ITO 20(2)(1), MUMBAI V. MUMBAI AGNISHAMAN DAL SAHAKARI PATPEDHI LTD., MUMBAI

ITA 4982/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9937 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 04-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CULLA MUMBAI PANAAAAMN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH F, MU MBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4982/MUM/2016 (ASSESSMENT YEAR- 2012-13) ITO-20(2)(1) ROOM NO. 216, 2 ND FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400012. VS. M/S MUMBAI AGNISHAMAN DAL SAHAKARI PATPEDHI LTD., B.J. ROAD, BYCULLA, MUMBAI-400008 PAN:AAAAM2960N (APPELLANT) (RESPONDENT) REVENUE BY : MS. POOJA SWAROOP (DR) ASSESSEE BY : SHRI ROHIT KASAT (AR) DATE OF HEARING : 15.03.2018 DATE OF PRONOUNCEMENT : 15.03.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY REVENUE UNDER SECTION 253 OF INCOME TAX ACT IS DIRECTED AGAINST THE COMMON ORDER OF LD. COMMISSIONER OF INC OME-TAX (APPEALS)- 32, MUMBAI, [FOR SHORT THE LD. CIT(A)] DATED 24.04. 2016 FOR ASSESSMENT YEAR 2012-2013. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80P TO THE ASS ESSEE EVEN THOUGH ASSESSEE CARRIES ON THE BANKING BUSINESS AND OTHER BUSINESS IN THE NAME OF A CO- OPERATIVE CREDIT SOCIETY? 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80P(2)(A)(I) W ITHOUT CONSIDERING INSERTED SECTION 80P(4) AND SUB-CLAUSE (VIIA) TO SECTION 2(2 4) VIDE FINANCE ACT, 2006 W.E.F. 01.04.2007? 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW, THE LD. CIT(A) HAS ERRED IN FINDING THE DECISION OF THE SUPREME CO URT IN THE CASE OF M/S. TOTGAR CO.OP SALES SOCIETY LTD. (322 ITR 285) WHERE IN INTEREST RECEIVED BY A CO-OPERATIVE SOCIETY FROM INVESTMENT OF SURPLUS FUN DS IS ASSESSABLE AS 'INCOME FROM OTHER SOURCES' AND THUS NOT ELIGIBLE F OR DEDUCTION U/S. 80P OF THE I.T ACT, 1961.' ITA NO. 4982/MUM/2016 - M/S MUMBAI AGNISHAMAN DAL SAHAKARI PATPEDHI LTD. 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO-OPERATIVE CREDIT SOCIETY REGISTERED UNDER THE MAHARASHTRA CO-OPERATIVE SOCIE TIES ACT, 1960. THE ASSESSEES SOCIETY IS PROVIDING LOAN FACILITIES TO ITS MEMBERS, FILED ITS RETURN OF INCOME ASSESSMENT YEAR 2012-13 ON 17.08.2012 DE CLARING TOTAL INCOME OF RS. 51,757/-. THE ASSESSMENT WAS COMPLETED ON 31 .03.2015 UNDER SECTION 143(3) OF THE ACT. THE ASSESSING OFFICER WH ILE PASSING THE ASSESSMENT ORDER DENIED THE DEDUCTION UNDER SECTION 80P(2)(A)(I) FOR RS. 9630448/- AND TREATED THE SAME AS INCOME OF THE ASSESSEE. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE WAS ALLOWED DED UCTION UNDER SECTION 80P(2)(A)(I). THUS, AGGRIEVED BY THE ORDER OF LD. C IT(A), THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) FOR THE REVENUE AND LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSES SEE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. DR FOR THE RE VENUE SUBMITS THAT THE ASSESSING OFFICER HAS NOT MADE COMPLETE ENQUIRY REG ARDING THE NATURES OF CREDIT FACILITIES AND ACTIVITIES CARRIED OUT BY THE ASSESSEES SOCIETY. THE LD. DR FOR THE REVENUE PRAYED TO RESTORE THE MATTER BAC K TO THE FILE OF ASSESSING OFFICER FOR PROPER ENQUIRIES IN SUPPORT O F HIS SUBMISSION. THE LD. DR FOR THE REVENUE RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN CASE OF CIT VS JANSAMPARK ADVERTISING & MA RKETING (P.) LTD. [2015] 56 TAXMANN.COM 286 (DELHI). ON THE OTHER HAN D, THE LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF LD. CIT(A). THE LD. AR OF THE ASSESSEE ITA NO. 4982/MUM/2016 - M/S MUMBAI AGNISHAMAN DAL SAHAKARI PATPEDHI LTD. 3 ARGUED THAT ASSESSEE IS A CO-OPERATIVE SOCIETY AND NOT A CO-OPERATIVE BANK. THE ASSESSEE IS NOT HAVING ANY LICENCE UNDER THE BA NKING REGULATION ACT, 1949 TO CARRY OUT BANKING BUSINESS AND THE ASSESSEE CANNOT BE CLASSIFIED AS CO-OPERATIVE BANK. THE LD. AR OF THE ASSESSEE FURTH ER SUBMITS THAT THE LD. CIT(A) GRANTED THE RELIEF TO THE ASSESSEE BY FOLLOW ING THE DECISION OF JURISDICTIONAL HIGH COURT IN QUEPEM URBAN CO-OPERAT IVE CREDIT SOCIETY LTD[2015] 58 TAXMANN.COM 113(BOM). THE LD AR FOR TH E ASSESSEE FURTHER RELIED AND THE DECISION OF SINGLE MEMBER BENCH OF M UMBAI TRIBUNAL IN CASE OF ITO VS. M/S ASHIRWAD CO-OP. CREDIT SOCIETY LTD. IN ITA NO. 5069/MUM/2017. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THERE IS N O DISPUTE THAT ASSESSEE IS A CO-OPERATIVE SOCIETY. THE ASSESSEE IS REGISTERED UNDER THE MAHARASHTRA STATE CO-OPERATIVE SOCIETIES ACT. THE ASSESSEE IS P ROVIDING CREDIT FACILITIES TO ITS MEMBERS ONLY. THE ASSESSING OFFICER AFTER CO MPARING THE PROVISION OF BANKING REGULATION ACT AS WELL AS MAHARASHTRA ST ATE CO-OPERATIVE SOCIETIES ACT, TOOK THE VIEW THAT THE ASSESSEES SO CIETY SQUARELY FALL WITHIN THE DEFINITION OF CO-OPERATIVE BANK AND THEREFORE, HIT BY THE PROVISIONS OF SECTION 80P(4) OF THE ACT. THEREFORE, THE ASSESSING OFFICER DENIED THE DEDUCTION UNDER SECTION 80P(2)(A)(I) AND TREATED TH E DIVIDEND RECEIVED FROM MUMBAI DISTRICT CENTRAL CO-OPERATIVE BANK AS INCOME FROM OTHER SOURCES. DURING THE FIRST APPELLATE STAGE THE LD. C IT(A) OBSERVED THAT THE ITA NO. 4982/MUM/2016 - M/S MUMBAI AGNISHAMAN DAL SAHAKARI PATPEDHI LTD. 4 ASSESSING OFFICER HAS NOT EXAMINED THE CORE INGREDI ENTS OF BANKING BUSINESS. MERELY, THE ASSESSEE HAVE BEEN ACCEPTING THE DEPOSIT AND ADVANCE/LOAN TO ITS MEMBER CANNOT BE HELD AS ENGAGE D IN THE BUSINESS OF BANKING. THE ASSESSEES SOCIETY HAS NO LICENCE UNDE R THE BANKING REGULATION ACT. THE LD. CIT(A) AFTER FOLLOWING THE DECISION OF NAGPUR AND PANAJI BENCH IN CASE OF ACIT VS. BULDANA URBAN C-OP . CREDIT SOCIETY LTD. (32 TAXMAN 69) AND DCIT VS. JAYALAXMI MAHILA VIVIDO DESHAGALA SOUHARDA SAHAKARI LTD. (23 TAXMAN 313) AND THE HON' BLE JURISDICTIONAL HIGH COURT IN QUEPEM URBAN CO-OPERATIVE CREDIT SOCI ETY LTD. (SUPRA) HELD THAT THE ASSESSEE CANNOT BE TREATED AS A CO-OP ERATIVE BANK AND THUS, THE DEDUCTION CANNOT BE DENIED. WE HAVE NOTED THAT SIMILAR VIEW HAS BEEN TAKEN BY SINGLE MEMBER BENCH OF THIS TRIBUNAL IN M/ S ASHIRWAD CO-OP. CREDIT SOCIETY LTD. (SUPRA) (AUTHORED BY LD. ACCOUN TANT MEMBER). WE HAVE NOTED THAT THE LD. CIT(A) HAS FOLLOWED THE DEC ISION OF JURISDICTIONAL HIGH COURT WHILE GRANTING RELIEF TO THE ASSESSEE. N O CONTRARY DECISION IS BROUGHT TO OUR NOTICE TO TAKE THE DIFFERENT VIEW. T HE DECISION RELIED BY LD DR IS NOT HELPFUL TO THE REVENUE AS THE SOLE GROUND OF APPEAL RAISED BY THE REVENUE IS COVERED BY THE DECISION OF HONBLE BOMB AY HIGH COURT IN QUEPEM URBAN CO-OPERATIVE CREDIT SOCIETY LTD (SUPRA ). IN THE DECISION OF JANSAMPARK ADVERTISING (P) LTD, THE REVENUE AUTHORI TIES HAVE NOT EXAMINED THE FACT PROPERLY AND THE ADDITIONS WERE DELETED, H ERE THE SOLE ISSUES IS WHETHER THE ASSESSEE-SOCIETY IS CO-OPERATIVE SOCIET Y OR CO-OPERATIVE BANK, ITA NO. 4982/MUM/2016 - M/S MUMBAI AGNISHAMAN DAL SAHAKARI PATPEDHI LTD. 5 WHICH HAS BEEN EXAMINED BY LD CIT(A). THUS, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASSED BY LD. CIT(A). 5. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH DAY OF MARCH 2018. SD/- SD/- ( SHAMIM YAHYA ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 15/03/2018 S.K.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 C