TURF VIEW CO-OP.HSG.SOC.LTD, MUMBAI V. ITO 18(1)(2), MUMBAI

ITA 6309/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79162 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 22-05-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 13-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRI MAURYA PRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM ./ I.T.A. NO. 6309/MUM/2011 ( / ASSESSMENT YEAR: 2003-04) TURF VIEW CO-OP. HSG. SOC. LTD. PLOT NO. 72B, HORNBY VELLARD ESTATE, DR. A. B. ROAD, WORLI, MUMBAI-400 018 / VS. I.T.O. 18(1)(2), MUMBAI ' ./# ./PAN/GIR NO. AAAAT 4887 B ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) '$ ' ( / APPELLANT BY : SHRI NITISH GANDHI %&'$ ' ( / RESPONDENT BY : SHRI MAURYA PRATAP )* + ' , / DATE OF HEARING : 22.05.2014 -./ ' , / DATE OF PRONOUNCEMENT : 18.06.2014 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE AGITATING THE ORD ER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-29, MUMBAI (CIT(A) FOR SHORT ) DATED 25.04.2011, DISMISSING THE LEVY OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT , 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2003-04 VIDE ORDER DATED 24 .03.2009. 2. THE BACKGROUND FACTS OF THE CASE ARE THAT THE AS SESSEE, A CO-OPERATIVE HOUSING SOCIETYS, INCOME AND EXPENDITURE (I & E) ACCOUNT F OR THE RELEVANT YEAR WAS OBSERVED TO BEAR A CREDIT OF RS.4,01,476/- BY WAY OF INTEREST O N BANK FIXED DEPOSIT/S (FD/S). THE ASSESSEE, THUS, IN THE VIEW OF THE ASSESSING OFFICE R (A.O.), HAD CLAIMED REGULAR 2 ITA NO. 6309/MUM/2011 (A.Y. 2003-04) TURF VIEW CO-OP. HSG. SOC. LTD. VS. ITO EXPENDITURE OF THE SOCIETY AGAINST THE SAID INCOME, WHICH IS IMPERMISSIBLE IN VIEW OF SECTION 57(III), CITING THE DECISION BY THE APEX CO URT IN THE CASE OF CIT VS. DR. V. P. GOPINATH [2001] 248 ITR 449 (SC) IN SUPPORT. FURTHER, IT HAD ALSO CLAIMED DEDUCTION U/S. 80P(2)(D) THERE-AGAINST AND, THUS, CLAIMED A DOUBLE DEDUCTION IN RESPECT OF THE SAID INCOME. INCOME WAS, ACCORDINGLY, ASSESSED AT RS.32, 03,407/-, AS AGAINST THE RETURNED INCOME OF RS.7,13,561/-; THE OTHER TWO ADJUSTMENTS MADE BY THE A.O. BEING TOWARD INTEREST ON, SIMILARLY, INCOME-TAX REFUND (AT RS.26 ,070/-) AND MAINTENANCE CHARGES (AT RS.20,62,300/-) RECEIVED FROM MOBILE COMPANIES (FOR ALLOWING THEM TO USE THE TERRACE SPACE OF THE SOCIETYS BUILDING, FOR SETTING UP THE MOBILE RELAY STATION/S), BY TREATING IT AS INCOME FROM OTHER SOURCES AS AGAINST INCOME FROM HOUSE PROPERTY. PENALTY PROCEEDINGS WERE ALSO INITIATED. THE ASSESSEE FAILI NG TO FURNISH ANY EXPLANATION, PENALTY STOOD LEVIED AT RS.7,81,153/-, I.E., AT 100% OF THE TAX SOUGHT TO BE EVADED. WE ARE PRESENTLY CONCERNED WITH THE BANK INTEREST OF RS.4, 01,476/-, ON WHICH PENALTY STOOD CONFIRMED BY THE FIRST APPELLATE AUTHORITY, SO THAT THE ASSESSEE IS IN SECOND APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WE ARE WHOLLY UNABLE TO APPRECIATE THE REVENUES CASE (PB PG. 2). THE ASSESSEES INCOME AND EXPENDITURE ACCOUNT SHOWS A NET SURPLUS OF RS.7.55 LACS. AS SUCH, EXCLUDING BANK INTEREST AND INTEREST ON INCOME-TAX REFUND, WHICH AGGREGATE TO RS.4.28 LACS, WOULD STILL LEAVE A POSITIVE INCOME OF RS.3.27 LACS. HOW, THEN, WE WONDER COULD IT BE SAID THAT THE ASSE SSEE HAD CLAIMED THE REGULAR SOCIETY EXPENSES AGAINST BA NK INTEREST, IN GROSS VIOLATION OF SECTION 57(III) ? AS REGARDS DEDUCTION U/S.80P(2)(D), THE BANK INTE REST IS ONLY ON FDRS PLACED WITH THE CO-OPERATIVE BANKS, WHICH ARE ONLY CO-OPERATIVE SOCIETIES ENGAGED IN THE BUSINESS OF BANKING, SO THAT THE SAME IS EXIGIBLE T O DEDUCTION U/S.80P(2)(D). DEDUCTION THERE-UNDER STANDS IN FACT ALLOWED BY THE A.O. HIMS ELF IN ASSESSMENT. WHAT, THEN, IS THE CONTROVERSY ABOUT ? RATHER, WE OBSERVE THE ASSESSEE TO HAVE CLAIMED I NTEREST ON SINKING FUND (AT RS.1,57,181/-) PER ITS INCOME AND EXPENDIT URE ACCOUNT, AND WHICH MAY LEAD TO THE INFERENCE OF THE INTEREST INCOME BEING ACTUALLY LESS AND, ACCORDINGLY, AN EXCESS CLAIM FOR DEDUCTION U/S.80P(2)(D). HOWEVER, AS AFORE-STAT ED, THE A.O. HAS HIMSELF ALLOWED 3 ITA NO. 6309/MUM/2011 (A.Y. 2003-04) TURF VIEW CO-OP. HSG. SOC. LTD. VS. ITO DEDUCTION U/S.80P(2)(D) AT RS.4,01,476/-. FURTHER, THE LD. AUTHORIZED REPRESENTATIVE (AR), WITH REFERENCE TO THE ASSESSEES COMPUTATION OF INCOME FOR THE YEAR (PB PG.1), WOULD SHOW US THAT THE INTEREST ON SINKING FUND STA NDS IN FACT SUO MOTU DISALLOWED BY THE ASSESSEE, RESULTING IN EFFECT TO A LOWER CLAIM AND ALLOWANCE OF DEDUCTION U/S.80P(2)(D), I.E., TO THAT EXTENT. IN FACT, WE ALSO OBSERVE NON- CLAIM OF ANY STANDARD DEDUCTION ON THE RENTAL INCOME OF RS.20.62 LACS, SO THAT THE CHANGE OF HEAD OF INCOME IN ITS RESPECT BY THE A.O. ALSO DID NOT RESULT IN ANY CHANGE IN INCOME. T HE ASSESSEE HAS RETURNED A TAXABLE INCOME, PAYING TAX AT RS.2,21,621/-. THE CHARGE OF CLAIM OF MUTUALITY BY THE ASSESSEE, AS MADE BY THE LD. CIT(A), AND WHICH FORMS THE BASIS O F HIS CONFIRMING THE PENALTY, IS THUS UNTRUE. LOOKED AT FROM ANY ANGLE, THUS, THE REVENUE S CASE IS WITHOUT ANY MERIT. THE LEVY OF IMPUGNED PENALTY IS ACCORDINGLY DIRECTED FO R DELETION. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. 0/ 1 )2 30 ' * 4 ' 56 ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 18, 2014 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 7+ MUMBAI; 8) DATED : 18.06.2014 *.)../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %& '$ / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. ;*< = %)>2 , , >2/ , 7+ / DR, ITAT, MUMBAI 6. = ?3 @ + / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , 7+ / ITAT, MUMBAI