RAPTAKOS BRETT & COMAPANY, THANE V. ITO 15(1)(4), MUMBAI

ITA 5358/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3704 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 25-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAV
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO. 5358/MUM/2014 (ASSESSMENT YEAR : 2010-11) RAPTAKOS BRETT & CO. EMPLOYEES CO-OP CREDIT SOC. LTD., 1 ST POKHRAN ROAD, SHASTRI NAGAR, THANE(W), MUMBAI 400 606 PAN: AAAAR 4145C ... APPELLANT VS. THE INCOME TAX OFFICER , WARD -15(1)(4), MATRU MANDIR, TARDEO, MUMBAI 400007 .... RESPONDENT APPELLANT BY : MS. KRUPA TOPRANI RESPONDENT BY : SHRI VISHWAS JADHAV DATE OF HEARING : 17/12/2015 DATE OF PRONOUNCEMENT : 04/03/2016 ORDER THE CAPTIONED APPEAL IS PREFERRED BY THE ASSESSEE AND IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 12/06/2014 OF CIT(A)-26, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2010-11, WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER DATED 14/02/2013 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT). 2. IN THIS APPEAL THE ONLY GRIEVANCE OF THE ASSESS EE IS AGAINST THE ACTION OF THE LOWER AUTHORITIES IN DENYING EXEMPTIO N UNDER 2 ITA NO. 5358/MUM/2014 (ASSESSMENT YEAR : 2010-11) SECTION80P(2)(D) OF THE ACT IN RESPECT OF INTEREST INCOME OF RS.3,555,732/- EARNED ON FIXED DEPOSITS WITH OTHER CO-OPERATIVE BANK. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE APPELL ANT IS A CO-OPERATIVE SOCIETY REGISTERED WITH REGISTRAR OF CO-OPERATIVE S OCIETIES UNDER MAHARASHTRA CO-OPERATIVE SOCIETY ACT, 1960 AND IS, INTER-ALIA, ENGAGED IN THE ACTIVITY OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE DISPUTE BEFORE ME RELATES TO INTEREST INCOME EARNED ON FIXE D DEPOSITS TO THE TUNE OF RS.3,55,732/-, WHICH HAS BEEN HELD NOT ELIG IBLE FOR EXEMPTION UNDER SECTION 80P OF THE ACT. THE ONLY PLEA OF THE ASSESSEE BEFORE ME IS THAT SUCH INTEREST HAS BEEN EARNED FROM THE INV ESTMENT MADE WITH MUMBAI DISTRICT CENTRAL CO-OPERATIVE BANK AND, T HEREFORE, IT IS ELIGIBLE FOR EXEMPTION UNDER SECTION 80P(2)(D) OF THE ACT. 4. THE SAID CLAIM OF THE APPELLANT HAS BEEN DENIED BY THE CIT(APPEALS) ON THE GROUND THAT THE PROVISIONS OF S ECTION 80P(2)(D) OF THE ACT ARE NOT APPLICABLE BECAUSE SUCH INTEREST IN COME IS NOT EARNED FROM A CO-OPERATIVE SOCIETY. 5. THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE CIT(APPEALS) HAS ERRED IN DENYING THE EXEMPTION IN AS MUCH AS THE MUMBAI DISTRICT CENTRAL CO-OPERATIVE BANK WAS A CO- OPERATIVE SOCIETY, WHICH WAS OTHERWISE ENGAGED IN THE BUSINESS OF BAN KING. IN THIS CONTEXT, RELIANCE HAS BEEN PLACED ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. BAJAJ AUTO LTD. E MPLOYEES CO-OP. CREDIT SOCIETY LTD., IN ITA NO.1047/PN/2012 DATED 26/08/20 13. 3 ITA NO. 5358/MUM/2014 (ASSESSMENT YEAR : 2010-11) 6. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, REITERATED THE STAND OF THE REVENUE AUTHORITIES BY POINTING OUT THAT INTEREST INCOME HAS TO BE EARNED FROM CREDIT SOCIET Y FOR THE PURPOSES OF CLAIMING EXEMPTION UNDER SECTION 80P(2)(D) OF TH E ACT. 7. HAVING CONSIDERED THE RIVAL STANDS, I FIND THAT THE ISSUE IS DIRECTLY COVERED BY THE DECISION OF THE PUNE BENCH OF THE T RIBUNAL IN THE CASE OF M/S. BAJAJ AUTO LTD. EMPLOYEES CO-OP. CREDIT SOC IETY LTD. (SUPRA), WHEREIN ALSO THE ISSUE RELATED TO EXEMPTION UNDE R SECTION 80P(2)(D) OF THE ACT IN RESPECT TO INTEREST EARNED FROM FIXED DEPOSITS WITH A DISTRICT CENTRAL CO-OPERATIVE BANK. THE TRIBUNAL A LLOWED THE CLAIM OF THE ASSESSEE BY MAKING THE FOLLOWING DISCUSSION:- 4. WE HAVE HEARD THE LD. DR. NONE WAS PRESENT FOR THE ASSESSEE. WE HAVE ALSO PERUSED THE ORDER OF THE AUTHORITIES BELOW. IN OUR OPINION SO FAR AS THE AMOUNT OF INTEREST RECEIVED ON THE DEPOSIT WITH AUR ANGABAD DISTRICT CENTRAL CO-OPERATIVE BANK IS CONCERNED THE ASSESSING OFFICE R HAS NOT PROPERLY APPRECIATED THE PROVISIONS OF LAW. SEC. 80P(2)(D) R EADS AS UNDER: 80P(1): WHERE, IN THE CASE OF AN ASSESSEE BEING A C O-OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT T O THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUBSECTION (2), IN C OMPUTING THE TOTAL INCOME OF THE ASSESSEE. 80P(2): THE SUMS REFERRED TO IN SUB-SECTION (1) SHA LL BE THE FOLLOWING, NAMELY: (A) .......... (B) . (C) . 2(D): IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY THE CO-OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER CO-OPERATIVE SOCIETY, THE WHOLE OF SUCH INCOME; 5. SUB-SEC. (4) OF SEC. 80P HAS WITHDRAWN THE DEDUC TION TO THE COOPERATIVE BANK OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK W.E.F. THE A.Y. 2007-08. THE SAID PROVISION IS APPLICABLE TO THE AURANGABAD DISTRICT CENTRAL CO-OPERATIVE BANK (ADCCB) IN WHICH THE ASSESSEE SOCIETY HAS KEPT DEPO SIT. THE WITHDRAWAL OF DEDUCTION BY INSERTION OF SUB-SECTION (4) OF SEC. 8 0P DOES NOT CHANGE STATUS OF AURANGABAD DISTRICT CENTRAL CO-OPERATIV E BANK AS A CO-OPERATIVE SOCIETY WHICH IS CONTEMPLATED IN SEC. 80P(1) OF THE ACT. WE, THEREFORE, HOLD 4 ITA NO. 5358/MUM/2014 (ASSESSMENT YEAR : 2010-11) THAT THE INTEREST RECEIVED ON THE DEPOSIT WITH THE AURANGABAD DISTRICT CENTRAL COOPERATIVE BANK BY THE ASSESSEE ON THE DEP OSITS ARE SQUARELY COVERED U/S. 80P(1)(D) AND THE INTEREST RECEIVED ON DEPOSIT KEPT WITH THE AURANGABAD DISTRICT CENTRAL CO-OPERATIVE BANK IS AN ALLOWABLE DEDUCTION. SO FAR AS THE FINDING OF THE LD. CIT(A) THAT THE PROVI SIONS OF SEC. 80P(2)(A)(I), IN OUR OPINION THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF 4 ITA NO.1047/PN/2012, BAJAJ AUTO LTD,. AURANGABAD TOTAGA RS COOPERATIVE VS. ITO (SUPRA) IS AGAINST THE ASSESSEE AS INTEREST REC EIVED ON DEPOSITS WITH AURANGABAD DISTRICT CENTRAL CO-OPERATIVE BANK CANNO T BE SAID TO BE THE INCOME DERIVED FROM PROVIDING CREDIT FACILITIES TO ITS MEMBERS. WE, ACCORDINGLY, ANSWER THE GROUND TAKEN BY THE REVENUE . BUT, FINALLY WE HAVE CONFIRMED ORDER OF LD. CIT(A) GIVING RELIEF TO THE ASSESSEE UNDER SECTION. 80P(2)(D). FOLLOWING THE AFORESAID DECISION, WHICH HAS BEEN RE NDERED IN IDENTICAL CIRCUMSTANCES, I SET-ASIDE THE ORDER OF THE CIT(APP EALS) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSE E IN RESPECT OF EXEMPTION UNDER SECTION 80P(2)(D) OF THE ACT OF RS. 3,55,732/-. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/03/2016. SD/- (G.S. PANNU) ACCOUN TANT MEMBER MUMBAI, DATED 04/03/2016 VM , 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. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI