ACIT 23(3), MUMBAI V. M/s THE SALSETTE CATHOLIC CO-OP. HOUSING LTD., MUMBAI

ITA 3870/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5442 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 31-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA
• Keywords: TDS; Capital Gains
• Section: 80P; 194A; 13; 2(19); 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI S. RIFA UR RAHMAN, ACCOUNTANT MEMBER IT A NO. 3870 /MUM./2019 ( ASSESSMENT YEAR : 20 13 14 ) ITA NO. 3871/MUM./2019 ( ASSESSMENT YEAR : 20 14 15 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 23(3), MUMBAI . APPELLANT V/S THE SALSETTE CATHOLIC CO OPERATIVE HOUSING LTD. , THE BANDRA GYMKHANA 42 ST. ANDREWS ROAD, BANDRA (W) MUMBAI 400 050 PAN AAAAT0195N . RESPONDENT REVENUE BY : SHRI T.S. KHALSA ASSESSEE BY : SHRI VIJAY MEHTA DATE OF HEARING 26 .0 4 .202 1 DATE OF ORDER 13.05.2021 O R D E R PER S. RIFAUR RAHMAN, A.M. THE CAPTIONED APPEAL S HA VE BEEN FILED BY THE REVENUE CHALLENGING TWO SEPARATE ORDER S DATED 1 5 TH MARCH 2019 FOR A.Y. 20013 14 AND ORDER DATED 20 TH MARCH 2019 FOR A.Y. 2014 15 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 32 , MUMBAI . 2. SINCE BOTH THESE APPEALS PERTAIN TO THE SAME ASSESSEE INVOLVING ONE COMMON ISSUE WHICH AR OSE OUT OF MUTATIS MUTANDIS IDENTICAL S ET OF 2 THE SALSETTE CATHOLIC CO OPERATIVE HOUSING LTD. FACTS AND CIRCUMSTANCES, THEREFORE, AS A MATTER OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. HOWEVER, IN ORDER TO UNDERSTAND THE IMPLICATION, IT WOULD BE NECESSARY TO TAKE NOTE OF THE FACTS OF ONE APPEAL. WE ARE ACCORDINGLY NARRATING THE FACTS, AS THEY APPEAR IN THE APPEAL IN ITA NO.3870 /MUM./201 9 , FOR ASSESSMENT YEAR 20 13 14, THE DECISION OF WHICH WILL BE APPLICABLE TO THE APPEAL FOR A.Y. 2014 15 AS WELL , SINCE THE ISSUE INVOLVED IS COMMON IN BOTH THE YEARS UNDER CONSIDERATION , EXCEPT VARIATION IN FIGURES . ITA NO.3870/MUM./2019 ASSESSMENT YEAR 2013 14 3. THE ONLY GROUND RAISED IN BOTH THE YEARS UNDER CONSIDERATION IS REPRODUCED BELOW: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE DISALLOWANCE UNDER SECTION 80P(2)(D), RIGHTLY MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CLAIM OF INTEREST INCOME FROM THE DEPOSITS IN CO OPERATIVE BANK, IN VIEW OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF TOTAGARS CO OPERATIVE SOCIETY (395 ITR 611). 4. FACTS IN BRIEF : THE ASSESSEE IS A CO OPERATIVE HOUSING SOCIETY AND DURING THE YEAR UNDER CONSIDERATION DECLARED TOTAL INCOME FROM HOUSE PROPERTY, INCOME FROM CAPITAL GAINS AND INCOME FROM OTHER SOURCES. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013 14 ON 24 TH SEPTEMBER 2013, DECLARING TOTAL INCOME AT ` 3 THE SALSETTE CATHOLIC CO OPERATIVE HOUSING LTD. 2,13,29,800 , AFTER CLAIM ING DISALLOWANCE OF ` 2,09,07,670, MADE UNDER SECTI ON 80P OF THE ACT . FOR THE ASSESSMENT YEAR 2014 15, THE RETURN OF INCOME WAS FILED ON 30 TH AUGUST 2014, DECLARING TOTAL INCOME OF ` 4,11,47,400, AFTER CLAIMING DISALLOWING OF ` 2,46,31,070, UNDER SECTION 80P OF THE ACT. 5. THE ASSESSING OFFICER DISALLOWED THE CLAIM FOR BOTH THE YEARS UNDER CONSIDERATION HOLDING THAT THE DEDUCTION IS AVAILABLE FOR INVESTMENT IN OTHER CO OPERATIVE SOCIETIES AND NOT OTHER CO OPERATIVE BANKS. HE WAS OF THE VIEW THAT CO - OPERATIVE SOCIETY AND CO OPERATIVE BANKS HAVE BEEN GIVEN DI FFERENT TREATMENT EVEN UNDER SECTION 194A OF THE ACT WHICH RELATES TO TDS. THE ASSESSING OFFICER VIDE HIS LETTER DATED 2 ND MARCH 2016, SOUGHT EXPLANATION FROM THE ASSESSEE AS TO WHY THE DEDUCTION CLAIMED SHOULD NOT BE DISALLOWED AND ADDED BACK TO THE TOTAL INCOME IN VIEW OF THE PROVISIONS OF SECTION 80P(2)(D) OF THE ACT. IN RESPONSE, THE ASSESSEE SUBMITTED ITS DETAILED REPLY DATED 15 TH MARCH 2016 . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIAL ON RECORD, THE ASSESSING OFFICER REJECTED THE SUBMISSIONS WITH THE FOLLOWING REASONS: 1. THE SAID INTEREST INCOME ON FROM OTHER CO OPERATIVE BANKS IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(D) SINCE THESE BANKS ARE NOT A CO OPERATIVE SOCIETY IN VIEW OF THE DEFINITION CONTAINED IN SECTION 2(19) OF THE ACT AND IN VIEW OF THE PROVISIONS OF SECTION 80P(4) W.E.F. 01.04.2007, WHICH PROVIDES THAT A CO 4 THE SALSETTE CATHOLIC CO OPERATIVE HOUSING LTD. OPERATIVE BANK IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P, AND THUS DIFFERENTIATES THE CO OPERATIVE BANK FROM OTHER CO OPERATIVE SOCIETIES. FURTHER, THAT THE CO OPERATIVE BANKS ARE FUNCTIONING AT PAR WITH COMMERCIAL BANK. 2. THE INTEREST INCOME EARNED FROM CO OPERATIVE BANKS BY THE APPELLANT DOES NOT SATISFY THE CONDITION OF MUTUALITY AND IS ACCORDINGLY TAXABLE AS INCOME FROM OTHER SOURCES. THE A.O. HAS R E LIED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF BANGALORE CLUB V/S CIT, (2013) 29 TAXMANN.COM 29 (SC). THE A.O. HAS ALSO RELIED ON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF TOTGARS CO OPERATIVE SALE SOCIETY LTD. V/S ITO, (2010) 188 TAXMAN 282 TO HOLD THAT THE INTEREST EARNED ON DEPOSITS WITH OTHER BANKS WOULD FALL UNDER THE HEAD INCOME FROM OTHER SOURCES U/S 56 . 6. THE ASSESSING OFFICER HELD THAT THE CO OPERATIVE BANK IS A COMMERCIAL BANK AND DOES NOT FALL UNDER THE PURVIEW OF A CO OPERATIVE SOCIETY REFERRED IN SECTION 80P(2)(D) OF THE ACT AND THE ASSESSEE HAS EARNED INTEREST INCOME FROM CO OPERATIVE BANK AND NOT FROM CO OPERATIVE SOCIETY. ACCORDINGLY, HE DISALLOWED THE CLAIM MADE UNDER SECTION 80P(2)(D) OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE CONTESTED THE ISSUE BEFORE THE FIRST APPELLATE AUTHORITY. 7. THE LEARNED COMMISSIONER (APPEALS) DIREC TED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT RELYING UPON THE DECISIONS OF THE CO ORDINATE BENCH IN ITO V/S CITISCAPE CO. OPERATIVE HOUSING SOCIETY LTD., ITA NO.5435 5436/ MUM./2017, A.Y. 2011 12 AND 2012 13, ORDER DATED 8 TH DECEMBER 2017 AS WELL KALIANDAS UDYOG BHAVAN PREMISES CO. OPERATIVE SOCIETY 5 THE SALSETTE CATHOLIC CO OPERATIVE HOUSING LTD. LTD. V/S ITO, [2018] 94 TAXMANN.COM 15 (MUM.)(TRIB.) AND HELD THAT THE ASSESSEE WOULD BE ENTITLED FOR CLAIM OF DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT IN RESPECT OF INTEREST INCOME EARNED BY THE ASSESSEE ON THE INVESTMENTS HELD WITH THE CO OPERATIVE BANK AND THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE DEDUCTION. THE LEARNED COMMISSIONER (APPEALS) FURTHER NOTICED THAT THE SAID AMOUNT OF ` 2,09,07,669, IS LESS THAN THE GROSS TOTAL INCOME OF ` 2,13,29,796 AND, THEREFORE, THE ASSESSING OFFICER WAS DIRECTED TO ALLOW THE DEDUCTION. THE REVENUE BEING AGGRIEVED BY THE ORDER SO PASSED BY THE LEARNED COMMISSIONER (APPEALS) IS IN APPEAL BEFORE US. 8. THE LEARNED DEPA RTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER SUBMITTED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 80P(2)(D) OF THE ACT WAS RIGHTLY MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF CLAIM OF INTEREST INCOME FROM THE DEPOSITS IN CO OPERATIVE BANKS IN VIEW OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN TOTAGARS CO OPERATIVE SOCIETY REPORTED AS 395 ITR 611 (KAR.) WHEREIN THE HONBLE COURT HAS ALLOWED REVENUES APPEAL BY DECIDING THE ISSUE IN FAVOUR OF THE REVENU E AND AGAINST THE ASSESSEE. HE ACCORDINGLY PRAYED THAT THE ORDER OF THE ASSESSING OFFICER MAY BE UPHELD. 6 THE SALSETTE CATHOLIC CO OPERATIVE HOUSING LTD. 9. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND RELIED UPON THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) AND SUBMITTED THAT THE DEDUCTION CL AIMED UNDER SECTION 80P(2)(D) OF THE ACT IN RESPECT OF INTEREST INCOME EARNED FROM CO OPERATIVE BANK IS NOW SETTLED BY THE CO ORDINATE BENCH DECISIONS OF THE TRIBUNAL. HE SUBMITTED THAT THE ISSUE IS NOW COVERED BY THE BY THE FOLLOWING CO ORDINATE BENCH DEC ISIONS: I) AMIT TATA EMPLOYEES CO OPERATIVE HOUSING SOCIETY LTD. V/S ACIT, ITA NO.292/MUM./2018, A.Y. 2014 15, ORDER DATED 26.07.2019; II) POONAM CHAMBERS PREMISES CO OPERATIVE SOCIETY LTD. V/S ACIT, ITA NO.4463/MUM./2017, A.Y. 2014 15, DATED 23.08.2018; III) MERWANJEE CAMA PARK CO OPERATIVE HOUSING SOCIETY LTD. V/S ITO, ITA NO.6139/MUM./2014, A.Y. 2010 11, ORDER DATED 27.09.2019; AND IV) ITO V/S ETERNITY CO OPERATIVE HOUSING SOCIETY LTD., ITA NO. 6159/MUM./2017, A.Y. 2013 14, ORDER DATED 15.05.2018. 10. COPIES OF TH E AFORESAID DECISIONS ARE PLACED ON RECORD. THE LEA R NED COUNSEL FOR THE ASSESSEE ACCORDINGLY PRAYED THAT BASED ON THE AFORESAID CO ORDINATE BENCH DECISIONS, THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BE UPHELD. 11. CONSIDERED RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE CASE LAWS RELIED UPON BY THE PARTIES. WE FIND THAT THE ISSUE IN RESPECT OF DEDUCTION CLAIMED IN RESPECT OF INTEREST 7 THE SALSETTE CATHOLIC CO OPERATIVE HOUSING LTD. INCOME EARNED FROM CO OPERATIVE BANKS UNDER SECTION 80P(2)(D) OF THE ACT IS SQUARELY COVER ED BY THE DECISIONS RELIED UPON BY THE LEA R NED COUNSEL FOR THE ASSESSEE AS AFORESAID WHEREIN IDENTICAL ISSUE, EXCEPT VARIATION IN FIGURES, HAS BEEN DECIDED BY THE TRIBUNAL IN (I) AMIT TATA EMPLOYEES CO OPERATIVE HOUSING SOCIETY LTD. V/S ACIT, ITA NO.292/MUM./2018, A.Y. 2014 15, ORDER DATED 26.07.2019; (II) POONAM CHAMBERS PREMISES CO OP. S OCIETY LTD. V/S ACIT, ITA NO. 4463/MUM./2017, A.Y. 2014 15, DATED 23.08.2018; (III) M E RWANJEE CAMA PARK CO OPERATIVE HOUSING SOCIETY LTD. V/S ITO, ITA NO.6139/ MUM./2014, A.Y. 2010 11, ORDER DATED 27.09.2019; AND (IV) ITO V/S ETERNITY CO OPERATIVE HOUSING SOCIETY LTD., ITA NO. 6159/MUM./2017, A.Y. 2013 14, ORDER DATED 15.05.2018. CONSISTENT WITH THE VIEW TAKEN IN THE AFORES AID CO ORDINATE BENCH DECISIONS IN WHICH THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN TOTAGARS CO OPERATIVE SOCIETY (SUPRA) , WAS DISTINGUISHED BY THE CO ORDINATE BENCH. THEREFORE, WE HOLD THAT THE ASSESSEE IS A C O OPERATIVE S OCIETY IS ENTITLED FOR CLAIMING DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT IN RESPECT OF THE INTEREST INCOME EARNED FROM EITHER FROM CO OPERATIVE BANK OR FROM CO OPERATIVE SOCIETY WHATSOEVER THAT MAY BE. CONSEQUENTLY, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED BY THE REVENUE. 8 THE SALSETTE CATHOLIC CO OPERATIVE HOUSING LTD. 11. IN THE RESULT, REVENUES APPEAL IS FOR THE A.Y. 2013 14 IS DISMISSED. ITA NO.3871/MUM./2019 REVENUES APPEAL A.Y. 2014 15 12. AS IT APPEARS FROM THE GROUND OF APPEAL RAISED BY THE REVENUE FOR THE ASSESSMENT YEAR 2013 14, IDENTICAL GROUND HAS BEEN RAISED BY THE REVENUE FOR THE ASSESSMENT YEAR 2014 15, EXCEPT VARIATION IN FIGURES. SINCE THE ISSUE OF DEDUCTION CLAIMED UNDER SECTION 80P(2)(D) OF THE ACT IN RESPECT OF INTER EST INCOME EARNED FROM CO OPERATIVE BANK IS COVERED BY THE CO ORDINATE BENCH DECISIONS (SUPRA), CONSISTENT WITH THE VIEW TAKEN THEREIN AS WELL AS THE DECISION TAKEN IN REVENUES APPEAL BEING ITA NO.3870/MUM./2019, FOR A.Y. 2013 14, WE UPHOLD THE ORDER OF T HE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED BY THE REVENUE FOR A.Y. 2014 15 ALSO . 13. IN THE RESULT, REVENUES APPEAL FOR A.Y. 2014 15 IS ALSO DISMISSED. 14. TO SUM UP, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.05.2021 SD/ - MAHAVIR SINGH VICE PRESIDENT SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER MUMBAI, DATED: 13.05.2021 9 THE SALSETTE CATHOLIC CO OPERATIVE HOUSING 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 ASSISTANT REGISTRAR ITAT, MUMBAI