THE UNIVERSITY OF MUMBAI EMPLOYEES CO.OP. CREDIT SOCIETY LTD., MUMBAI V. ITO ,WARD 17 (3)(5), MUMBAI

ITA 450/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8376 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 30-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANT JAHAVERI
• Keywords: Co-operative Credit Society
• Section: 143(3); 80P; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F, BENCH MUM BAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.450/MUM/2019 ( ASSESSMENT YEAR: 2014-15 ) THE UNIVERSITY OF MUMBAI EMPLOYEES CO-OP CREDIT SOCIETY LTD. ROOM NO.236, UNIVERSITY BUILDING, FORT MUMBAI-400 032 VS. ITO,WARD-17(3)(5) ROOM NO.137, 1 ST FLOOR AAYKAR BHAWAN M.K.ROAD MUMBAI-400 020 PAN/GIR NO. A AAAT4466C APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI BHUPENDRA SHAH, AR REVENUE BY SHRI JAYANT JAHAVERI, CIT-DR DATE OF HEARING 16/03/2020 DATE OF PRONOUNCEME NT 20/05 /2020 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)28, MUMBAI, DATED 12/12/2018 AND IT PERTAINS TO ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), MUMBAI - 28 (T HE CIT(A) - MUMBAI 28 ERRED IN NOT ALLOWING DEDUCTION UNDER SEC TION 80P (2) (A) (I) OF THE ACT IN RESPECT OF THE INTEREST INCOME EARNED BY THE APPELLANT ON THE DEPOSITS KEPT BY IT WITH CO-OPERATIVE BANKS AND OTH ER BANKS. 2. THE CIT(A) - MUMBAI 28 ERRED IN ALLOWING DEDUCT ION UNDER SECTION 80P (2) (D), AS THE INCOME FROM OTHER SOURCES OF TH E APPELLANT. IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCUMSTANCES O F THE CASE, AND IN LAW, NO SUCH DISALLOWANCE WAS CALLED FOR. ITA NO.450/MUM/2019 THE UNIVERSITY OF MUMBAI EMPLOYEES CO-OP CREDIT SOC IETY LTD. 2 3 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR MODIFY ALL OR ANY THE ABOVE GROUNDS AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CO- OPERATIVE CREDIT SOCIETY, REGISTERED UNDER THE MAHA RASHTRA CO- OPERATIVE SOCIETY ACT, 1960. THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR AY 2014-15 ON 15/09/2014, DECLARING TOTA L INCOME AT RS. NIL AFTER CLAIMING DEDUCTION U/S 80P(2)(1) OF THE I.T. ACT, 1961. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT H AS BEEN COMPLETED U/S 143(3) OF THE I.T.ACT, 1961 ON 23/12/ 2016, DETERMINING THE TOTAL INCOME AT RS.18,61,390/-, WHE RE THE LD. AO HAS ASSESSED INTEREST ON FD AND DIVIDEND RECEIVED FROM OTHER CO- OPERATIVE SOCIETIES/CO-OPERATIVE BANKS THE HEAD INC OME FROM OTHER SOURCES. WHILE DOING SO, THE LD. AO HAS TAKEN SUPPO RT FROM THE DECISION OF HONBLE SUPREME COURT, IN THE CASE OF T OTGARS CO- OPERATIVE SALE SOCIETY VS ITO 2010 188 TAXMANN.282, WHERE IT HAS BEEN HELD THAT INTEREST EARNED ON DEPOSITS WITH OTH ER CO-OPERATIVE BANKS WOULD FALL UNDER THE HEAD INCOME FROM OTHER S OURCES U/S 56 OF THE I.T.ACT, 1961AND NOT U/S 28 OF THE I.T.ACT, 1961. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A). BEFORE THE LD.CIT(A ), THE ASSESSEE HAS REITERATED ITS SUBMISSIONS MADE BEFORE THE LD. AO AND ARGUED THAT INTEREST AND DIVIDEND RECEIVED FROM OTHER CO-O PERATIVE SOCIETIES/BANKS IS ENTITLED FOR DEDUCTIONS U/S 80P( 1)(A)/80P(2)(D) OF THE I.T.ACT, 1961. IN THIS REGARD, HE RELIED UPON T HE DECISION OF HONBLE BOMBAY HIGH COURT. IN THE CASE OF QUEPEM U RBAN CREDIT SOCIETY LTD. VS ACIT 2015 377 ITR 272. THE LD.CIT( A) AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE AN D ALSO, BY RELIED ITA NO.450/MUM/2019 THE UNIVERSITY OF MUMBAI EMPLOYEES CO-OP CREDIT SOC IETY LTD. 3 UPON VARIOUS JUDICIAL PRECEDENTS, INCLUDING THE DEC ISION OF HONBLE BOMBAY HIGH COURT, IN THE CASE OF QUEPEM URBAN CRED IT SOCIETY LTD. VS ACIT (SUPRA), HAS PARTLY ALLOWED, APPEAL FI LED BY THE ASSESSE, WHERE THE LD. CIT(A) HAS HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(D) OF THE I.T.ACT, 1961 ONLY W ITH RESPECT TO INVESTMENTS HELD WITH A CO-OPERATIVE BANK AND ACCOR DINGLY, DIRECTED THE LD. AO TO ENSURE THAT NO DEDUCTION U/S 80P(2)(D ) OF THE I.T.ACT, 1961 IS ALLOWED ON INTEREST INCOME EARNED FROM A S CHEDULED BANK. AGGRIEVED BY THE LD.CIT(A) ORDER, THE ASSESSEE IS I N APPEAL BEFORE US. 5. THE LD. AR FOR THE ASSESSEE, AT THE TIME OF HEAR ING SUBMITTED THAT THE ISSUE INVOLVED IN PRESENT APPEAL FILED BY THE ASSESSEE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF ITAT, MUMBAI IN THE CASE OF MAHAPALIKA KSHETRA MADHYAMIK SHIKSHAK SAHAKARI PATSANSTHA MARYADIT VS ITO (2019) 112 TAX XMAN.COM 165, WHERE THE TRIBUNAL HELD THAT A ASSESSEE COOPER ATIVE CREDIT SOCIETY HAD NOT UNDERTAKEN ANY OF BANKING BUSINESS ACTIVITIES AND WAS PROVIDING FINANCIAL ASSISTANCE/CREDIT TO ITS ME MBERS, ONLY AND NOT TO GENERAL PUBLIC, IT WOULD NOT BE HIT BY PROVI SIONS OF SECTION 80P(4) OF THE I.T.ACT, 1961 AND THUS WAS ENTITLED F OR DEDUCTION U/S 80P(2)(A)(I) OF THE I.T.ACT, 1961. 6. THE LD. DR, ON THE OTHER HAND SUPPORTING ORDER O F THE LD.CIT(A) SUBMITTED THAT THE LD.CIT(A) HAS BROUGHT OUT CLEAR FACTS TO THE EFFECT THAT THE ASSESSEE IS ENTITLED FOR DEDUCT IONS TOWARDS INTEREST EARNED FROM OTHER CO-OPERATIVE BANKS U/S 8 0P(2)(D) AND HENCE, THERE IS NO MERIT IN THE ARGUMENTS OF THE LD . AR OF THE ITA NO.450/MUM/2019 THE UNIVERSITY OF MUMBAI EMPLOYEES CO-OP CREDIT SOC IETY LTD. 4 ASSESSEE THAT THE ASSESSEE IS ENTITLED FOR DEDUCTIO N U/S 80P(2)(A)(I) OF THE I.T.ACT, 1961. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. WE FIND THAT THE ISSUE INVOLVED IN PRESENT APPEAL FILED BY THE ASSESSEE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF HONBLE BOMBAY HIGH COURT, IN THE CASE OF M/S. QUEP EM URBAN CREDIT SOCIETY LTD. VS ACIT (SUPRA), WHERE UNDER ID ENTICAL SET OF FACTS, THE HONBLE HIGH COURT HELD THAT INTEREST AN D DIVIDEND EARNED FROM INVESTMENTS WITH OTHER COOPERATIVE BANKS/SOCIE TIES IS ENTITLED FOR DEDUCTIONS U/S 80P(2)(A)(I) OF THE I.T.ACT, 196 1. WE, FURTHER NOTED THAT THE ITAT MUMBAI D BENCH, IN THE CASE OF MAHA PALIKA KSHETRA MADHYAMIK SHIKSHAK SAHAKARI PATSANSTHA MARYADIT VS ITO (SUPRA) HAD CONSIDERED AN IDENTICAL ISSUE AND HELD THAT WHE RE ASSESSEE, A CO-OPERATIVE CREDIT SOCIETY HAD NOT UNDERTAKEN ANY OF BANKING BUSINESS AND WAS PROVIDING CREDIT FACILITIES TO ITS MEMBERS ONLY AND NOT TO GENERAL PUBLIC, IT WOULD NOT HIT BY PROVISIO NS OF SECTION 80P(4) OF THE I.T.ACT, 1961 AND THUS, ENTITLED FOR DEDUCTI ON U/S 80P(2)(A)(I) OF THE I.T.ACT, 1961. IN THIS CASE, ON PERUSAL OF F ACTS AVAILABLE ON RECORD, THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE IS NOT CARRIED OUT ANY BANKING BUSINESS TO PUBLIC AT LARGE, BUT WAS ENGAGED IN THE PROVIDING CREDIT FACILITIES TO ITS M EMBERS ONLY. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT INCOM E EARNED BY THE ASSESSEE, INCLUDING INTEREST AND DIVIDEND RECEIVED FROM INVESTMENTS WITH OTHER CO-OPERATIVE SOCIETY/CO-OPERATIVE BANKS IS ENTITLED FOR DEDUCTION U/S 80P(2)(A)(I) OF THE I.T.ACT, 1961. HE NCE, WE DIRECT THE LD. AO TO ALLOW THE BENEFIT OF DEDUCTION U/S 80P(2) (A)(I) OF THE ITA NO.450/MUM/2019 THE UNIVERSITY OF MUMBAI EMPLOYEES CO-OP CREDIT SOC IETY LTD. 5 I.T.ACT, 1961, IN RESPECT OF INTEREST AND DIVIDEND EARNED FROM INVESTMENTS WITH OTHER CO-OPERATIVE BANKS/SOCIETIES . 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20/05/ 2020 SD/- (RAM LAL NEGI) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 20/05/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//