ROHIT CHAMBERS PREMISES CO OP SOCIETY LIMITED, MUMBAI V. AAYAKAR BHAWAN, MUMBAI

ITA 5859/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5352 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 11-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTI LAXMI NAYAK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 5859/MUM/2018 ASSESSMENT YEAR: 2014-15 ROHIT CHAMERS PREMISES CO-OP SOCIETY LTD, GR. FLOOR, ROHIT CHAMBERS, JANMBHUMI MARG, MUMBAI- 400 001. VS. THE INCOME TAX OFFICER- 17(3)(2),MUMBAI, AAYAKAR BHAVAN, , MUMBAI-400020. PAN NO. AAAAR4550K APPELLANT RESPON DENT ASSESSEE BY : MS. ARATI VISSANJI, AR REVENUE BY : MS. JYOTI LAXMI NAYAK, DR DATE OF HEARING : 18/10/2019 DATE OF PRONOUNCEMENT : 25/10/2019 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2014-15. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-28, MUMBAI [IN SHORT CI T(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3)OF THE IN COME TAX ACT 1961, (THE ACT). 2. THE SOLITARY ISSUE URGED IN THIS APPEAL IS WHETH ER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80P(2)(D) OF THE ACT, I N RESPECT OF INTEREST RECEIVED FROM CO-OPERATIVE BANKS. ITA 5859/MUM/2018 ROHIT CHAMBERS PRE MISES CO-OP. SOCIETY LTD 2 THE ASSESSEE IS A REGISTERED CO-OPERATIVE HOUSING S OCIETY. IT EARNED INTEREST INCOME OF RS.27,60,330/- FROM DEPOS ITS KEPT WITH CO- OPERATIVE BANKS. THE ASSESSEE CLAIMED IT AS DEDUCTI ON U/S. 80P(2)(D) OF THE ACT. THE AO REJECTED THE CLAIM ON THE GROUND TH AT INTEREST RECEIVED FROM OTHER CO-OPERATIVE SOCIETIES IS NOT DEDUCTIBLE U/S. 80P(2)(D) OF THE ACT, SINCE THE WORD BANK IS NOT THERE IN THE SAID SECTION. IN APPEAL, THE LD. CIT(A) CONFIRMED THE ORDER OF THE AO. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. WE FIND THAT AN IDEN TICAL ISSUE WAS CONSIDERED BY THE ITAT I BENCH, MUMBAI IN THE CAS E OF MAYOOR CO- OPERATIVE HOUSING SOCIETY LIMITED V. ITO [ITA NO. 263/MUM/2018] FOR A.Y. 2013-14 AND THE TRIBUNAL VIDE ORDER DATED 19.03.2018 HELD AS UNDER: 7. I HEARD THE PARTIES AND PERUSED THE RECORD. I NO TICE THAT THE HON'BLE KARNATAKA HIGH COURT HAS INITIALLY TAKEN THE FOLLOW ING VIEW IN THE CASE OF TOTAGARS CO-OPERATIVE SALE SOCIETY LTD (392 ITR 74) '....THE WORD 'COOPERATIVE BANK' IS A WORD OF LIMITED EXTENT, WHI CH MERELY DEMARCATES AND IDENTIFIES A PARTICULAR SPECIES OF THE GENUS CO-OPE RATIVE SOCIETIES. COOPERATIVE SOCIETY CAN BE OF DIFFERENT NATURE, AND CAN BE INVOLVED IN DIFFERENT ACTIVITIES; THE COOPERATIVE SOCIETY BANK IS MERELY A VARIETY OF THE CO- OPERATIVE SOCIETIES. THUS THE CO-OPERATIVE BANK WHI CH IS A SPECIES OF THE GENUS WOULD NECESSARILY BE COVERED BY THE WORD 'CO- OPERATIVE SOCIETY'....... ADMITTEDLY, THE INTEREST WHICH THE ASSESSEE HAD EAR NED WAS FROM A CO- OPERATIVE SOCIETY BANK. THEREFORE, ACCORDING TO SEC . 80P(2)(D) OF THE I.T ACT, THE SAID AMOUNT OF INTEREST EARNED FROM A CO-OPERAT IVE SOCIETY BANK WOULD BE DEDUCTIBLE FROM THE GROSS INCOME OF THE CO-OPERA TIVE SOCIETY IN ORDER TO ASSESS ITS TOTAL INCOME.' ITA 5859/MUM/2018 ROHIT CHAMBERS PRE MISES CO-OP. SOCIETY LTD 3 8. HOWEVER, THE VERY SAME HON'BLE KARNATAKA HIGH CO URT IN THE VERY SAME ASSESSEE'S CASE IN ITA NO.100066 OF 2016 & OTHERS D ATED 16-06- 2017 HAS TAKEN THE VIEW THAT THE INTEREST INCOME EARNED BY A COOPERATIVE SOCIETY FROM A CO-OPERATIVE BANK IS NOT DEDUCTIBLE U/S 80P(2)(D) OF THE ACT. 9. THE LD A.R HAS REFERRED TO ME THE DECISION RENDE RED BY HON'BLE HIMACHAL PRADESH HIGH COURT IN THE CASE OF KANGRA CO-OPERATI VE BANK LTD (SUPRA), WHEREIN THE HIGH COURT HAS OBSERVED AS UNDER:- '... .FURTHERMORE, THE INVESTMENTS HAVE BEEN MADE IN H.P. STATE CO- OPERAT IVE BANK WHICH IS ALSO A CO-OPERATIVE SOCIETY AND THEREFORE EVEN UNDER SEC. 80P(2)(D) OF THE ACT, INTEREST INCOME FROM INVESTMENTS MADE IN ANY CO-OPE RATIVE SOCIETY WOULD ALSO BE ENTITLED FOR DEDUCTION.' 10. THUS, I NOTICE THAT THERE ARE DIVERGENT VIEWS O N THIS MATTER. THE HON'BLE KARNATAKA HIGH COURT HAS EXPRESSED THE VIEW THAT TH E DEDUCTION U/S 80P(2)(D) WOULD NOT BE AVAILABLE IN RESPECT OF INTE REST INCOME RECEIVED FROM CO-OPERATIVE BANK, WHEREAS THE HON'BLE HIMACHAL PRA DESH HIGH COURT HAS HELD THAT THE SAID DEDUCTION WOULD BE AVAILABLE. TH E HON'BLE SUPREME COURT HAS HELD IN THE CASE OF VEGETABLE PRODUCTS LTD (88 ITR 192) THAT IF TWO REASONABLE CONSTRUCTIONS OF A TAXING PROVISION ARE POSSIBLE THAT CONSTRUCTION WHICH FAVOURS THE ASSESSEE MUST BE ADOPTED. BY APPL YING THE SAID PRINCIPLE, THE VIEW TAKEN BY HON'BLE HIMACHAL PRADESH HIGH COU RT, WHICH IS IN FAVOUR OF THE ASSESSEE, IS REQUIRED TO BE ADOPTED IN THIS CAS E. ACCORDINGLY I HOLD THAT THE INTEREST INCOME EARNED BY THE ASSESSEE FROM CO-OPER ATIVE BANKS, WHICH ARE BASICALLY COOPERATIVE SOCIETIES CARRYING ON BANKING BUSINESS, IS DEDUCTIBLE U/S 80P(2)(D) OF THE ACT. ON THIS REASONING, I UPHO LD THE DECISION TAKEN BY LD CIT(A) IN BOTH THE YEARS ON THIS ISSUE. 4. FACTS BEING IDENTICAL, WE FOLLOW THE ABOVE ORDER OF THE CO-ORDINATE BENCH AND SET-ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO ITA 5859/MUM/2018 ROHIT CHAMBERS PRE MISES CO-OP. SOCIETY LTD 4 ALLOW DEDUCTION TO THE INTEREST EARNED FROM CO-OPER ATIVE BANKS BY THE ASSESSEE U/S.80P(2)(D) OF THE ACT. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.10.2019 SD/- SD/- (C.N.PRASAD) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUN TANT MEMBER MUMBAI; DATED: 25/10/2019 SUBHANKAR SAMANTA, P.S (ON TOUR) 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// (ASSISTANT REGISTRAR) ITAT, MUMBAI