A.C.I.T.-23(3), MUMBAI V. M/S. THE MAHARAQSHTRA STATE CO.OP, HSG FIN CORPN. LTD, MUMBAI

ITA 3086/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9777 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 02-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGHSHEN
• Assessee Lawyers: SANJEEV V JOSHI
• Keywords: Revised return

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM & SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 3086/MUM/2016 ( / ASSESSMENT YEAR: 2012 - 13 ) A CIT - 23 (3) MATRU MANDIR, 1 ST FLOOR, R. NO. 104, TARDEO ROAD, MUMBAI - 400007 / VS. M/S MAHARASHTRA STATE CO - OPERATIVE HOUSING FINANCE CORPORATION LTD. C - 21, E - BLOCK, HOUSE FIN. BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400051 . ./ ./ PAN NO. AAAAT0072E ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI M. C. OMI NINGHSHEN, DR / RESPONDENTBY : SHRI SANJEEV V. JOSHI, AR / DATE OF HEARING : 08 .02 .1 8 / DATE OF PRONOUNCEMENT : 21.03.18 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 34, MUMBAI DATED 05.02.2016 F OR AY 20 12 - 13 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 3086 /MUM/201 6 M/S MAHARASHTRA STATE CO - OPERATIVE HOUSING FINANCE CORPORATION LTD. 1. ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE CASE IN LAW. THE LD. CIT(A) - 34,MUMBAI ERRED IN DIRECTING TO ALLOW DEDUCTION U/S 80P(2)(I)(A) OF RS 12474,943/ - FOR INTEREST RECEIVED FROM INVESTMENT WITH OTHER CO - OPERATIVE SOCIETIES THROUGH THE INVESTMENT WAS MADE AS PER STATUTORY REQUIREMENT UNDER MAHARASHTRA CO - OPERATIVE SOCIETIES ACT DURING ITS ORDINARY COURSE OF BUSINESS. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD, CIT(APPEALS) - 34, MUMBAI ON THE ABOVEGROUNDS BE SET ASIDE AND THAT OF THE A 0 BE REST ORED. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER AMEND AND MODIFY ANY OR ALL GROUND OF APPEAL 2. THE B RIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO - OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE ASSESSEE SOCIETY HAD INVESTED ITS FUNDS IN OTHER CO - OPERATIVE SOCIETIES AS PER THE STATUTORY REQUIREMENTUNDER MAHARASHTRA CO - OPERATIVE SOCIETIES ACT. THE ASSESSEE RECEIVEDINTEREST OF RS.11 , 24,74 , 943/ - FROM THE INVESTMENTS WITH OTHER CO - OPERATIVE SOCIETIES. AS PER THE, ASSESSEE , DEDUCTION U/S,80P(2) WAS CLAIMED SHORT BY 3 I.T.A. NO. 3086 /MUM/201 6 M/S MAHARASHTRA STATE CO - OPERATIVE HOUSING FINANCE CORPORATION LTD. RS.1,24,74,943/ - INADVERTENTLY DUE TO TECHNICAL MISTAK E. THE AO DISALLOWED THE CLAIM OF DEDUCTION U/S .80P(2)(D) MADE BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS FOR THE FOLLOWING TWO REASONS:(A ) THE CLAIM WAS NOR, MADE IN THE RETURN OF INCOME EITHER ORIGINAL OR REVISED AND (B) THE CLAIM U/S.80P(2)(D)EVEN OTHERWISE WAS NOT ALLOWABLE AS INTERESTWAS RECEIVED ON SURPLUS FUNDS PARKED WITH OTHER CO - OPERATIVE BANKS. THE AO EXPRESSED HIS OPINION THAT DEDUCTION U/S 80P(2)(D) IS NOT AVAILABLE ON THE INTEREST EARNED BY THE ASSESSEE FROM THE SURPLUS FUNDS. A GGRIE VED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF B OTH THE PARTIES PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. NOW BEFORE US, THE REVENUE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE ABOVE GROUNDS. GROUND NO. 1. 3. THIS GROUND RAISED BY THE REVENUE RELATES TO CHA LLENGING THE ORDER OF LD. CIT(A) IN DIRECTING TO ALLOW DEDUCTION U/S 80P(2)(I)(A) OF RS 1 , 24 , 74,943/ - FOR INTEREST RECEIVED FROM 4 I.T.A. NO. 3086 /MUM/201 6 M/S MAHARASHTRA STATE CO - OPERATIVE HOUSING FINANCE CORPORATION LTD. INVESTMENT WITH OTHER CO - OPERATIVE SOCIETIES THROUGH THE INVESTMENT WAS MADE AS PER STATUTORY REQUIREMENT UNDER MAHARASHTRA CO - OPERATIVE SOCIETIES ACT DURING ITS O RDINARY COURSE OF BUSINES S. 4. LD. DR APPEARING ON BE HALF OF THE REVENUE SUBMITTED THAT ASSESSEE ITSELF HAD FILED RETURN SHOWING INCOME OF RS. 1,24,79,943 AND THE ACKNOWLEDGEMENT OF RETURN FILED BY THE ASSESSEE IS THE PROOF OF IT. IT WAS FURTHER SUBMITTED BY LD. DR THAT INITIALLY THE ASSESSEE HAS NOT RAISED ANY CLAIM IN RESPECT OF DEDUCTION OF RS. 1,24,79,943/ - EITHER IN THE RETURN ORIGINALLY FILED BY THE ASSESSEE OR THEREAFTER. LD. DR FURTHER SUBMITTED THAT ASSESSEE CAN ONLY REVISE THE CLAIM BY FILING REV ISED RETURN, HOWEVER NO REVISED RETURN WAS FILED BY THE ASSESSEE. LD. DR RELIED UPON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA LTD 248 ITR 323 (SC) WHEREIN IT WAS HELD THAT THE CLAIM OF THE ASSESSEE CANNOT BE REVISED BY FILING SUBMISSIONS DURING THE COURSE OF ASSESSMENT. IT WAS FURTHER SUBMITTED BY LD. DR THAT THE CLAIM OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT IS NOTHING BUT REVISION OF INCOME WHICH IS 5 I.T.A. NO. 3086 /MUM/201 6 M/S MAHARASHTRA STATE CO - OPERATIVE HOUSING FINANCE CORPORATION LTD. NOT ALLOWED EXCEPT BY FILING REVISED RETUR N AS HELD BY HONBLE SUPREME COURT. LD. DR FURTHER SUBMITTED THAT ASSESSEE HAD KEPT SURPLUS FUNDS WITH OTHER COOPERATIVE SOCIETIES AND THUS THE INTEREST EARNED IS NOT AN INTEREST EARNED ON AMOUNT ON THE INVESTMENT MADE IN OTHER COOPERATIVE SOCIETIES, BUT IT IS THE INTEREST EARNED FROM THE BANK ON THE SURPLUS FUNDS OF THE ASSESSEE. THEREFORE, THIS INTEREST AMOUNT IS OUT OF THE PURVIEW OF THE PROVISIONS OF SECTION 80P(2)(D) OF THE I.T. ACT AND THE DEDUCTION ON THE SAID AMOUNT IS NOT ALLOWABLE. LD. DR ALSO RELIED UPON THE ORDERS PASSED BY COORDINATE BENCH OF HONBLE ITAT IN THE CASE OF M/S VAIBHAV COOPERATIVE CREDIT SOCIETY IN ITA NO. 5819 & 5217/MUM/2014 WHEREIN THE HONBLE ITAT WHILE RELYING UPON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD (2010) 229 CTR (SC) 209 HAS HELD THAT THE INTEREST RECEIVED BY A COOPERATIVE SOCIETY FROM INVESTMENT OF ITS SURPLUS FUNDS IS ASSESSABLE UNDER THE HEAD I NCOME FROM OTHER SOURCES AND DEDUCTION U/S 80P IS NOT AVAILABL E IN RESPECT OF SUCH INTEREST AND DIVIDEND INCOME. 6 I.T.A. NO. 3086 /MUM/201 6 M/S MAHARASHTRA STATE CO - OPERATIVE HOUSING FINANCE CORPORATION LTD. 5. ON THE OTHER HAND LD. AR RELIED UPON THE ORDERS PASSED BY LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE HAD NOT CLAIMED DEDUCTION U/S 80P(2)(D) IN THE RETURN OF INCOME . LD. AR RELIED UPON THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VRS. SHETH DEVELOPERS PVT. LTD. AND CIT VRS. PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. (349 ITR 233). IT WAS FURT HER SUBMITTED BY LD. AR THAT THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE GOETZ INDIA LTD 248 ITR 323 (SC) IS CONCERNED, THE SAID DECISION DOES NOT PROV ING THE APPELLANT AUTHORITY FROM ENTERTAINING SUCH CLAIMS. LD. AR FURTHER SUBMITTED THAT AS FAR AS THE CLAIM FOR DEDUCTION U/S 80P(2)(D) IS CONCERNED, THIS CLAUSE ALLOWED DEDUCTION FOR THE WHOLE OF THE INTEREST AND DIVIDEND INCOME DERIVED BY THE COOPERATIVE SOCIETIES. LD. AR FURTHER S UBMITTED THAT THIS SECTION DOES NOT DIFFERENTIATE BETWEEN INVESTMENTS MADE OF COMPULSION AND OUT OF SURPLUS FUNDS. LD. AR FURTHER SUBMITTED THAT ALL THE INVESTMENTS WITH OTHER COOPERATIVE SOCIETIES REPRESENTS INVESTMENTS MADE OUT OF COMPULSION I.E. TO COMPLY WITH STATUTORY REQUIREMENTS AND NOT OUT OF SURPLUS FUNDS. IN THIS RESPECT, LD. AR RELIED UPON THE 7 I.T.A. NO. 3086 /MUM/201 6 M/S MAHARASHTRA STATE CO - OPERATIVE HOUSING FINANCE CORPORATION LTD. JUDGMENT IN THE CASE OF CIT VRS. DOBA CO - OPERATIVE SUGAR MILL S LTD. (230 ITR 774), CIT VRS. DUGDH SAHKARI SANGH LTD. (277 ITR 35) AND CIT VRS. KANGRA CO - OPERATIVE BANK LTD. (309 ITR 106). 6 . WE HAVE HEARD COUNSELS FOR BOTH THE PARTIES AT LENGTH AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. WE FIND THAT T HE ORDERS PASSED BY COORDINATE BENCH OF HONBLE ITAT IN THE CASE OF M/S VAIBHAV COOPERATIVE CREDIT SOCIETY IN ITA NO. 5819 & 5217/MUM/2014 WHEREIN THE HONBLE ITAT WHILE RELYING UPON THE JUDGMENT OF HONB LE SUPREME COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD (2010) 229 CTR (SC) 209 HAS HELD THAT THE INTEREST RECEIVED BY A COOPERATIVE SOCIETY FROM INVESTMENT OF ITS SURPLUS FUNDS IS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES AND DEDU CTION U/S 80P IS NOT AVAILABLE IN RESPECT OF SUCH INTEREST AND DIVIDEND INCOME. WHEREAS O N THE CONTRARY, LD. AR HAS CATEGORICALLY SUBMITTED THAT THE INVESTMENTS WITH OTHER COOPERATIVE SOCIETIES WERE MADE OUT OF COMPULSION I.E. TO COMPLY WITH STATUTORY REQU IREMENTS AND NOT 8 I.T.A. NO. 3086 /MUM/201 6 M/S MAHARASHTRA STATE CO - OPERATIVE HOUSING FINANCE CORPORATION LTD. OUT OF SURPLUS FUNDS AND I N THIS RESPECT, LD. AR RELIED UPON VARIOUS JUDGMENTS AS STATED ABOVE. BE THAT AS IT MAY, AFTER CONSIDERING THE FACTS OF THE PRESENT CASE AND HEARING THE COUNSELS AT LENGTH, WE FIND THAT NOWHERE IS MENTIONED AS TO WHICH WAS THE STATUTORY REQUIREMENTS WHICH WAS REQUIRED TO BE COMPLIED WITH BY THE ASSESSEE AND AS TO HOW THE INVESTMENTS MADE BY THE ASSESSEE WAS OUT OF COMPULSION AND MOREOVER THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF TOTGARS COOPERATIVE S ALE SOCIETY LTD (2010) 229 CTR (SC) 209 WAS NOT FOUND TO BE MENTIONED OR DISCUSSED IN ANY OF THE ORDERS PASSED BY THE REVENUE AUTHORITIES. CONSIDERING THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF AO WITH A DIRECTION TO PASS AFRESH ORDER AFTER SPECIFICALLY DISCUSSING THE NATURE OF COMPULSION OR STATUTORY REQUIREMENT OF MAKING INVESTMENT AND ALSO AFTER CONSIDERING THE APPLICABILITY OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD (2010) 229 CTR (SC) 209 . IT IS NEEDLESS HERE TO MENTION THAT BEFORE PASSING THE ORDER OF 9 I.T.A. NO. 3086 /MUM/201 6 M/S MAHARASHTRA STATE CO - OPERATIVE HOUSING FINANCE CORPORATION LTD. ASSESSMENT, THE AO SHALL PROVIDE SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSE. BEFORE PARTING, WE MAY MAKE IT CLEAR THAT OUR DECISION TO RESTORE THE MATTER BACK TO THE FILE OF AO SHALL IN NO WAY BE CONSTRUED AS HAVING ANY REFLECTION OR EXPRESSION ON THE MERITS OF THE DISPUTE, WHICH SHALL BE ADJUDICATED BY THE AO INDEPENDENTLY IN ACCORDANCE WITH LAW. WITH THESE DIRECTIONS, THIS GROUND RA ISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. GROUND NO. 2 & 3 7 . THESE GROUNDS ARE GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. 8 . IN THE NET RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH , 2018 SD/ - SD/ - ( R. C. SHARAM ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 21 . 03 .201 8 SR.PS . DHANANJAY 10 I.T.A. NO. 3086 /MUM/201 6 M/S MAHARASHTRA STATE CO - OPERATIVE HOUSING FINANCE CORPORATION LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI