TERRA CO-OP HSG. SOC.LTD., MUMBAI V. ITO-21(3)(4), MUMBAI

ITA 2979/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2500 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 09-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Assessee Lawyers: MANOJ D MAHIMKAR
• Keywords: Corroborative evidences
• Section: 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 2979 / MUM . /2018 ( ASSESSMENT YEAR : 20 14 15 ) TERRA CO OPERATIVE HOUSING SOCIETY LTD. OLD SIMPEX MILLS COMPOUND NEAR JACOB CIRCLE, KESHAVRAO KHADYE MARG, MAHALAXMI (E) MUMBAI 400 011 PAN AABAT9818P . APPELLANT V/S INCOME TAX OFFICER WARD 2 1( 3 ) (4) , MUMBAI . RESPONDENT ASSESSEE BY : SHRI MANOJ D. MAHIMKAR REVENUE BY : SHRI AJAY PRATAP SINGH DATE OF HEARING 27 . 0 2 .201 9 DATE OF ORDER 08.03.2019 O R D E R A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 6 TH FEBRUARY 2018 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 33 , MUMBAI , FOR THE ASSESSMENT YEAR 20 14 1 5 . 2 . THE BASIC GRIEVANCE OF THE ASSESSEE IN THE PRESENT APPEAL IS DISALLOWANCE OF DEDUCTION CLAIMED UNDER SECTION 80P(2)(D) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). 2 TERRA CO OPERATIVE HOUSING SOCIETY LTD. 3 . BRIEF FACTS ARE, THE ASSESSEE, AS STATED BY THE ASSESSING OFFICER, IS A CO OPERATIVE HOUSING SOCIETY. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 17 TH JULY 2015, DECLARING NIL INCOME. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER, WHILE VERIFYING THE RETURN OF INCOME FILED BY TH E ASSESSEE, NOTICED THAT THE ASSESSEE IN THE RELEVANT PREVIOUS YEAR HAS EARNED INTEREST INCOME OF ` 40,92,129, FROM INVESTMENT MADE IN FIXED DEPOSIT WITH OTHER CO OPERATIVE BANK. HOWEVER, THE ASSESSEE HAS CLAIMED DEDUCTION OF THE ENTIRE AMOUNT UNDER SECTIO N 80P(2)(D) OF THE ACT. BEING OF THE VIEW THAT INTEREST RECEIVED FROM THE INVESTMENT MADE WITH OTHER CO OPERATIVE BANK WILL NOT QUAL I FY FOR DEDUCTION UNDER SECTION 80P OF THE ACT, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE DEDUCTION SHOULD NOT BE ALLOWED. THOUG H , THE ASSESSEE WHILE OBJECTING TO THE DISALLOWANCE PROPOSED BY THE ASSESSING OFFICER JUSTIFIED THE DEDUCTION CLAIMED UNDER SECTION 80P(2)(D) OF THE ACT, HOWEVER, THE ASSESSING OFFICER REJECTING THE CONTENTIONS OF THE ASSESSEE D ISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80P(2)(D) OF THE ACT BY HOLDING THAT CO OPERATIVE BANK IS A COMMERCIAL BANK, HENCE, DOES NOT COME WITHIN THE PURVIEW OF CO OPERATIVE SOCIETY AS REFERRED TO IN SECTION 80P(2)(D) OF THE ACT. WHILE DOING SO, HE RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN TOTGARS CO OPERATIVE CELL SOCIETY LTD. V/S ITO, 3 TERRA CO OPERATIVE HOUSING SOCIETY LTD. [2010] 188 TAXMAN 288 (SC). ACCORDINGLY, HE BROUGHT TO TAX THE INTEREST INCOME OF ` 40,92,129. 4 . THOUGH, THE ASSESSEE CHALLENGED THE AFOR ESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY, HOWEVER, HE SUSTAINED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 5 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , ASSESSEES APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS) WAS DECIDED EX PARTE , S INCE , DUE TO LACK OF COMMUNICATION WITH THE ASSESSEE THE EARLIER COUNSEL DID NOT APPEAR AND REPRESENT THE CASE. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , ASSESSEE FULFILLS ALL THE CONDITIONS OF SECTION 80P(2)(D) OF THE ACT, HENCE, IS ELIGIBLE TO CLA IM DEDUCTION UNDER THE SAID PROVISION. HE SUBMITTED , THE ASSESSING OFFICER AS WELL AS LEARNED COMMISSIONER (APPEALS) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE IS A CO OPERATIVE SOCIETY NOT ENGAGED IN BUSINESS ACTIVITY, HENCE, THE DECISION OF THE HON' BLE SUPREME COURT IN TOTGARS CO OPERATIVE CELL SOCIETY LTD. (SUPRA) AND OTHER DECISIONS REFERRED TO BY THEM ARE NOT APPLICABLE TO THE ASSESSEE. HE SUBMITTED , THESE ARGUMENTS/ PLEADINGS COULD NOT BE ADVANCED BEFORE THE LEARNED COMMISSIONER (APPEALS) SINCE TH E APPEAL WAS DECIDED EX PARTE. HE SUBMITTED , GIVEN AN OPPORTUNITY THE ASSESSEE WOULD MAKE ALL EFFORTS TO 4 TERRA CO OPERATIVE HOUSING SOCIETY LTD. CONVINCE THE LEARNED COMMISSIONER (APPEALS) ABOUT ALLOWABILITY OF ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT. 6 . THE LEARNED DEPAR TMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS). 7 . I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. THE DISPUTE BETWEEN THE PARTIES IS WITH REGARD TO THE ALLOWABILITY OF DEDUCTION CLAIMED UNDER S ECTION 80P(2)(D) OF THE ACT. THE ASSESSEES CLAIM HAS BEEN REJECTED BY THE DEPARTMENTAL AUTHORITIES RELYING UPON THE RATIO LAID DOWN IN CERTAIN JUDICIAL PRECEDENTS INCLUDING THE DECISION OF THE HON'BLE SUPREME COURT IN TOTGARS CO OPERATIVE CELL SOCIETY LTD . (SUPRA). IT IS THE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE BEFORE ME THAT THE DECISION RENDERED IN CASE OF TOTGARS CO OPERATIVE CELL SOCIETY LTD. (SUPRA) IS COMPLETELY ON DIFFERENT SET OF FACTS, HENCE, W OULD NOT BE APPLICABLE TO THE ASSESSEES CASE. IT IS OBSERVED , ASSESSEES APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS) WAS DECIDED EX PARTE IN THE ABSENCE OF ANY REPRESENTATION ON BEHALF OF THE ASSESSEE. IT IS THE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE BEF ORE ME THAT G IVEN AN OPPORTUNIT ASSESSEE WOULD BE ABLE TO CONVINCE THE LEARNED COMMISSIONER (APPEALS) ABOUT ITS CLAIM OF DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT. CONSIDERING THE AFORESAID SUBMISSIONS OF THE 5 TERRA CO OPERATIVE HOUSING SOCIETY LTD. LEARNED AUTHORISED REPRESENTATIVE AND WITHOUT ENTERING IN TO THE CONTROVERSY RELATING TO THE CAUSE OF NON APPEARANCE OF THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY, I DEEM IT APPROPRIATE TO RESTORE THE ISSUE RELATING TO ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT TO THE FILE OF THE LEAR NED COMMISSIONER (APPEALS) FOR DE NOVO ADJUDICATION. THE LEARNED COMMISSIONER (APPEALS) MUST DEAL WITH ALL THE SUBMISSIONS TO BE MADE BY THE ASSESSEE AND THE DECISIONS TO BE CITED AND DECIDE THE ISSUE THROUGH A SPEAKING AND WELL REASONED ORDER AFTER DUE OP PORTUNITY OF BEING HEARD TO THE ASSESSEE. I ALSO DIRECT THE ASSESSEE TO RESPOND TO THE NOTICE OF HEARING TO BE ISSUED BY THE LEARNED COMMISSIONER (APPEALS) AND CO OPERATE IN FINALIZING THE PROCEEDING BY MAKING PROPER SUBMISSIONS WITH SUPPORTING EVIDENCES A ND CASE LAWS. IT IS MADE CLEAR , I HAVE NOT EXPRESSED ANY OPINION ON THE MERITS OF THE DISPUTED ISSUE. WITH THE AFORESAID OBSERVATIONS, GROUNDS RAISED ARE ALLOWED FOR STATISTICAL PURPOSES. 8 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08.03.2019 SD/ SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 08.03.2019 6 TERRA CO OPERATIVE HOUSING SOCIETY LTD. COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI