SINDHUDURG NAGRI SAHKARI PATPEDHI LTD, MUMBAI V. ASST, CIT CIR 2, KALYAN

ITA 5185/MUM/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4289 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 17-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S N RAJU
• Assessee Lawyers: SANJIV G BRAHME; SSH JAYANT R BHATT
• Section: 143(3)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI- E,BENCH , ,, , , ,, , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & SANJAY GARG,JUDICIAL MEMBER /.ITA NOS./5185/MUM/2011 & 1186/MUM/2012, . ./ASSESSMENT YEARS-2007-08 &08-09 SINDHUDURG NAGRI SAHAKARI PATPEDHI LTD.A WING, VARDHMAN NAGAR,SHIVAJI NAGAR ROAD VADAVALI SECTION,AMBERNATH (E) PIN-421 501 PAN: AAAAS 0887 Q VS. ACIT CIRCLE- 2 KALYAN THANE . ( / ASSESSEE ) ( / RESPONDENT) /ASSESSEE BY : S/SH. JAYANT R. BHATT & SANJIV G. BRAHME (AR) / REVENUE BY : SH.B.S.N. RAJU (DR) / DATE OF HEARING :12 - 11 -2015 / DATE OF PRONOUNCEMENT : 01.01.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 18.3.2011 OF THE CIT (A )-II, THANE,THE ASSESSEE HAS FILED THE APPEALS FOR ABOVE MENTIONED TWO ASSESSMENT YEARS (A Y.S.). ITA/5185/MUM/2011-AY.-2007-08 ASSESSEE ,A COOPERATIVE SOCIETY,IS ENGAGED IN PROVI DING THE CREDIT FACILITY TO ITS MEMBERS. IT FILED ITS RETURN OF INCOME ON 5.10.2007 DECLARING T OTAL INCOME OF RS. NIL.THE ASSESSING OFFICER(AO)COMPLETED THE ASSESSMENT ON 18.9.2009 U/ S. 143(3) OF THE ACT, DETERMINING ITS INCOME AT RS. 4,46,013/-. 2. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THA T THE ASSESSEE HAD CLAIMED EXEMPTION U/S.80P (2)(A)(I) OF THE ACT,THAT THE ASSESSEE HAD MADE VARIOUS INVESTMENT AND HAD EARNED TOTAL INTEREST OF RS. 22.87 LAKHS.HE DIRECTED THE A SSESSEE TO SUBMIT THE DETAILS OF ITS INVESTMENT AND THE INTEREST RECEIVED ON IT.FROM THE DETAIL SUBMITTED,HE OBSERVED THAT SOME OF ITS INVESTMENTS WERE WITH NON-COOPERATIVE INSTITUTI ONS.REFERRING TO PROVISIONS OF SECTION 80P(2)(D)OF THE ACT,HE HELD THAT INTEREST RECEIVED FROM INVESTMENT WITH NON-COOPERATIVE INSTITUTIONS WAS NOT ALLOWABLE AS DEDUCTION, THAT S UCH INTEREST WORKED OUT AT RS. 5,00,239/-. BEFORE HIM,THE ASSESSEE ARGUED THAT PROPORTIONATE E XPENSES SHOULD BE ALLOWED AGAINST THE INTEREST.HOWEVER, THE AO WAS OF THE VIEW THAT ASSES SEE WAS ENTITLED TO CLAIM PROPORTIONATE EXPENSES AMOUNTING TO RS. 54,226/- AS AGAINST RS. 4 .32 LAKHS CLAIMED BY IT. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).AFTER CONSIDERING THE SUBM ISSION OF THE ASSESSEE AND THE ASSESSMENT ORDER,HE HELD THAT INTEREST RECEIVED FRO M INVESTMENT MADE WITH NON-COOPERATIVE INSTITUTION WAS NOT ALLOWABLE AS DEDUCTION, THAT IF THE INCOME WAS DERIVED BY A COOPERATIVE SOCIETY FROM THE BUSINESS OF BANKING ONLY THAN IT W OULD FALL WITHIN THE EXEMPTION CLAUSE, THAT IF THE INCOME AROSE FROM AND OUT OF THE BUSINESS WI TH THIRD PARTY THE EXEMPTION WAS NOT AVAILABLE,THAT THE INVESTMENT OF ASSET WAS NOT A PA RT OF BUSINESS OF THE ASSESSEE. HE REFERRED TO CASE OF TOTGARS COOPERATIVE SALE SOCIETY (322 IT R 283) AND HELD THAT THE ORDER OF THE AO TAXING THE INTEREST INCOME RECEIVED FROM INVESTMENT IN OTHER BANKS AS INCOME FROM OTHER SOURCES WAS IN ORDER. ON THE ISSUE ALLOWANCE OF EX PENSES AGAINST SUCH INCOME HE UPHELD THE ORDER OF THE AO. IN SHORT HE DISMISSED THE APPEAL F ILED BY THE ASSESSEE. 2 SINDHUDURG NAGRI SAHAKARI PATPEDHI LTD.5185/11 &118 6/12 4 .DURING THE COURSE OF HEARING BEFORE US,THE AUTHORI SED REPRESENTATIVE (AR) CONTENDED THAT SIMILAR ISSUE HAD ARISEN IN THE APPEAL FILED BY THE AO FOR THE AY.2009-10 (ITA NO. 1935/ MUM/2014 DATED 10.9.2015), THAT THE TRIBUNAL HAD DI SMISSED THE APPEAL FILED BY THE AO. HE ALSO RELIED UPON THE CASE OF JAOLI TALUKA SAHAKARI PATPEDHI MARYADIT (ITA 6620/MUM/2014 AY.2011-12 DATED 10.8.2015), MEHSANA DISTRICT COOPE RATIVE BANK LTD. (251 ITR 522). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE WHILE DECIDING THE APPEAL FOR A.Y. 2009-10,THE TRIB UNAL HAS, IN PARA 2, MENTIONED THE FACT AS UNDER : THE GRIEVANCE OF THE REVENUE IS TWO FOLDS. FIRSTLY THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 33,19,403 ON ACCOUNT OF DISALLOWANCE OF DEDU CTION U/S. 80P(2)(D) OF THE ACT , SECONDLY, THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM U/S. 80P (2)(A)(I) OF THE ACT. WE FIND THAT THE TRIBUNAL HAD REJECTED THE APPEAL F ILED BY THE REVENUE.AS THE FACTS OF THE CASE FOR THE YEAR UNDER CONSIDERATION ARE SIMILAR T O THE FACTS OF AY.2009-10,SO,RESPECTFULLY FOLLOWING THE ORDER FOR THAT YEAR WE DECIDE THE EFF ECTIVE GROUND OF APPEAL (GOA-1) IN FAVOUR OF THE ASSESSEE. 6. WE FIND THAT GROUND NO. 2 IS ALTERNATE GROUND RAISE D BY THE ASSESSEE. AS THE MAIN GROUND HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE,HENCE,WE ARE OF THE OPINION THAT SECOND GROUND IS INFRUCTUOUS AND DOES NOT NEED ANY ADJUDICATION. ITA NO. 1186/MUM/2011 AY. 2008-09 FOLLOWING OUR ORDER FOR THE EARLIER A.Y., WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. AS STATED EARLIER,GROUND NO. 2 IS INFRUCTUOUS. AS A RESULT,APPEALS FILED BY THE ASSESSEE FOR BOTH THE A.YS. STAND ALLOWED. . . . ORDER PRO NOUNCED IN THE OPEN COURT ON 1 ST JANUARY, 2016 1 , 2016 SD/- SD/- ( /SANJAY GARG) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE: 01.01.2016 . . . .. . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / !' , , . . . 6. GUARD FILE/ & ! ! //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.