ITO 15(1)(2), MUMBAI V. J.J. HOSPITAL AND GRANT MEDICAL COLLEGE EMPLOYEES CO OP CREDIT SOCIETY LTD, MUMBAI

ITA 5006/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88309 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Department
• Bench Allotted: J
• Next Hearing Date: 26-11-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 02-07-2013
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.5006/M/2013 ( / ASSESSMENT YEAR: 2010 - 2011 ) ITO, WARD 15(1)(2), MUMBAI. / VS. M/S. J.J HOSPITAL AND GRANT MEDICAL COLLEGE EMPLOYEES COOPERATIVE CREDIT SOCIETY LTD., R.NO.311, J.J. HOSPITAL MAIN BUILDING, MUMBAI 400 008. ./ PAN : AAAAJ2088E ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PREMANAND J, DR / RESPONDENT BY : M.K. KULKARNI / DATE OF HEARING : 05 .02.2015 / DATE OF PRONOUNCEMENT : 20 .02.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 2.7.2013 IS AGAINST THE ORDER OF THE CIT (A) - 26, MUMBAI DATED 30.4.2013 FOR THE ASSESSMENT YEAR 2010 - 2011. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN DIRECTLY TO ALLOW DEDUCTION U/S 80P TO THE ASSESSEE EVEN THOUGH ASSESSEE CARRIES ON THE BANKING BUSINESS AND OTHER BUSINESS IN THE NAME OF A CREDIT COOPERATIVE SOCIETY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD C IT (A) HAS ERRED IN ALLOWING DEDUCTIONS U/S 80P(2)(A)(I) WITHOUT CONSIDERING INSERTION F SECTION 80P(4) AND SUB - CLAUSE (VIIA) TO SECTION 2(24) VIDE FINANCE ACT 2006 W.E.F 1.4.2007. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN HOLDING THAT THE FACTS OF THE ASSESSEES CASE ARE NOT IDENTICAL WITH ANY OF THE CASE LAWS RELIED UPON BY THE ASSESSING OFFICER ESPECIALLY DECISION OF THE ITAT JAIPUR IN THE CASE OF KEKRI SAHAKARI BHUMI VIKAS BANK LTD AND COCHIN ITAT IN TH E CASE OF KERALA STATE COOPERATIVE AGRICULTURAL DEVELOPMENT BANK. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN NOT FOLLOWING HIS OWN ORDER IN THE CASE OF VISHAL JANSEVA SAHAKARI PATASANSTA LTD FOR AY 2008 - 200 9 ON THE SAME ISSUE VIDE ORDER NO.CIT(A) - 26/IT - 30/15(3)(3)/10 - 11, DATED 4 TH JULY, 2012. 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) IS JUSTIFIED IN DELETING THE ADDITION MERELY ON THE GROUND THAT THE ACCEPTANCE O F DEPOSITS OF THE MEMBERS AND PROVIDING CREDIT FACILITIES TO ITS MEMBERS IS NOT FALLING UNDER THE BANKING ACTIVITIES AS DEFINED IN BANKING REGULATION ACT. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. NIL AFTER CLAIMING DEDUCTION U/S 80P(2) OF THE ACT FOR AN AMOUNT OF RS. 52,02,014/ - . DURING THE ASSESSMENT THE CLAIM OF THE ASSESS EE U/S 80P(2)(A)(I) OF THE ACT WAS EXAMINED BY THE ASSESSING OFFICER AND THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE CLAIM OF DEDUCTION UNDER THE SAID SECTION 80P(2)(A)(I) SHOULD NOT BE DISALLOWED IN VIEW OF THE INSERTION OF SECTION 80P(4) OF THE ACT EFFECTI VE FROM 1.4.2007. NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE, ASSESSING OFFICER HELD THAT THE ASSESSEE IS A COOPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. THUS, THE ASSESSEE FULFILLS THE CONDITION LAID DOWN U/S 56(C)(CCV) OF PART V OF THE BANKING REGULATION ACT, 1949 FOR BEING A COOPERATIVE BANK. THEREFORE, THE DEDUCTION U/S 80P(2)(A)(I) READ WITH SECTION 80P(4) WOULD NOT BE ALLOWABLE TO THE ASSESSEE . AGGR IEVED WITH THE DECISION OF ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, CIT (A) ALLOWE D THE ASSESSEES APPEAL. AGGRIEVED WITH THE DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 5. DURING THE PROCEEDINGS BEFORE US, LD DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. 6. ON THE OTHER HAND, LD COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF THE CIT (A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATER IAL PLACED BEFORE US. ON PERUSAL OF THE CIT (A)S ORDER IN GENERAL AND PARA 3.2.1 IN PARTICULAR, WE FIND THE SAME IS RELEVANT IN THIS REGARD. CONSIDERING THE IMPORTANCE OF THE SAID PARA 3.2.1 OF THE CIT (A)S ORDER, THE SAME IS EXTRACTED AS UNDER: 3.2.1 . FROM THE FACTS OF THE INSTANT CASE, IT IS QUITE CLEAR THAT THE APPELLANT HAS LIMITED ITSELF TO THE MEMBERS OF J.J. HOSPITAL AND GRANT MEDICAL COLLEGE EMPLOYEES COOP. CREDIT SOCIETY LTD. FURTHER, THE APPELLANT HAS NOT PROVIDED BANKING FACILITIES EITHER TO GENERAL PUBLIC AT LARGE OR EVEN TO THE MEMBERS OF THE SOCIETY. EVEN THE BYE - LAWS OF THE APPELLANT DOES NOT PROVIDE FOR BANKING ACTIVITIES. THEREFORE, FACTS OF THIS CASE ARE NOT IDENTICAL WITH ANY OF THE CASE LAWS RELIED UPON BY THE ASSESSING OFFICER. ON THE OTHER HAND, THE FACTS OF THE INSTANT CASE ARE ALMOST SIMILAR TO THE DECISIONS RELIED UPON BY THE APPELLANT IN THE CASES OF (I) ACIT S. BULDANA URBAN COOPERATIVE CREDIT SOCIETY LTD 32 TAXMANN.COM 69 NAGPUR TRIBUNAL AND (II) DCIT VS. JAYALKSHI MAHIL A VIVIDODESHAGALA SOUHARDA SAHAKARI LTD 23 TAXAMNN.COM 313 PANAJI TRIBUNAL WHERE THE ACTIVITIES OF THE ASSESSEES WERE LIMITED TO THE MEMBERS OF A SPECIFIC GROUP AND THE AREA OF OPERATIVE WAS ALSO LIMITED TO THE ACCEPTANCE OF DEPOSITS OF THE MEMBERS AND PRO VIDING CREDIT FACILITIES ONLY TO THE MEMBERS, WHICH HAVE BEEN HELD NOT FALLING UNDER THE BANKING ACTIVITIES AS DEFINED IN THE BANKING REGULATION ACT. THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS OF ITAT PUNE, NAGPUR AND PANJI, THE APPELLANT A LSO CANNOT BE HELD AS A COOPERATIVE BANK, HENCE THE DEDUCTION CLAIMED U/S 80P(2)(A)(I) CANNOT BE DENIED TO IT. ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO ALLOW THE DEDUCTION CLAIMED BY THE APPELLANT. THIS GROUND IS ALLOWED. 8. FORM THE ABOVE, WE FIND THAT THE CIT (A) HAS RIGHTLY ADJUDICATED THE ISSUE UNDER CONSIDERATION BY HOLDING THAT THE ASSESSEE AS A COOPERATIVE BANK, THE DEDUCTION OF CLAIM U/S 80P(2)(A)(I) OF THE ACT CANNOT BE DENIED IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRON OUNCED IN THE OPEN COURT ON 20 TH FEBRUARY, 2015. SD/ - SD/ - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 20 .2.2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI