ITO - 17(1)(1), MUMBAI V. M/S. ANNASAHEB PATIL MATHADI KAMGAR SHAKARI PATPEDHI MARYADIT, MUMBAI

ITA 460/MUM/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6204 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 29-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V. KADREKAR
• Keywords: Depreciation; Co-operative Credit Society; Set aside
• Section: 148; 143(1); 80(P); 80P; 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI M. BALAGANESH, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं/ I.T.A. Nos. 460 to 463/Mum/2021 (निर्धारण वर्ा / Assessment Years: 2007-08, 2008-09, 2012-13 & 2009-10) ITO-17(1)(1) Room No.106, 1 st Floor, G- Block, Kautilya Bhavan, Bandra Kurla Complex, Bandra East, Mumbai- 400051. बिधम/ Vs. M/s. Annasaheb Patil Mathadi Kamgar Shakari Patpedhi Maryadit Jivraj Bhanji Shah Market, 3 rd Floor, Yusuf Meherali Road, Masjid Bunder (W), Mumbai- 400009. स्थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAAAB0167G (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) सुनवाई की तारीख / Date of Hearing: 22/11/2021 घोषणा की तारीख /Date of Pronouncement: 17/12/2021 आदेश / O R D E R PER AMARJIT SINGH, JM: The revenue has filed the above mentioned appeals against the different order passed by the Commissioner of Income Tax (Appeals) -28, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Ys. 2007-08, 2008-09, 2012-13 & 2009-10. ITA. NO.460/Mum/2021 2. The revenue has filed the present appeal against the order dated 31.07.2020 passed by the CIT(A)-28, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2007-08. Revenue by: Shri Mehul Jain Assessee by: Shri V. Kadrekar ITA Nos. 460 to 463/Mum/2021 A.Ys.2007-08 to 2012-13 2 3. The revenue has raised the following grounds: - "1. “On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance made by the AO amounting to Rs.4,83,08,534/- i.e. u/s 80P(2)(a)(i) of Rs.3,81,48,225/- and u/s 80P(2)(d) of Rs.1,01,60,309/- of the {Income tax Act, 1961 even though assessee was carrying on banking business.“ 2. “On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the fact that amendment to section 80P(4) inserted w.e.f. 01.04.2007 by Finance Act, 2006 clearly bans all the Co-operative banks other than primary agricultural credit society or a primary co-operative agricultural and rural development banks from claiming exemption under this section.” 3. “On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the ratio of the decision of Hon'ble Supreme Court in the case of Mavilayi Service Cooperative Bank Ltd. vs CIT, Calicut [2021] 123 taxmann.com 161 (SC) with regard to the object of section 80P(4) of the Income tax Act 1961." 4. “The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored.” 5. “The appellant craves leave to amend or to alter any ground or add a new ground, which may be necessary.” 4. The brief facts of the case are that the assessee filed its return of income on 30.09.2008 declaring total income to the tune of Rs. Nil along with Audit Report u/s 44AB of the I. T. Act, 1961. The return was ITA Nos. 460 to 463/Mum/2021 A.Ys.2007-08 to 2012-13 3 processed u/s 143(1) of the Act. The case of the assessee was reopened u/s 147 of the Act. Notice u/s 148 of the Act was also issued and served upon the assessee. On verification, it was found that the assessee has taken the whopping Rs.26,99,54,271/- as loan from Mumbai District Central Co-op Bank. The assessee received the deposits from some members and granted loan to other member on interest. As regards nature of business, the auditors in their Audit Report in F. No.3CD have stated as follows against column No.-8(a) thereof “Co-operative Credit Society engaged in providing Credit Facilities to members” The assessee‟s Balance-Sheet as on 31-03- 2007 shows „Reserves & Other Funds‟ on liability side with balance of Rs.31,44,42,057/-. This mainly represent profits from the business and further, it consists of provisions under other heads. The assessee‟s borrowing from the Mumbai District Central Co-operative Banks as on 31.03.2007 stands at Rs.26,99,54,271/- which is by and standard, a large amount. The assessee was paying the interest to the bank @ 11% which varies from 6% to 11% in cases of members. But as against this, the interest charged by the assessee on the loans granted, varies from 12% to 14%. The assessee received the interest in sum of Rs.93,72,809/- for the A.Y.2006- 07. The assessee debited an amount of Rs.25,20,598/- to its P & L Account for A.Y.2006-07 under the head, „Provision for bad and doubtful debts. Further, it has created a provision of Rs.25,00,000/- towards doubtful interest. The assessee also earmarked an amount of Rs,50,00,000/- out of its profits of F.Y.2006-07 as provisions for declaring dividend to its share- holder members. The assessee also earned the income in sum of Rs.1,48,800/- by way of miscellaneous income. The assessee paid the interest on borrowed capital to the tune of Rs.7,50,52,102/-. The assessee ITA Nos. 460 to 463/Mum/2021 A.Ys.2007-08 to 2012-13 4 also claimed the gratuity in sum of Rs.8,99,354/- u/s 40A(7) and Depreciation @ 51,25,019/- u/s 32(1)(i). The assessee raised the claim u/s 80P(2)(i)(a) to the tune of Rs.4,83,08,534/- which was disallowed and added to the income of the assessee and the total income of the assessee was assessed to the tune of Rs.4,83,08,534/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who allowed the claim of the assessee but the revenue was not satisfied, therefore, the revenue has filed the present appeal before us. ISSUE NOS. 1 TO 4 5. We have heard the argument advanced by the Ld. Represented of the parties and perused the record. Before going further, we deem it necessary to advert the finding of the CIT(A) on these issues: - “4.2 I have carefully gone through the submission and argument of the AR of the Appellant. I have also gone through the findings made by the AO in the assessment order. The case laws cited by the Appellant as well as the AO in his assessment order have been duly considered. It is seen that jurisdictional High Court in Appellant’s own case for A.Y.2010-11 has held that it has not breached section 80P(2)(a) and (d) of the Act. For A.Y.2010-2011 the addition made by the AO u/s section 80P(2)(a) and (d) of the Act was deleted by CIT(A) and the decision of CIT(A) has been confirmed by ITAT. ITAT has categorically held | that the assesse co-operative society does not fall within the restrictions placed under subsection (4) of 80P of the Act. From material available on record it is evident that assesse is a co- operative society and does not fall within the ambit of co-operative ITA Nos. 460 to 463/Mum/2021 A.Ys.2007-08 to 2012-13 5 bank. Therefore, considering the order of jurisdictional High Court in assessee’s own case the addition made by the AQ denying the deduction under section 80(P) is hereby deleted.” 6. On appraisal of the above mentioned finding, we noticed that the CIT(A) has allowed the claim of the assessee on the basis of the decision of Hon‟ble ITAT in the assessee‟s own case for the A.Y.2010-11 bearing ITA. No.2515/Mum/2014 dated 20.05.2016. The said order has been confirmed by Jurisdictional High Court in appeal no. 933 of 2017 dated 14.10.2019. There is nothing on record to which it can be assumed that the order has been changed or varied. The facts are also not distinguishable at this stage. Accordingly, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfered with at this appellate stage. Accordingly, all these issues are decided in favour of the assessee against the revenue. ISSUE NO.5 7. Issue no.5 is pre-mature in nature which nowhere required for adjudication. In the result, the appeal filed by the revenue is hereby ordered to be dismissed. ITA. No.461 to 463/Mum/2021 8. The facts of the present case are quite similar to the facts of the case as narrated above while deciding in ITA. No.460/Mum/2021, therefore, there is no need to repeat the same. However, the figure is different. The ITA Nos. 460 to 463/Mum/2021 A.Ys.2007-08 to 2012-13 6 finding given above while deciding the ITA. No.460/Mum/2021 is quite applicable to the facts of the present case also as mutatis and mutandis. Accordingly, we dismiss the appeals of the revenue bearing ITA. No.461 to 463/Mum/2021 also. 9. In the result, the appeals filed by the revenue are hereby ordered to be dismissed. Order pronounced in the open court on 17/12/2021 Sd/- Sd/- (M. BALAGANESH) (AMARJIT SINGH) लेखध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER मुंबई Mumbai; ददनांक Dated : 17/12/2021 Vijay Pal Singh (Sr. PS) आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. दवभागीय प्रदतदनदध, आयकर अपीलीय अदधकरण, मुंबई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधिक िंजीकधर /(Dy./Asstt. Registrar) आिकर अिीलीि अनर्करण, मुंबई / ITAT, Mumbai