SAI PRERANA CO-OP CREDIT SOCIETY LTD, MUMBAI V. INCOME TAX OFFICER 17(3)(2), MUMBAI

ITA 5113/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0184 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 05-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Section: 80P; 201; 113

Judgement Text

1 ITA NO.5113/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHA N (ACCOUNTANT MEMBER) I.T.A. NO. 5 113 /MUM/201 9 (ASSESSMENT YEAR : 2012 - 13) SAI PRERANA CO - OP CREDIT SOCIETY LTD 317, PURANAASHABLDG, GR.FL. NARASHINATHA STREET, KATHA BAZAR, MASJID BUNDER (W), MUMBAI - 400 009 PAN : A ADTS5638M VS ITO, WD. 17(3)(2 ), MUMBAI APPELLANT RESPONDENT APPELLANT BY SHRI BHARAT KUMAR , AR RESPONDENT BY SHRI SANJAY J SETHI, DR DATE OF HEARING 24 - 02 - 2021 DATE OF PRONOUNCEMENT 1 1 - 0 3 - 2021 O R D E R PER SAKTIJIT DEY (JM) THIS IS AN APPEAL BY THE ASSESSEE AGAINST ORDER DATED 1 2 - 0 4 - 201 9 OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 28 , MUMBAI FOR THE ASSESSMENT YEAR 20 1 2 - 1 3 . 2. THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, TH E LD.CIT(A) ERRED IN CONFIRMING THE INCOME TOWERS RECEIPT OF SERVICE 2 ITA NO.5113/MUM/2019 CHARGES OF RS.1,25,017/ - . IN FACT THE AMOUNT IS OF GROSS RECEIPT AND SUBJECT TO DEDUCTION OF EXPENSES OF THIS ACTIVITY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN CONFIRMING THE RECEIPT OF RS.13,333/ - ON ACCOU NT OF INTEREST RECEIVED FROM M.S.E.B.LTD. IN FACT THE AMOUNT IS ARRANGED OUT OF DEPOSIT RECEIVED FROM MEMBER. THIS DEPOSIT IS SUBJECT MATTER OF INTEREST PAYMENT. HENCE INTEREST PAID TO MEMBERS AGAINST DEPOSIT SHOULD BE REDUCED FROM INTEREST RECEIVED FRO M M.S.E.B.LTD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN CONFIRMING DISALLOWING GROSS RECEIPT FROM OUR 80P DEDUCTION INCOME INSTEAD OF DISALLOWING NET INCOME UNDER THE HEAD RECEIPT OF SERVICE CHARGES AND INTER EST RECEIVED FROM M.S.E.B.LTD. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A CO - OPERATIVE SOCIETY REGISTERED UNDER THE MAHARASHTRA CO - OPERATIVE SOCIETIES ACT, 1960. AS STATED BY THE ASSESSING OFFICER, THE ASSESSEE PROVIDES CREDIT FACILITIES TO ITS MEMBERS . FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 08 - 09 - 2012 DECLARING INCOME AT NIL. IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER, AFTER VERIFYING THE DETAILS ACCEPTED THAT THE INCOME DERIVED FROM THE MEMBERS WO ULD BE COVERED UNDER THE PRINCIPLE OF MUTUALITY; HENCE, NOT TAXABLE. HOWEVER, HE FOUND THAT CERTAIN OTHER INCOME WAS EARNED BY THE ASSESSEE FROM NON - MEMBERS. THE DETAILS ARE, AS UNDER: - I) INTEREST RECEIVED RS. 1,84,528/ - II) MSEDCL SERVICE CHARGES RECEIVED RS. 1,25,017/ - III) MSEDCL DEPOSIT INTEREST RS. 13,333/ - TOTAL RS.3,22,878/ - 3 ITA NO.5113/MUM/2019 4. HOLDING THAT THE AFORESAID INCOME RECEIVED FROM NON - MEMBER S WILL NOT QUALIFY FOR DEDUCTION U NDER SECTION 80 P OF THE INCOME - TAX ACT, 1961, HE ADDED BACK TO THE INCOME OF THE ASSESSEE. THE A FOR ESAID ADDITION WAS ALSO CONFIRMED BY LEARNED FIRST APPELLATE AUTHORITY. 5 . LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESEE SUBMITTED, WHILE DEALING WITH IDENTICAL ISSUE I N ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 - 09, THE TRIBUNAL, IN ITA NO.2160/MUM/2018 DATED 08 - 11 - 2018 HAS RESTORED IT BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION. THEREFORE, HE SUBMITTED, THE ISSUE MAY BE RESTORED BACK TO THE ASSESSING OFFICER . 6. THE LEARNED D EPARTMENTAL R EPRESENTATIVE ALSO AGREED FOR RESTORATION OF THE ISSU E TO THE AS S ESSING OFFICER IN VIEW OF THE DECISION OF THE TRIBUNAL. 7 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. WE FIND, WHILE DECIDING SIMI LAR ISSUE IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2008 - 09 (SUPRA), THE TRIBUNAL HAS RESTORED THE ISSUE TO THE ASSESSING OFFICER WITH THE FOLLOWING OBSERVATIONS : - 5. I HEARD BOTH THE PARTIES AND PERUSED THE RECORD. AS RIGHTLY POINTED OUT BY THE LEARNED AR, THE ISSUE UNDER CONSIDERATION RELATES TO QUANTUM OF EXPENSES ALLOWABLE AGAINST COMMISSION INCOME EARNED BY THE ASSESSEE. WHILE THE EXPENSES CLAIMED BY THE ASSESSEE HAS WORKED OUT TO 95% OF THE COMMISSION INCOME, THE LEARNED CIT(A) HAS RESTRICTED ALLOWA NCE TO 50% OF THE EXPENSES CLAIMED BY THE ASSESSEE. THERE IS ALSO NO DISPUTE BETWEEN THE PARTIES I.E.DEDUCTION U/S. 80P OF THE ACT IS NOT ALLOWABLE AGAINST NET COMMISSION INCOME. HENCE, I FIND MERIT IN THE CONTENTION OF LEARNED DR THAT THERE IS NO REQUIREM ENT TO GIVE ANY DIRECTION FOR DEDUCTION U/S 80P OF THE ACT. THERE SHOULD NOT BE ANY DISPUTE THAT EXPENSES INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING THE COMMISSION INCOME IS ALLOWABLE AS DEDUCTION. THEN, IT IS THE RESPONSIBILITY OF THE ASSESSEE TO S HOW THAT THE IMPUGNED EXPENSES WERE ACTUALLY INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING COMMISSION INCOME. I NOTICE THAT THE CO - ORDINATE BENCH HAS RESTORED AN IDENTICAL ISSUE IN THE ASSESSEES OWN CASE IN OTHER YEARS. FOLLOWING THE SAME, I 4 ITA NO.5113/MUM/2019 SET ASID E THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THIS ISSUE AFRESH. THE ASSESSEE IS DIRECTED TO CO - OPERATE WITH THE ASSESSING OFFICER BY FURNISHING NECESSARY INFORMATIONS THAT MAY BE CALLED FOR BY THE ASSESSING OFFICER. AFTER HEARING THE ASSESSEE, THE ASSESSING OFFICER MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 8. FACTS BEING IDENTICAL, FOLLOWING THE AFORESAID DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR DECIDING AFRESH KEEPING IN VIEW THE DIRECTIONS OF THE TRIBUNAL, REPRODUCED ABOVE. GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDE R PRONOUNCED ON 1 1 / 0 3 /2021. S D / - S D / - (N.K. PRADHAN) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 1 1 /0 3 /2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI