RESERVE BANK STAFF CO-OPERATIVE CREDIT SOCIETY LIMITED, MUMBAI V. INCOME TAX OFFICER, WARD-12(3)(4), MUMBAI

ITA 5040/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7782 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 25-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: DINAR PRAKASH DAFTARI; SIDDHESH N MAYEKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER ITA NO.5040/M/2017 ASSESSMENT YEAR: 2010-11 ITA NO.5041/M/2017 ASSESSMENT YEAR: 2012-13 M/S. RESERVE BANK STAFF CO- OPERATIVE CREDIT SOCIETY LTD., AMAR BUILDING, SECOND FLOOR, SIR P.M. ROAD, FORT, MUMBAI-400 001 PAN: AAAAR0178F VS. INCOME TAX OFFICER, WARD 12(3), ROOM NO.660, AAYAKAR BHAVAN, MAHARSHI KARVE ROAD, MUMBAI 400 020 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI DINAR PRAKASH DAFTARI, A.R. & SHRI SIDDHESH N. MAYEKAR, A.R. REVENUE BY : MS. N. HEMALATHA, D.R. DATE OF HEARING : 11.12.2017 DATE OF PRONOUNCEMENT : 22.12.2017 O R D E R PER D.T. GARASIA, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 04.04.2017 & 03.04.2017 OF THE COMM ISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010-11 & 2012-13 RESPE CTIVELY. 2. DURING THE COURSE OF HEARING, THE LD. A.R. SUBMI TTED BEFORE ME THAT THIS CASE IS COVERED BY THE DECISION OF TRIBUN AL FOR A.Y. 2009-10 WHEREIN THE TRIBUNAL HAS GIVEN THE DIRECTION TO REC OMPUTE THE TAXABLE INCOME BUT THE APPEAL WAS DISMISSED. THEREFORE, NO DIRECTION WAS FOLLOWED BY AO. ITA NO.5040/M/2017 & ITA NO.5041/M/2017 M/S. RESERVE BANK STAFF CO-OPERATIVE CREDIT SOCIETY LTD. 2 3. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CO- OPERATIVE CREDIT SOCIETY OF THE EMPLOYEES OF RESERV E BANK OF INDIA. THE MAJOR ACTIVITY OF THE ASSESSEE IS IN THE NATURE OF OBTAINING CONTRIBUTIONS FROM ITS MEMBERS AND LENDING THE AMOU NT SO RECEIVED FROM SUCH CONTRIBUTION TO ITS MEMBERS ON INTEREST. THE INTEREST SO EARNED IS DISTRIBUTED AMONG THE MEMBERS. THE ASSES SING OFFICER (HEREINAFTER REFERRED TO AS THE AO) IN A.Y. 2010-11 NOTICED THAT THE ASSESSEE HAS RECEIVED INTEREST INCOME OF RS.19,34,6 40/- FROM PERSONS OTHER THAN MEMBERS OF THE SOCIETY AND IN A.Y. 2012- 13 RS.22,41,055/-. THE ASSESSEE HAS ALSO RECEIVED INS URANCE COMMISSION IN A.Y. 2010-11 OF RS.2,45,642/- AND IN A.Y. OF RS.3,49,962/-. THE ASSESSEE COMPANY HAS BEEN PROVI DING CREDIT FACILITY TO NON-MEMBERS AND THE INTEREST AND OTHER INCOME EARNED FROM NON-MEMBERS WAS NOT ELIGIBLE FOR DEDUCTION UND ER SECTION 80P, AS THE SAME IS RESTRICTED TO THE BUSINESS OF PROVID ING CREDIT FACILITIES TO THE MEMBERS OF THE SOCIETY ONLY. 4. MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT (A) HAS DISMISSED THE APPEALS AND THE TRIBUNAL HAS DISMISSE D THE APPEALS WITH THE DIRECTION WHICH READS AS UNDER: 9. AT THIS STAGE, THE LEARNED A.R. FOR THE ASSESSE E HAS SUBMITTED THAT THE ASSESSEE SOCIETY HAS INCURRED SOME EXPENDITURE IN T HE COURSE OF EARNING INTEREST INCOME AND FROM DOING THE INSURANCE OF NONMEMBERS BORROWERS AND THAT THE EXPENDITURE SO INCURRED IS REQUIRED TO BE DEDUCTED AND ONLY THE NET INCOME IS LIABLE TO BE TAXED. WE FIND FORCE IN THIS CONTENTION OF TH E ASSESSEE. ONLY THE NET INCOME FROM NONMEMBERS IS REQUIRED TO BE TAXED. THE ASSES SING OFFICER IS, THEREFORE, DIRECTED TO RECOMPUTE THE TAXABLE INCOME ACCORDING LY. SUBJECT TO THE ABOVE OBSERVATIONS, THE APPEAL OF THE ASSESSEE IS DISMISS ED. 5. RESPECTFULLY FOLLOWING THE SAME I DIRECT THE AO TO TAX ONLY THE NET INCOME FROM NON-MEMBERS. ITA NO.5040/M/2017 & ITA NO.5041/M/2017 M/S. RESERVE BANK STAFF CO-OPERATIVE CREDIT SOCIETY LTD. 3 6. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22.12.2017. SD/- (D.T. GARASIA) JUDICIAL MEMB ER MUMBAI, DATED: 22.12.2017. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.