ITO 1(3)(1), MUMBAI V. MALAD SAHAKARI BANK LTD, MUMBAI

ITA 3489/MUM/2010

• Counselvise Citation: 348919914 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 03-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, MUMBAI. BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A NO.3489/ MUM/2010 ASSESSMENT YEAR: 2005-06 ITO 1(3)(1) .. APPELLANT AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-20 VS MALAD SAHAKARI BANK LTD. .. RESPONDEN T 6, SUJATA RANI SATI MARG, MALAD(E), MUMBAI-400097 PA NO.AAAAT 0320 R APPEARANCES: P.C.MAURYA, FOR THE APPELLANT AARTI SATHE , FOR THE RESPONDENT DATE OF HEARING : 28.9.2011 DATE OF PRONOUNCEMENT : 30 -09-2011 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CALLED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 10 TH FEBRUARY, 2010, IN THE MATTER OF ASSESSMENT 2 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUND: WHETHER ON THE FACTS OF THE CASE AND IN LAW, THE C IT(A) ERRED IN HOLDING THAT INCOME IN THE FORM OF INTEREST FROM IN VESTMENT OF SURPLUS FUND WITH OTHER BANKS QUALIFY FOR DEDUCTION U/S.80P (2)(A) OF THE ACT WHICH IS NO INCONSONANCE WITH THE SUPREME COURT DEC ISION IN THE CASE OF M/S. THE TOTGARS COOPERATIVE SALE SOCIETY LTD V. ITO, KARNATAKA IN CIVIL APPEAL NO.1622 OF 2010 (ARISING OUT OF SLP (C ) NO.7572 OF 2009) DECIDED ON 8.2.2010. 2. FACTS IN BRIEF ARE THAT DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER S ECTION 143(3), INTER ALIA, OBSERVING THAT THE INCOME RECEIVED ON FIXED DEPOSIT S AMOUNTING TO RS.13,43,280 FROM BANKS OTHER THAN CO-OPERATIVE BANK ARE NOT ELI GIBLE FOR BENEFIT OF SECTION 80P(2) OF THE INCOME TAX ACT. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) FOLLOWING THE DECISION OF THE I TAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-04 , HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80P ON INTEREST INCOME RECEIVED BY IT FROM BANKS OTHER THA N CO-OPERATIVE BANK. THE ASSESSING OFFICER IS NOT SATISFIED AND IS IN APPEAL BEFORE US. 3. WHILE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ACCEPTS THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF THE C OOPERATIVE BENCH OF THIS TRIBUNAL AS ALSO AN UNREPORTED JUDGMENT OF HONBLE BOMBAY HI GH COURT IN THE CASE OF ITO VS. THE MAHANAGAR COOPERATIVE BANK LTD., DATED 28.7.201 1 IN ITA NO.123 OF 2010 , HE PLACES HIS RELIANCE OF HONBLE SUPREME COURTS JUDG MENT IN THE CASE OF THE TOTGARS COOPERATIVE SALE SOCIETY LTD, 229 CTR 209(SC). WHE N IT WAS POINTED OUT TO HIM THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF THE MAHANA GAR COOPERATIVE BANK LTD., HAS DULY CONSIDERED THE SAID JUDGMENT OF HONBLE SUPREM E COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD (SUPRA), HE HAD NOTHIN G TO SAY EXCEPT TO REITERATE THAT WHAT HAS BEEN HELD BY HONBLE SUPREME COURT IN THE CASE OF THE MAHANAGAR COOPERATIVE BANK LTD.(SUPRA) APPLIES EQUALLY IN THE CASE OF THE MAHANAGAR COOPERATIVE BANK LTD(SUPRA). 3 4. WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FA VOUR OF THE ASSESSEE BY HONBLE BOMBAY HIGH COURTS JUDGMENT IN THE CASE OF THE MAHANAGAR COOPERATIVE BANK LTD (SUPRA) AS ALSO COORDINATE BENCH OF THIS T RIBUNAL IN ASSESSEE;S OWN CASE (SUPRA). AS REGARDS RELIANCE PLACED BY LEARNED DEP ARTMENTAL REPRESENTATIVE IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD(SUPRA) , WE HAVE NOTED THAT THEIR LORDSHIPS OF HONBLE BOMBAY HIGH COURT HAVE DISTING UISHED THE SAID JUDGMENT BY, INTER ALIA, OBSERVING AS FOLLOWS: IN OUR OPINION, THERE IS NO MERIT IN THE ABOVE CONT ENTION BECAUSE IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD(SUPRA),THE APE X COURT IN PARA 11 OF ITS JUDGMENT HAS HELD THAT THE DECISIONS RELATING TO THE COOPERATIVE BANKS ARE DISTINGUISHABLE FROM THE CASE S RELATING TO THE COOPERATIVE SALE SOCIETY. MOREOVER, THE APEX COURT IN THE CASE OF NAWANSHAHAR CENTRAL COOPERATIVE BANK (SUPRA) HAS HE LD THAT THE INVESTMENTS MADE BY THE COOPERATIVE BANKS WITH A VI EW TO EARN INTEREST CONSTITUTE BANKING BUSINESS. AS THE INCOM E ARISING FROM INVESTMENTS ARE ATTRIBUTABLE TO THE BUSINESS OF BAN KING ASSESSABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS, DED UCTIBLE U/S.80P(2)(A)(I) OF INCOME TAX ACT, 1961 WOULD BE A LLOWABLE TO THE ASSESSEE. THUS, THE DECISION OF THE APEX COURT IN THE CASE OF TOGARS COOPERATIVE SALE SOCIETY LTD (SUPRA) WOULD NOT BE A PPLICABLE TO THE FACTS OF THE PRESENT CASE. 5. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLL OWING THE ESTEEMED VIEWS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF T HE MAHANAGHAR COOPERATIVE BANK LTD (SUPRA) AND ALSO THE DECISION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE (SUPRA), WE UPHOLD THE CONCLUSIONS ARRIVED AT BY TH E CIT(A) AND DECLINE TO INTERFERE. 6. IN THE RESULT, APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2011 SD/- (D.MANMOHAN) VICE PRESIDENT SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 30 TH SEPTEMBER, 2011 PARIDA 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),2 MUMBAI 4. COMMISSIONER OF INCOME TAX, 1 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI