ITO 20(3)(5), MUMBAI V. VISHWABHARATI SAHAKARI PATSANSTHA LTD, MUMBAI

ITA 556/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0265 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 25-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T A KHAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI B R BASKARAN, ACCOUNTANT MEMBER ITA NO.556/MUM/2017 ASSESSMENT YEAR : 2013-14 ITO 2 0( 3 )( 5 ) MUMBAI VS. VISHWABHARATI SAHAKARI PATSANSTHA LTD., 2/26 KANCH BLDG., D P WADI, GHODAODEV, MUMBAI 400 033 PAN AAAAV6647D (APPELLANT) RESPONDENT) APPELLANT BY : SHRI T A KHAN RESPONDENT BY : SHRI GAUTAM GOKHALE DATE OF HEARING : 22 .0 6 .201 7 DATE OF PRONOUNCEMENT : 22. 0 6 . 201 7 O R D E R THE REVENUE HAS FILED THIS APPEAL CHALLENGING THE O RDER DATED 03-11-2016, PASSED BY LD CIT(A)-32, MUMBAI, AND IT RELATES TO THE ASSESSMENT YEAR 2013-14. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN ALLOWING DEDUCTION U/S 80P OF THE ACT TO THE ASSESSEE. THE REVENUE IS ALSO AGGRIEVED BY THE DECISION OF LD CIT (A) IN ALLOWING DEDUCTION U/S 80P ON THE INTEREST INCOME ALSO. 2. I HEARD THE PARTIES AND PERUSED THE RECORD. T HE ASSESSEE IS A CO- OPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT FACIL ITIES TO ITS MEMBERS, BY ACCEPTING DEPOSITS. THE ASSESSEE CLAIMED DEDUCTION U/S 80P OF THE ACT, WHICH WAS REJECTED BY THE AO BY HOLDING THAT THE AS SESSEE IS CARRYING ON BANKING BUSINESS AND HENCE NOT ELIGIBLE FOR DEDUCTI ON U/S 80P OF THE ACT AS PER THE PROVISIONS OF SEC. 80P(4) OF THE ACT. THE LD CIT(A) GRANTED RELIEF TO THE ASSESSEE BY FOLLOWING THE DECISION RENDERED BY THE HONBLE BOMBAY HIGH ITA NO.556/MUM/2017 VISHWABHARATI SAHAKARI PADSANSTHA LTD 2 COURT IN THE CASE OF QUEPEM URBAN CO-OPERATIVE CRED IT SOCIETY (2015)(58 TAXMANN.COM 113). AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL. 3. A PERUSAL OF THE ORDER PASSED BY HONBLE BOMBA Y HIGH COURT IN THE CASE OF QUEPEM URBAN CO-OPERATIVE CREDIT SOCIETY (REFERR ED ABOVE) WOULD SHOW THAT THE HONBLE BOMBAY HIGH COURT, IN PARAGRAPH 9 OF ITS ORDER, HAS HELD THAT IT IS REQUIRED TO BE EXAMINED AS TO WHETHER TH E ASSESSEE IS A PRIMARY CO- OPERATIVE BANK AS DEFINED IN PARA V OF THE BANKING REGULATION ACT. THEN THE HONBLE BOMBAY HIGH COURT REFERRED TO SECTION 5(CCV ) OF THE BANKING REGULATION ACT, WHICH DEFINES A PRIMARY CO-OPERATIV E BANK TO MEAN A COOPERATIVE SOCIETY WHICH CUMULATIVELY SATISFIES TH E FOLLOWING THREE CONDITIONS:- (1) ITS PRINCIPAL BUSINESS OR PRIMARY OBJECT SHOUL D BE BANKING BUSINESS OF BANKING. (2) ITS PAID UP SHARE CAPITAL AND RESERVES SHOULD NOT BE LESS THAN RUPEES ONE LAKH. (3) ITS BYE-LAWS DO NOT PERMIT ADMISSION OF ANY OT HER CO-OPERATIVE SOCIETY AS ITS MEMBER. THE HONBLE HIGH COURT THEN EXAMINED THE APPLICABIL ITY OF THE ABOVE SAID THREE CONDITIONS AND NOTICED THAT THE ASSESSEE BEFO RE THE HONBLE HIGH COURT DID NOT SATISFY ONE OF THE CONDITIONS. ACCORDINGLY IT WAS HELD THAT THAT THE SAID ASSESSEE IS NOT A PRIMARY CO-OPERATIVE BANK AN D ACCORDINGLY IT WAS HELD THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80P OF THE ACT. 4. IN THE INSTANT CASE, I NOTICE THAT THE APPLICA BILITY OF PROVISIONS OF SEC. 5(CCV) OF THE BANKING REGULATIONS ACT HAS NOT BEEN EXAMINED. THE LD CIT(A) ALSO, WITHOUT EXAMINING THE SAID PROVISIONS, HAS SI MPLY HELD THAT THE DECISION RENDERED BY HONBLE BOMBAY HIGH COURT WOULD BE APPL ICABLE. ITA NO.556/MUM/2017 VISHWABHARATI SAHAKARI PADSANSTHA LTD 3 5. THE LD A.R ALSO PLACED RELIANCE ON THE DECISI ON RENDERED BY THE DIVISION BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE RE NDERED IN ITA NO.4974/MUM/2016 RELATING TO AY 2012-13. HOWEVER, ON A CAREFUL PERUSAL OF THE SAID ORDER OF THE TRIBUNAL, I NOTICE THAT THE D IVISION BENCH ALSO DID NOT CONSIDER THE DECISION RENDERED BY THE JURISDICTIONA L BOMBAY HIGH COURT IN THE CASE OF QUEPEM URBAN CO-OPERATIVE CREDIT SOCIETY (S UPRA). 6. IN VIEW OF THE FOREGOING DISCUSSIONS, I AM OF THE VIEW THAT THE ISSUE RELATING TO DEDUCTION U/S 80P OF THE ACT NEEDS TO B E EXAMINED AFRESH IN ACCORDANCE WITH THE DECISION RENDERED BY HONBLE BO MBAY HIGH COURT IN THE CASE OF QUEPEM URBAN CO-OPERATIVE CREDIT SOCIETY (S UPRA). ACCORDINGLY I SET ASIDE THE ORDER PASSED BY LD CIT(A) AND RESTORE THE SAME TO THE FILE OF THE AO FOR EXAMINING IT AFRESH. 7. THE REVENUE HAS ALSO RAISED A GROUND WITH THE CLAIM THAT THE INTEREST INCOME ACCRUING/RECEIVED FROM INVESTMENTS SHOULD BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. SINCE THE AO HAD R EJECTED THE DEDUCTION CLAIMED U/S 80P OF THE ACT, HE HAD NO OCCASION TO E XAMINE THIS ISSUE. ACCORDINGLY, THIS ISSUE IS ALSO RESTORED TO THE FIL E OF THE AO. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 2 ND JUNE 2017 SD/- (B R BASKARAN) ACCOUNTANT MEMBER MUMBAI, DATED :22 ND JUNE, 2017. SA ITA NO.556/MUM/2017 VISHWABHARATI SAHAKARI PADSANSTHA LTD 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI