M/s.Co-operative Insurance Society Ltd, Trivandrum V. The iTO, Wd-2(1), Trivandrum

ITA 445/COCH/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5746 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-09-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 03-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A.S.BINDHU
• Section: 143(3); 201

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M I .T . A. NO S . 444 & 445/ CO CH/ 201 9 & S.P. NOS. 45 & 46/COCH/2019 ASSESSMENT YEAR : 201 4 - 15 & 2015 - 16 CO - OP ERATIVE INSURANCE SOCIETY LTD., T.C. 28/2405, KSCB BUILDING, OVER BRIDGE JUNCTION, TRIVANDRUM - 695 001. [PAN: AA A A C 3420F] VS. THE INCOME - TAX OFFICER, WARD - 2(1), TRIVANDRUM. ( ASSESSEE - APPELLANT) ( REV E NUE - RESPONDENT) ASSESSEE BY S HRI R. KRISHNAN, CA REVENUE BY SMT. A.S. BINDHU, SR. DR D ATE OF HEARING 2 6 /09/2019 DATE OF PRONOUNCEMENT 01/10/2 019 O R D E R PER GEORGE GEORGE K. JM : TH ESE APPEAL S AT THE INSTANCE OF THE ASSESSEE ARE DIRECTED A GAINST THE TWO OR DER S OF THE CIT(A), TRIVANDRUM BOTH DATED 22/03/2019. THE RELEVANT ASSESSMENT YEAR S ARE 2014 - 15 AND 2015 - 16. THE ASSESSEE HAS ALSO FILED STAY PETITIONS SEEKING STAY OF RECOVERY OF OUTSTANDING ARREARS FOR THE ASSESSMENT YEARS 2014 - 15 AND 2015 - 16. I.T.A. NO S . 444 & 445/ /COCH/201 9 & S.P. NOS. 45&46/ C OCH/2019 2 2. COMMON ISSUE IS RAISED IN THESE APPEALS , HENCE THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLID ATED ORDER. IDENTICAL GROUNDS WERE RAISED IN THESE APPEALS . THEY READ AS FOLLOWS: 1) THE LEARNED OFFICERS BELOW ERRED IN DENYING DEDUCTION U/S. 80P(2)(D) OF THE ACT. 2) THE LEARNED OFFICERS OUGHT TO HAVE NOTED THAT THE APPELLANT WAS REGISTERED AS A CO - O PERATIVE SOCIETY AND THEREFORE THE PROVISIONS OF SECTION 80P(2) APPLIED IN THE CASE OF THE APPELLANT. 3) THE LEARNED OFFICERS BELOW OUGHT TO HAVE APPRECIATED THAT THE INCOME OF THE APPELLANT FROM INVESTMENTS IN BANKS AND OTHER CO - OPERATIVE SOCIETIES WERE ASSESSABLE UNDER THE HEAD BUSINESS 4) THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) OUGHT TO HAVE NOTICED THAT THE ASSESSING OFFICER HAD NOT EXAMINED THE CASE OF THE APPELLANT IN DETAIL AND HAD MERELY REFUSED DEDUCTION U/S. 80P(2)(D) WHICH IS BAD IN L AW. 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A CO - OPERATIVE SOCIETY . . FOR THE ASSESSMENT YEAR S 2014 - 15 AND 2015 - 16 , THE ASSESSEE FILED ITS RETURNS OF INCOME ON 29/03/2016 AND 10/03/2017 RESPECTRIVELY. THE ASSESSEE HAD CL AIMED DEDUCTION U/S. 80P(2)(D) OF THE I.T. ACT FOR ASSESSMENT YEARS 2014 - 15 AND 2015 - 16 AMOUNTING TO RS. 55,77,859/ - AND RS.55,45,288/ - RESPECTIVELY. THE ASSESSING OFFICER COMPLETED THE ASSESSMENTS UNDER SECTION 143(3) OF THE I.T. ACT FOR THE ASSESSMENT Y EARS 2014 - 15 AND 2015 - 16 VIDE ORDERS DATED 22/12/2016 AND 30/12/2017 BY DISALLOWING THE CLAIM OF DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT . T HE REASON FOR DISALLOWING THE DEDUCTION WAS THAT INTEREST INCOME WHICH WAS RECEIVED BY THE I.T.A. NO S . 444 & 445/ /COCH/201 9 & S.P. NOS. 45&46/ C OCH/2019 3 ASSESSEE WAS NOT FROM INVESTMENTS MADE WITH CO - OPERATIVE SOCIETIES BUT WITH CO - OPERATIVE BANKS. 4. AGGRIEVED BY THE ORDERS OF ASSESSMENT FOR THE ASSESSMENT YEARS 2014 - 15 AND 2015 - 16, THE ASSESSEE HAS PREFERRED APPEALS TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER BY RELYING ON THE ORDER OF THE TRIBUNAL IN THE CASE OF THE KERALA STATE HOMEOPATHIC CO - OPERATIVE PHARMACY LTD. IN ITA 283,284/COCH/2018 ORDER DATED 15/10/2018. 5. AGGRIEVED BY THE ORDERS PASSED BY THE CIT(A) FOR T HE ASSESSMENT YEARS 2014 - 15 AND 2015 - 16, THE ASSESSEE HAS FILED THE PRESENT APPEALS BEFORE THE TRIBUNAL. THE LD. AR RELIED ON THE GROUNDS. THE LD. DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE INCOME TAX AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMI SSIONS AND PERUSED THE RECORD. THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF THE KERALA STATE HOMEOPATHIC CO - OPERATIVE PHARMACY LTD. CITED SUPRA HAD HELD THAT DEDUCTION U/S. 80P(2)(D) OF THE I.T. ACT IS TO BE GRANTED ONLY WITH REGARD TO INTEREST/DIVIDEN D INCOME EARNED FROM INVESTMENTS WITH CO - OPERATIVE SOCIETIES. THE ASSESSEE EVEN BEFORE US DID NOT PROVE THAT INCOME ON WHICH DEDUCTION IS CLAIMED U/S. 80P(2)(D) OF THE I.T. ACT IS OUT OF INVESTMENT WITH CO - OPERATIVE SOCIETIES. THEREFORE IN THE LIGHT OF TH E CO - ORDINATE BENCH ORDER OF THE TRIBUNAL IN THE CASE OF THE KERALA STATE I.T.A. NO S . 444 & 445/ /COCH/201 9 & S.P. NOS. 45&46/ C OCH/2019 4 HOMEOPATHIC CO - OPERATIVE PHARMACY LTD. ( SUPRA ) , WE HOLD THAT THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION U/S. 80P(2)(D) OF THE I.T. ACT . 7. HOWEVER , THE ASSESSEE HAD RAISED TH E GROUND THAT IT IS ENTITLED FOR DEDUCTION U/S. 80P(2)( A ) (I) OF THE I.T. ACT . THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S. TRIVANDRUM DISTRICT ELECTRICITY BOARD EMPLOYEES CO - OPERATIVE SOCIETY IN ITA NO. 266/COCH/2019 (ORDER DATED 01/08/2 019 ) HAD HELD THAT WHEN A CO - OPERATIVE SOCIETY RECEIVED INTEREST FROM INVESTMENT I N THE COURSE OF ITS BUSINESS OF BANKING/PROVIDING CREDIT FACILITIES TO ITS MEMBERS, T HE SAME SHALL BE ASSESSED AS INCOME FROM BUSINESS AND HENCE ENTITLED FOR DEDUCTION U/S. 8 0P(2)(A)(I) OF THE I.T. ACT. THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S. TRIVANDRUM DISTRICT ELECTRICITY BOARD EMPLOYEES CO - OPERATIVE SOCIETY (S UPRA ) HAD FOLLOWED THE PRINCIPLES LAID DOWN BY THE FOLLOWING JUDICIAL PRONOUNCEMENTS: (I) C IT VS. KARNATAKA STATE CO - OPERATIVE BANK (251 ITR 194) (SC) (II) VAVERU CO - OPERATIVE RURAL BANK LTD. VS. CIT (2017) 396 ITR 371 (THE TELUNGANA AND ANDHRA PRADESH HIGH COURT. (III) MUTTOM SERVICE CO - OPERATIVE BANK LTD. (ITA NO. 106/COCH/2016) (IV) THE MANG ALAM SERVICE CO - OPERATIVE BANK LTD. VS. ITO (ITA NO. 495/COCH/2017 ORDER DATED 17/10/2017) 8. IN THE LIGHT OF THE ABOVE ORDER OF THE COCHIN BENCH OF TRIBUNAL IN THE CASE OF ITO VS. M/S. TRIVANDRUM DISTRICT ELECTRICITY BOARD EMPLOYEES CO - OPERATIVE I.T.A. NO S . 444 & 445/ /COCH/201 9 & S.P. NOS. 45&46/ C OCH/2019 5 SOC IETY (S UPRA ) , WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE WHETHER THE ASSESSEE IS ENTITLED FOR CLAIM OF DEDUCTION U/S. 80P(2)(I)(A) OF THE ACT WITH REGARD TO INTEREST INCOME IT HAD RECEIVED FROM CO - OPERATIVE BANK . THE ASSESSING O FFICER SHALL FOLLOW THE DICTUM LAID DOWN BY THE ORDER OF THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S. TRIVANDRUM DISTRICT ELECTRICITY BOARD EMPLOYEES CO - OPERATIVE SOCIETY ( SUPRA ) . IT IS ORDERED ACCORDINGLY. HENCE T HE APPEALS OF THE ASSESSE E ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9. SINCE WE HAVE DISPOSED OF THE ASSESSEES APPEALS, THE STAY PETITIONS FILED BY THE ASSESSEE IN S.P. NOS. 45&46/COCH/2019 HAVE BECOME INFRUCTUOUS AND ARE DISMISSED AS S UCH. 1 0. IN THE RESULT, THE APPE ALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE STAY PETITIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01 ST OCTOBER, 2019 SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCO UNTANT MEMBER JUDICIAL MEMBER PLACE: KOCHI DATED: 01 ST OCTOBER,2019 GJ COPY TO: 1 . CO - OPERATIVE INSURANCE SOCIETY LTD., T.C. 28/2405, KSCB BUILDING, OVER BRIDGE JUNCTION, TRIVANDRUM - 695 001. 2. THE INCOME TAX OFFIC ER, WARD - 2(1), TRIVANDRUM . I.T.A. NO S . 444 & 445/ /COCH/201 9 & S.P. NOS. 45&46/ C OCH/2019 6 3. THE COMMISSIONER OF INCOME - TAX(APPEALS), TRIVANDRUM. 4. THE PR. COMMISSIONER OF INCOME - TAX, TRIVANDRUM. 5 . D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN