ITO 20(2)(2), MUMBAI V. MAZGAON DOCK EMPLOYEES CO OP CREDIT SOCIETY LTD, MUMBAI

ITA 644/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6777 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2013-2014
• Appeal Filed On: 30-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI DR. A.L. SAINI , ACCOUNTANT MEMBER ITA NO. 6 44 / MUM . /2017 ( ASSESSMENT YEAR : 20 13 14 ) INCOME TAX OFFICER WARD 20(2)(2), MUMBAI . APPELLANT V/S M/S. MAZGAON DOCK EMPLOYEES CO. OP. CREDIT SOCIETY LTD. , GROUND FLOOR MAZGAON DOCK LTD., DOCK YARD ROAD MAZGAON, MUMBAI 400 010 PAN AAAAM5070F . RESPONDENT REVENUE BY : SHRI SAURABH KUMAR RAI ASSESSEE BY : SHRI KEDAR PHADKE DATE OF HEARING 1 9 .0 6 .2018 DATE OF ORDER 27.06.2018 O R D E R PER SAKTIJIT DEY, J.M. THE REVENUE HAS FILED THE AFORESAID APPEAL AGAINST ORDER DATED 3 RD NOVEMBER 2016, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 32, MUMBAI, BEING AGGRIEVED WITH HIS DECISION IN ALLOWING ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) FOR THE ASSESSMENT YEAR 2010 1 1. 2 M/S. MAZGAON DOCK EMPLOYEES CO. OP. CREDIT SOCIETY LTD. 2 . BRIEF FACTS ARE, THE ASSESSEE A CREDIT CO OPERATIVE SOCIETY FILED ITS RETURN OF INCOME ON 27 TH SEPTEMBER 2013, DECLARING NIL INCOME AFTER CLAIMING DEDUCTION FOR AN AMOUNT OF ` 1,31,46,733, UNDER SECTION 80P(2)(A)(I) OF THE ACT. DURING THE ASSESSMENT PR OCEEDINGS, THE ASSESSING OFFICER AFTER VERIFYING THE MATERIAL ON RECORD FOUND THAT THE MAIN OBJECT OF THE ASSESSEE IS TO PROVIDE CREDIT / LOANS TO ITS MEMBERS AND COLLECT DEPOSITS FROM ITS MEMBERS BY WAY OF FIXED DEPOSIT, SAVING DEPOSIT AND DAILY RECURRING DEPOSITS, ETC. HE ALSO NOTICED THAT THE ASSESSEE HAS RECEIVED INTEREST ON LOAN TO THE TUNE OF ` 5,20,58,907 AND THOSE FROM VARIOUS BANKS ARE TO THE TUNE OF ` 2,56,99,691. THEREFORE, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO JUSTIFY ITS CLAIM OF DE DUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. IN RESPONSE, IT WAS SUBMITTED BY THE ASSESSEE THAT THE PRIMARY OBJECT OF THE ASSESSEE IS TO PROVIDE CREDIT FACILITIES TO ITS MEMBERS ONLY, HENCE, IT IS ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. IT WAS SUBMITTED , SINCE , THE ASSESSEE IS NEITHER A STATE CO OPERATIVE OR ANY OTHER CO OPERATIVE BANK, IT DOES NOT REQUIRE A BANKING INCENSE UNDER THE BANKING REGULATION ACT TO CONDUCT ITS FUNCTION. THEREFORE, THE PROVISIONS OF SECTION 80P(4) OF T HE ACT DO NOT APPLY. THE ASSESSING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE. HE CONCLUDED THAT DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT IN CASE OF A CO OPERATIVE CREDIT SOCIETY ENGAGED IN BANKING ACTIVITY HAS BEEN 3 M/S. MAZGAON DOCK EMPLOYEES CO. OP. CREDIT SOCIETY LTD. WITHDRAWN FROM ASSESSMENT YEAR 2007 08 EXCEPT IN CASE OF A PRIMARILY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. REFERRING TO THE PROVISIONS OF SECTION 80P(4) OF THE ACT AND SECTION 56 OF THE BANKING REGULATION ACT, 194 9 HE OBSERVED THAT THE PRIMARY OBJECT OF THE ASSESSEE IS TO ENGAGE IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE BYLAWS OF THE SOCIETY DO NOT PERMIT ADMISSION OF ANY OTHER CO OPERATIVE AS MEMBER. THUS, HE HELD THAT THE ASSESSEE CAN BE TREATED AS A PRIMARY CO OPERATIVE BANK, HENCE, THE PROVISIONS OF SECTION 80P(4) OF THE ACT WILL BE APPLICABLE TO THE ASSESSEE. THAT BEING THE CASE, THE ASSESSEE WOULD NOT BE ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. ACCORDINGLY , HE DISALLOWED ASSESSEES CLAIM OF DEDUCTION. BEING AGGRIEVED WITH THE AFORESAID DECISION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3 . THE LEARNED COMMISSIONER (APPEALS) TAKING NOTE OF THE FACT THAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010 11, THE TRIBUNAL HAS ALLOWED THE DEDUCTION CLAIMED UNDER SECTION 80P(2)(A)(I) OF THE ACT , ACCEPTED ASSESSEES CLAIM. 4 . AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE ISSUE IN DISPUTE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ASSESSMENT YEAR 2010 11 AND 2012 13. A COPY OF THE 4 M/S. MAZGAON DOCK EMPLOYEES CO. OP. CREDIT SOCIETY LTD. ORDER PASSED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2012 13 IN ITA NO.3048/MUM./2016, DATED 28 T H FEBRUARY 2018, WAS ALSO PLACED BEFORE THE BENCH. 5 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY SUBMITTED THAT IN THE PRECEDING ASSESSMENT YEAR S THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 6 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERU SED MATERIALS ON RECORD. AS COULD BE SEEN, THE ISSUE RELATING TO ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT IS A RECURRING DISPUTE BETWEEN THE ASSESSEE AND THE DEPARTMENT FROM THE PRECEDING ASSESSMENT YEAR S. I N FACT , LEARNED COMMIS SIONER (APPEALS) RELYING UPON THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010 11 HAS ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. ON A PERUSAL OF ORDER DATED 28 TH FEBRUARY 2018 OF THE CO ORDINATE BENCH PASSED IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2012 13 (SUPRA), IT IS NOTICED THAT BY FOLLOWING ITS OWN ORDER IN ASSESSEES CASE FOR ASSESSMENT YEAR 2010 11, THE TRIBUNAL HAS ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. THERE BEING NO DIFFERENCE IN FACTS BETWEEN THE ASSESSMENT YEAR 2010 11 AND 2012 13 AND THE IMPUGNED ASSESSMENT YEAR BROUGHT TO OUR NOTICE BY THE DEPARTMENT, 5 M/S. MAZGAON DOCK EMPLOYEES CO. OP. CREDIT SOCIETY LTD. RESPECTFULLY FOLLOWING THE DECISION OF THE CO ORDINATE BENCH IN ASSESSEES OWN CASE , AS REFER RED TO ABOVE, WE UPHOLD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE BY DISMISSING THE GROUNDS RAISED. 7 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.06.2018 SD/ - DR. A.L. SAINI ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 27.06.2018 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI