ASST CIT 31(3), MUMBAI V. THE JAWAHAR NAGAR CO OPERATIVE HOUSING SOCIETY LTD, MUMBAI

ITA 6252/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0058 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 21-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 6252/MUM/2016 (ASSESSMENT YEAR 2013-14) ITA NO. 6253/MUM/2016 (ASSESSMENT YEAR 2012-13) THE ASSTT. COMMISSIONER OF INCOME TAX-31(3), ROOM NO.110, 1 ST FLOOR, C-13,BANDRA KURLA COMPLEX, MUMBAI 400 051 ...... APPELLANT VS. M/S. THE JAWAHAR NAGAR CO-OPERATIVE HOUSING SOCIETY LTD., 27,JAWAHAR NAGAR, S.V.ROAD, GOREGAON WEST,MUMBAI 400062 PAN:AAABT0006F .... RESPONDENT APPELLANT BY : SHRI SUMAN KUMAR RESPONDENT BY : NONE DATE OF HEARING : 26/02/2018 DATE OF PRONOUNCEMENT : 28/02/2018 ORDER PER G.S.PANNU,A.M: THESE TWO APPEALS ARE FILED BY THE REVENUE RELATI NG TO THE SAME ASSESSEE FOR ASSESSMENT YEARS 2012-13 AND 2013-14 A ND SINCE THEY INVOLVE COMMON ISSUE, THEY HAVE BEEN CLUBBED AND HEARD TOGE THER AND A CONSOLIDATED ORDER IS ORDER IS BEING PASSED FOR THE SAKE OF CONV ENIENCE AND BREVITY. 2 ITA NO. 6252/MUM/2016 (ASSESSMENT YEAR 2013-14) ITA NO. 6253/MUM/2016 (ASSESSMENT YEAR 2012-13) 2. IN BOTH APPEALS, THE SUBSTANTIVE GRIEVANCE OF THE REVENUE IS THAT CIT(A) HAS ERRED IN ALLOWING THE ASSESSEE BENEFIT OF EXEM PTION UNDER SECTION 80P(2)(D) OF THE ACT DESPITE THE PROVISIONS OF SEC TION 80P(4) OF THE ACT. SINCE THE FACTS AND CIRCUMSTANCES IN BOTH APPEALS ARE IDE NTICAL, WE MAY TAKE UP THE APPEAL IN ITA NO.6253/MUM/2016 FOR ASSESSMENT YEAR 2012-13 AS THE LEAD CASE WHICH IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-42, MUMBAI DATED 28/07/2016, WHICH IN TURN ARISES OUT OF AN ORDER P ASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 23/03/2015. THE GROUNDS OF APPEAL RAISED B Y THE REVENUE READ AS UNDER:- 1)ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR BENEFIT U/S 80P(2)(D) DESPITE THE FACT THAT AS PER THE PROVISIO NS OF SECTION 80P(4) WHICH STIPULATE THAT: THE PROVISION OF THIS SECTION SHALL NOT APPLY IN R ELATION TO ANY CO- OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CR EDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOP MENT BANK AND THE INTEREST INCOME RECEIVED BY THE ASSESSEE IS FROM CO-OPERATIVE BANK. 3. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE RES PONDENT ASSESSEE IS A CO- OPERATIVE HOUSING SOCIETY AND FOR THE ASSESSMENT YE AR 2012-13 IT FILED A RETURN OF INCOME DECLARING NIL INCOME. THE ASSESSING OF FICER NOTED THAT ASSESSEE HAD EARNED AN INCOME OF RS.61,80,271/- IN THE FORM OF INTEREST FROM THE INVESTMENT MADE IN CO-OPERATIVE BANK, WHICH WAS CLA IMED AS EXEMPT UNDER SECTION 80P(2)(D) OF THE ACT. THE ASSESSING OFFICE R REFERRED TO THE PROVISIONS OF SECTION 80P(4) OF THE ACT AND DENIED THE EXEMPTION CLAIMED UNDER SECTION 80P(2)(D) OF THE ACT. THIS ASPECT OF THE CONTROVE RSY HAS BEEN DECIDED BY THE CIT(A) IN FAVOUR OF THE ASSESSEE AND HE HAS, INTER- ALIA, RELIED UPON THE 3 ITA NO. 6252/MUM/2016 (ASSESSMENT YEAR 2013-14) ITA NO. 6253/MUM/2016 (ASSESSMENT YEAR 2012-13) JUDGMENTS OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. JAFARI MOMIN VIKAS CO-OPERATIVE CREDIT SOCIETY LTD. 362 ITR 331 (GUJ) AND THAT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS SHRI BILUR GURUBASAVA PATTIN SAHAKARI SANGH NIYAMIT, BAGALKOT, 369 ITR 86(KAR). AS PER THE CIT(A) CO- OPERATIVE BANKS ARE ONLY A SPECIES OF CO-OPERATI VE SOCIETIES AND, THEREFORE, IN VIEW OF THE SPECIFIC PROVISIONS OF SECTION 80P(2 )(D) OF THE ACT, INTEREST INCOME EARNED BY THE ASSESSEE FROM SUCH ENTITIES IS ELIGIBLE FOR EXEMPTION AND SINCE ASSESSEE WAS NOT A CO-OPERATIVE BANK BY ITSEL F, RESTRICTION CONTAINED IN SECTION 80P(4) OF THE ACT WOULD NOT APPLY. AGAINST SUCH A DECISION, REVENUE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING THE LD. DEPARTMENTAL REPR ESENTATIVE REITERATED THE STAND OF THE ASSESSING OFFICER, WHILE WRITTEN S UBMISSIONS HAVE BEEN FURNISHED ON BEHALF OF THE RESPONDENT ASSESSEE. SE CTION 80P(2)(D) OF THE ACT PRESCRIBES COMPLETE EXEMPTION IN RESPECT OF ANY I NCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY THE CO-OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER COOPERATIVE SOCIETY. FURTHERMORE, SECTION 80P(4) OF THE ACT PRESCRIBES THAT THE PROVISIONS OF THIS SECTION SHALL NOT APP LY IN RELATION TO ANY CO- OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CR EDIT SOCIETY OR A PRIMARY CO- OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. THE SAID RESTRICTION ENSHRINED IN SECTION 80P(4) OF THE ACT HAS BEEN INV OKED BY THE ASSESSING OFFICER IN THE PRESENT CASE. OSTENSIBLY, SO FAR AS THE ASSESSEE IS CONCERNED, IT IS A CO-OPERATIVE HOUSING SOCIETY AND IS NOT ENGAGED I N THE BUSINESS OF BANKING AND, THEREFORE, IT DOES NOT FALL WITHIN THE SCOPE O F THE RESTRICTION PLACED BY SECTION 80P(4) OF THE ACT. THE CASE OF THE ASSESSI NG OFFICER IS THAT THE INCOME PAYING ENTITY IS A CO-OPERATIVE BANK AND, THEREFORE , INTEREST INCOME PAID BY IT TO THE ASSESSEE SOCIETY IS CAUGHT BY THE MISCHIEF O F SECTION 80P(4) OF THE ACT. 4 ITA NO. 6252/MUM/2016 (ASSESSMENT YEAR 2013-14) ITA NO. 6253/MUM/2016 (ASSESSMENT YEAR 2012-13) IN OUR CONSIDERED OPINION, THE SAID STAND OF THE AS SESSING OFFICER IS GROSSLY ERRONEOUS, INASMUCH AS, THE RESTRICTION CONTAINED I N SECTION 80P(4) IS IN RELATION TO THE PERSON CLAIMING EXEMPTION UNDER SEC TION 80P OF THE ACT, WHICH IN THE PRESENT CASE IS NOT THE PAYEE-CO-OPERATIVE BANK. THEREFORE, IN OUR VIEW, THE CIT(A) CORRECTLY HELD THAT THOUGH THE BANKS BY THEMSELVES ARE NOT PERMITTED TO CLAIM THE BENEFIT OF DEDUCTION U/S.80P OF THE ACT BUT THE OTHER CO- OPERATIVE SOCIETIES CAN CLAIM DEDUCTION U/S.80P(2)( D) IN RESPECT OF THE INTEREST OR DIVIDEND, AS THE CASE MAY BE RECEIVED FROM THE C O-OPERATIVE BANKS . THE SAID DECISION OF THE CIT(A) IS HEREBY AFFIRMED, THE REFORE, REVENUE FAILS IN ITS GROUNDS OF APPEAL. ITA NO.6252/MUM/2016: 5. AT THE TIME OF HEARING, IT WAS A COMMON POINT BE TWEEN THE PARTIES THAT SO FAR AS APPEAL FOR THE ASSESSMENT YEAR 2013-14 IS CONCERNED, THE ISSUE RAISED IS SIMILAR TO THE GROUNDS OF APPEAL DEALT WITH BY US IN THE APPEAL FOR ASSESSMENT YEAR 2012-13. AS A CONSEQUENCE, OUR DEC ISION IN APPEAL FOR ASSESSMENT YEAR 2012-13 SHALL APPLY MUTATIS MUTANDIS IN THE APPEAL FOR ASSESSMENT YEAR 2013-14 ALSO. 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 28/02/201 8 SD/- SD/- (SANDEEP GOSAIN) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 28/02/2018 VM , SR. PS 5 ITA NO. 6252/MUM/2016 (ASSESSMENT YEAR 2013-14) ITA NO. 6253/MUM/2016 (ASSESSMENT YEAR 2012-13) 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