, ON THE ABOVE GIVEN SUBJECT. 2. IN THIS REGARD, I HAVE BEEN DIRECTED TO STATE TH AT SUB-SECTION(4) OF SECTION 80P PROVIDES THAT DEDUCTION UNDER THE SAID SECTION SHALL NOT BE ALLOWABLE TO ANY CO-OPERATIVE BANK OTHER THAN A PRI MARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTUR AL AND RURAL DEVELOPMENT BANK. FOR THE PURPOSE OF THE SAID SUB-S ECTION, CO- OPERATIVE BANK SHALL HAVE THE MEANING ASSIGNED TO I T IN PART V OF THE BANKING REGULATION ACT, 1949. 3. IN PART V OF THE BANKING REGULATION ACT, 'CO-OPE RATIVE BANK MEANS A STATE CO-OPERATIVE BANK, A CENTRAL CO-OPERATIVE B ANK AND A PRIMARY COOPERATIVE BANK. 4. THUS, IF THE DELHI CO-OP. URBAN THRIFT AND CREDI T SOCIETY LTD. DOES NOT FALL WITHIN THE MEANING OF 'CO-OPERATIVE BANK' AS DEFINED IN PART V OF THE BANKING REGULATION ACT, 1949, SUB-SECTION (4 ) OF SECTION 80P WILL NOT APPLY IN THIS CASE. 5. THIS IS ISSUED WITH THE APPROVAL OF THE CHAIRMAN , CENTRAL BOARD OF DIRECT TAXES.' 7 FROM THE ABOVE CLARIFICATION, IT CAN BE GATHERED THAT SUB-SECTION (4) OF SECTION 80P WILL NOT APPLY TO AN ASSESSEE WHICH IS NOT A CO- OPERATIVE BANK. IN THE CASE CLARIFIED BY THE CENTRA L BOARD OF DIRECT TAXES, THE DELHI CO-OP. URBAN THRIFT AND CREDIT SOC IETY LTD. WAS UNDER CONSIDERATION. THE CIRCULAR CLARIFIED THAT TH E SAID ENTITY NOT BEING A CO-OPERATIVE BANK, SECTION 80P(4) OF THE AC T WOULD NOT APPLY TO IT. IN VIEW OF SUCH CLARIFICATION, WE CANNOT ENT ERTAIN THE REVENUE'S CONTENTION THAT SECTION 80P(4) WOULD EXCLUDE NOT ON LY THE CO- OPERATIVE BANKS OTHER THAN THOSE FULFILLING THE DES CRIPTION CONTAINED THEREIN BUT ALSO CREDIT SOCIETIES, WHICH ARE NOT CO -OPERATIVE BANKS. IN THE PRESENT CASE, THE RESPONDENT-ASSESSEE IS ADMITT EDLY NOT A CREDIT CO- OPERATIVE BANK BUT A CREDIT CO-OPERATIVE SOCIETY. T HE EXCLUSION CLAUSE OF SUB-SECTION(4) OF SECTION 80P, THEREFORE, WOULD NOT APPLY. IN THE RESULT, THE TAX APPEALS ARE DISMISSED. 7. APART FROM THIS, THE HONBLE KARNATAKA HIGH COU RT IN THE CASE OF CIT VS. SRI BILURU GURUBASAVA PATTINA SAHAK ARI SANGHA BOMBAY MERCANTILE CO-OP. BANK LTD. EMPLOYEES ITA NO.2937/MUM/2014 7 NIYAMITHA IN INCOME TAX APPEAL NO. 5006/2013 DATED 5TH FEBRUARY, 2014 ALSO CONSIDERED A SIMILAR ISSUE. THE FOLLOWING DISCUSSION IN THE JUDGMENT OF HONBLE KARNATAKA HIG H COURT IS RELEVANT:- SECTION 80P OF THE ACT DEALS WITH THE DEDUCTION OF INCOME OF A SOCIETY. IN THE CASE OF ANY ASSESSEE BEING A CO-OPE RATIVE SOCIETY, THE WHOLE OF THE AMOUNTS OF PROFITS AND GAINS OF BUSINE SS ATTRIBUTABLE TO ANY OF OTHER ACTIVITIES REFERRED TO SUB-SECTION (2) OF SECTION 80P SHALL BE DEDUCTED IN COMPUTING THE TOTAL INCOME OF THE AS SESSEE. IN OTHER WORDS, THE SAID INCOME IS NOT TAXABLE. IT IS A BENE FIT GIVEN TO THE CO- OPERATIVE SOCIETY. SECTION 80P(4) WAS INTRODUCED BY FINANCE ACT, 2006 WITH EFFECT FROM 01.04.2007 EXCLUDING THE SAID BENEFIT TO A CO- OPERATIVE BANK. THE SAID PROVISION READS AS UNDER:- ' (4) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN RELATION TO ANY COOPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOP MENT BANK. (A) 'CO-OPERATIVE BANK' AND 'PRIMARY AGRICULTURAL C REDIT SOCIETY' SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO TH EM IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949); (B) 'PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DE VELOPMENT BANK' MEANS A SOCIETY HAVING ITS AREA OF OPERATION CONFIN ED TO A TALUK AND THE PRINCIPAL OBJECT OF WHICH IS TO PROVIDE FOR LON G-TERM CREDIT FOR AGRICULTURAL AND RURAL DEVELOPMENT ACTIVITIES.' THEREFORE, THE INTENTION OF THE LEGISLATURE IS CLEA R. IF A CO-OPERATIVE BANK IS EXCLUSIVELY CARRYING ON BANKING BUSINESS, T HEN THE INCOME DERIVED FROM THE SAID BUSINESS CANNOT BE DEDUCTED I N COMPUTING THE TOTAL INCOME OF THE ASSESSEE. THE SAID INCOME IS LI ABLE FOR TAX. A CO- OPERATIVE BANK AS DEFINED UNDER THE BANKING REGULAT ION ACT INCLUDES THE PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMAR Y COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. THE LEGISL ATURE DID NOT WANT TO DENY THE SAID BENEFITS TO A PRIMARY AGRICUL TURAL CREDIT SOCIETY OR A PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEV ELOPMENT BANK. THEY DID NOT WANT TO EXTEND THE SAID BENEFIT TO A C O-OPERATIVE BANK WHICH IS EXCLUSIVELY CARRYING ON BANKING BUSINESS I .E. THE PURPORT OF THIS AMENDMENT. THEREFORE, AS THE ASSESSEE IS NOT A CO- OPERATIVE BANK CARRYING ON EXCLUSIVELY BANKING BUSINESS AND A S IT DOES NOT POSSESS A LICENCE FROM RESERVE BANK OF INDIA TO CAR RY ON BUSINESS, IT IS NOT A CO-OPERATIVE BANK. IT IS A CO-OPERATIVE SO CIETY WHICH ALSO BOMBAY MERCANTILE CO-OP. BANK LTD. EMPLOYEES ITA NO.2937/MUM/2014 8 CARRIES ON THE BUSINESS OF LENDING MONEY TO ITS MEM BERS WHICH IS COVERED UNDER SECTION 80P(2)(A)(I) I.E. CARRYING ON THE BUSINESS OF BANKING FOR PROVIDING CREDIT FACILITIES TO ITS MEMB ERS. THE OBJECT OF THE AFORESAID AMENDMENT IS NOT TO EXCLUDE THE BENEFIT E XTENDED UNDER SECTION 80P(1) TO SUCH SOCIETY. 8. FOLLOWING THE AFORESAID JUDGMENTS OF THE HONBL E GUJARAT HIGH COURT AND HONBLE KARNATAKA HIGH COURT AND IN THE ABSENCE OF ANY CONTRARY DECISION BROUGHT TO OUR NOT ICE BY THE LD. D.R., THE IMPUGNED DECISION OF THE LD. CIT(A) IS HE REBY AFFIRMED. AS A CONSEQUENCE, THE APPEAL OF THE REVENUE IS DISM ISSED. 9. ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF T HE HEARING ON 28-04-2015. 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCLUSION DR AWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, CONCL USION DRAWN IN THE AFORESAID ORDER OF THE TRIBUNAL, ASSER TIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSI TION AND ANALYZED, WE NOTE THAT THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) HAS ALREADY EXAMINED THE EXPENDITURE ACCO UNT OF THE ASSESSEE. THE ASSESSEE RECEIVED INTEREST OF RS.16, 74,584/- ON FIXED DEPOSITS AND NO OTHER INTEREST INCOME FROM FD S WAS CREDITED. IN THE BALANCE SHEET, THE ACCRUED INTERE ST, AS ON 31/03/2010, ON FDS, WAS SHOWN AT RS.30,46,494/- WHE REAS AS ON 31/03/2009, IT WAS RS.23,90,648/-. THE INTER EST HAS BEEN RECEIVED EITHER FROM A SCHEDULE BANK OR A COOP ERATIVE BANK. NO INTEREST INCOME HAS BEEN RECEIVED BY THE ASSESSEE FROM ITS INVESTMENT IN A COOPERATIVE SOCIETY. IN T HE PRESENT BOMBAY MERCANTILE CO-OP. BANK LTD. EMPLOYEES ITA NO.2937/MUM/2014 9 APPEAL, THE ASSESSEE HAS INVESTED STATUTORY RESERVE D FUNDS IN FIXED DEPOSITS WITH SCHEDULE BANKS/COOPERATIVE BANK S. SUCH RESERVES FUNDS ARE EITHER SURPLUS FUNDS OR WHICH CA NNOT BE UTILIZED OR APPROPRIATED BY THE ASSESSEE FOR ITS DA Y TO DAY ACTIVITIES INCLUDING GRANTING OF LOAN TO ITS MEMBER S, MEANING THEREBY, SUCH RESERVE FUNDS HAS TO BE INVESTED ONLY FOR THE HIGHLY RESTRICTED PURPOSED AS MENTIONED IN THE BYE LAWS OF THE ASSESSEE SOCIETY. ALL THIS FACTS AND THE LEGAL POS ITION ALONG WITH THE DECISION FROM HONBLE GUJARAT HIGH COURT A ND KARNATAKA HIGH COURT HAVE BEEN DISCUSSED BY THE TRI BUNAL WHILE DISMISSING THE APPEAL OF THE ASSESSEE VIDE OR DER DATED 28/04/2015. IN THE ABSENCE OF ANY CONTRARY DECISION , BROUGHT TO OUR NOTICE BY EITHER SIDE, WE AFFIRM THE CONCLUS ION DRAWN IN THE IMPUGNED ORDER. FINALLY THE APPEAL OF THE REVENUE IS DISMISSED THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 26/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 27/10/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI BOMBAY MERCANTILE CO-OP. BANK LTD. EMPLOYEES ITA NO.2937/MUM/2014 10 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.