ITO 15(1)(4), MUMBAI V. THE MAHARASHTRA MANTRALIYA VA SANLAGANA SHASKIYA KARAMCHARI CO OP CREDIT SOCIETY LTD, MUMBAI

ITA 5051/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83960 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 04-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI , . . , ! BEFORE SHRI JOGINDER SINGH, JM AND SHRI N. K. BILL AIYA, AM ' #$ ./ I.T.A. NO.5051/MUM/2013 ( / ASSESSMENT YEAR: 2010-11) THE ITO-15(1)(4), MATRU MANDIR, MUMBAI-400 007 / VS. THE MAHARASHTRA MANTRALIYA VA SANLAGANA SHASKIYA KARAMCHARI CO- OP. CREDIT SOCIETY LTD. POST OFFICER BLOCK, MANTRALIYA, MUMBAI-400 032 & ./''' ./PAN/GIR NO. AAAAT 8908 R ( #$&( /APPELLANT ) : ( )*&( / RESPONDENT ) #$&( + , / APPELLANT BY : SHRI VIVEK BATRA )*&( + , / RESPONDENT BY : SHRI S. K. MUTSADDI - ./ + 0 1 / DATE OF HEARING : 29.10.2014 234 + 0 1 / DATE OF PRONOUNCEMENT : 29.10.2014 '5 / O R D E R PER N. K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-26, MUMBAI DATED 23.05.2013 PERTAINING TO THE ASSESSMEN T YEAR (A.Y.) 2010-11. THE GRIEVANCE OF THE REVENUE READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO ALLOW DEDUCTION U/ S.80P TO THE ASSESSEE EVEN THOUGH ASSESSEE CARRIES ON BANKING AND OTHER B USINESS IN THE NAME OF A CREDIT CO-OPERATIVE SOCIETY. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S.80P(2)(A )(I) WITHOUT 2 ITA NO. 5051/MUM/2013 (A.Y. 2010-11) ITO VS. MAHARASHTRA MANTRALYA VA SANLAGANA SHASKIYA KARMACHARI CO-OP. SOCIETY LTD. CONSIDERING INSERTION OF SEC.80P(4) AND SUB CLAUSE (VIIA) TO SEC.2(24) VIDE FINANCE ACT, 2006 W.E.F. 01/04/2007.' 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE FACTS OF THE A SSESSEE'S CASE ARE NOT IDENTICAL WITH ANY OF THE CASE LAWS RELIED UPON BY THE A.O. ESPECIALLY DECISION OF ITAT JAIPUR IN THE CASE OF KEKRI SAHAKA RI BHUMI VIKAS BANK LTD., AND COCHIN ITAT IN THE CASE OF KERALA STATE C O-OP. AGRICULTURAL RURAL DEVELOPMENT BANK LTD. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING HIS OWN ORDER IN THE CASE OF VISHAL JANSEVE SAHKARI PATSANTHA LTD., FOR A. Y. 2008-09 O N THE SAME ISSUE VIDE ORDER NO.CJT(A)-26/IT-30/15(3)(3)/10-11 DTD. 4 TH JULY, 2012. 2. THE ASSESSEE IS A CO-OPERATIVE CREDIT SOCIETY RE GISTERED UNDER CO-OPERATIVE SOCIETIES ACT. THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF ACCEPTING DEPOSITS FROM MEMBERS AND LENDING TO MEMBERS OF THE CO-OPERATIVE CREDIT SOCIETY ONLY ON THE BASIS OF SELF HELP AND MUTUALITY. THE GROSS TOTAL INCOME FOR THE YEAR UNDER CONSIDERATION WAS AT RS.1,50,31,886/- AND THE ASSESSEE HAS CLAIMED DEDUC TION U/S.80P(2)(A)(I) OF THE ACT. THE ASSESSEE WAS ASKED TO JUSTIFY THE CLAIM OF DEDUCTIO N CLAIMED BY IT. THE ASSESSEE FILED A DETAILED REPLY IN SUPPORT OF ITS CLAIM OF EXEMPTION CLAIMING THAT IT IS NOT CO-OPERATIVE BANK AND, THEREFORE, IT IS NOT HIT BY SECTION 80P(4 ) OF THE ACT AND, THEREFORE, ENTITLED FOR DEDUCTION U/S.80P(2)(A)(I). THE ASSESSING OFFICER ( A.O.) WAS OF THE FIRM BELIEF THAT THE ASSESSEE FULFILS THE CONDITION LAID DOWN U/S.56(C)( CCV) OF PART V OF THE BANKING REGULATION ACT, 1949 FOR BEING A CO-OPERATIVE BANK. THE A.O. PROCEEDED BY DENYING THE CLAIM OF DEDUCTION. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND REITERATED ITS CLAIM. AFTER CONSIDERING THE FACTS AND THE SUBM ISSIONS MADE BY THE ASSESSEE, THE LD. CIT(A) WAS CONVINCED THAT THE ASSESSEE HAS LIMITED ITSELF TO THE MEMBERS OF THE MAHARASHTRA MANTRALIYA VA SANLAGANA SHASKIYA KARAMC HARI CO-OP. CREDIT SOCIETY LTD. THE LD. CIT(A) WAS ALSO CONVINCED THAT THE ASSESSEE HAS NOT PROVIDED BANKING FACILITIES EITHER TO GENERAL PUBLIC AT LARGE OR EVEN TO THE ME MBERS OF THE SOCIETY. RELYING UPON 3 ITA NO. 5051/MUM/2013 (A.Y. 2010-11) ITO VS. MAHARASHTRA MANTRALYA VA SANLAGANA SHASKIYA KARMACHARI CO-OP. SOCIETY LTD. CERTAIN JUDICIAL DECISIONS, THE LD. CIT(A) ALLOWED THE CLAIM OF DEDUCTION U/S.80P(2)(A)(I) OF THE ACT. AGGRIEVED BY THIS THE REVENUE IS BEFORE US. 3. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) STRONGL Y SUPPORTED THE FINDINGS OF THE A.O. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT T HE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE GUJA RAT HIGH COURT AND BY THE DECISION OF THE TRIBUNAL MUMBAI BENCHES. THE LD. COUNSEL SUPPLI ED THE COPIES OF THE DECISIONS RELIED UPON. 4. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND THE DECISIONS BROUGHT TO OUR NOTICE. THE HONBLE GUJARAT HIGH COU RT IN THE CASE OF CIT VS. JAFARI MOMIN VIKAS CO-OP. CREDIT SOCIETY LTD. IN ITA NOS. 442 OF 2013 WITH 443 OF 2013 AND 863 OF 2013 HELD AS UNDER: 7. FROM THE ABOVE CLARIFICATION, IT CAN BE GATHER ED THAT SUB-SECTION (4) OF SECTION 80P WILL NOT APPLY TO AN ASSESSEE WHICH IS NOT A CO-OPERATIVE BANK. IN THE CASE CLARIFIED BY CBDT, DELHI CO-OP. U RBAN THRIFT & CREDIT SOCIETY LTD. WAS UNDER CONSIDERATION. CIRCULAR CLAR IFIED THAT THE SAID ENTITY NOT BEING A CO-OPERATIVE BANK, SECTION 80P(4) OF TH E ACT WOULD NOT APPLY TO IT. IN VIEW OF SUCH CLARIFICATION, WE CANNOT ENTERT AIN THE REVENUES CONTENTION THAT SECTION 80P(4) WOULD EXCLUDE NOT ON LY THE CO-OPERATIVE BANKS OTHER THAN THOSE FULFILLING THE DESCRIPTION C ONTAINED O/TAXAP/442/2013 ORDER THEREIN BUT ALSO CREDIT SOCI ETIES, WHICH ARE NOT CO-OPERATIVE BANKS. IN THE PRESENT CASE, RESPON DENT ASSESSEE IS ADMITTEDLY NOT A CREDIT CO-OPERATIVE BANK BUT A CRE DIT CO-OPERATIVE SOCIETY. EXCLUSION CLAUSE OF SUB-SECTION (4) OF SECTION 80P, THEREFORE, WOULD NOT APPLY. IN THE RESULT, TAX APPEALS ARE DISMISSED. SIMILAR VIEW IS TAKEN BY THE TRIBUNALS MUMBAI BENC H IN THE CASE OF M/S. MUMBAI TELEWORKERS CO-OP. CREDIT SOCIETY LTD. IN ITA NO. 7106/MUM/2012 AND IN THE CASE OF M/S. KULSWAMI CO-OP. CREDIT SOCIETY LTD. IN ITA NO. 3223/MUM/2011 AND 505/MUM/2012. AS THE FACTS AND THE ISSUES ARE IDENT ICAL TO THE FACTS AND ISSUES INVOLVED IN THE JUDICIAL DECISIONS REFERRED TO HEREINABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 4 ITA NO. 5051/MUM/2013 (A.Y. 2010-11) ITO VS. MAHARASHTRA MANTRALYA VA SANLAGANA SHASKIYA KARMACHARI CO-OP. SOCIETY LTD. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. $6 407 . + #$ 6 + 0 ! ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 29 TH , 2014 SD/- SD/- (JOGINDER SINGH) (N. K. BILLAIYA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER - / MUMBAI; 8 DATED : 29.10.2014 ... ./ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. #$&( / THE APPELLANT 2. )*&( / THE RESPONDENT 3. ' ' - 90 ( #$ ) / THE CIT(A) 4. ' ' - 90 / CIT - CONCERNED 5. <.= )0> , ' #$1 #> 4 , - / / DR, ITAT, MUMBAI 6. ?@ A/ / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , - / / ITAT, MUMBAI