AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO OP CREDIT SOCIETY LTD, MUMBAI V. ITO WD 15(3)(3), MUMBAI

ITA 6461/MUM/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9685 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 21-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTALDR
• Keywords: Business income; Question of law
• Section: 143(3); 260A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.6461/MUM/2014 ASSESSMENT YEAR: 2010-11 AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. A-11/16, NEW QUARTERS, BOMANWADA, VILE PARLE (E), MUMBAI-400099 / VS. INCOME TAX OFFICER-15(3)(3), MUMBAI ( /ASSESSEE) ( ! / REVENUE) PAN. NO. AABTA2530N / ASSESSEE BY WRITTEN SUBMISSION ! / REVENUE BY SHRI RAJAT MITTAL-DR ' !# $ % / DATE OF HEARING : 28/03/2018 $ % / DATE OF ORDER: 28/03/2018 AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 16/06/2014 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI, WITH RESPECT TO DETERMINE THE INTEREST EARN ED BY THE ASSESSEE AMOUNTING TO RS.10,14,162/- ON THE INVESTMENT IN THE BANK FDRS WITH SCHEDULED/COOPERAT IVE BANKS AS INCOME FROM OTHER SOURCES WITHOUT CONSIDER ING THE PROVISIONS OF SECTION 80P OF THE INCOME TAX ACT , 1961 (HEREINAFTER THE ACT). 2. DURING HEARING, NONE WAS PRESENT FOR THE ASSESSEE, IN SPITE OF RECEIPT OF REGISTERED AD NOTI CE. HOWEVER, THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS BY CONTENDING THAT THE APPEAL OF THE ASSESSEE MAY BE DECIDED ON THE BASIS OF WRITTEN SUBMISSIONS. THE ASSESSEE HAS FILED A COPY OF THE ORDER OF THE TRIBU NAL IN THE CASE OF SEA GREAN COOPERATIVE HOUSING VS INCOME TAX OFFICER (ITA NO.1343/MUM/2017), ORDER DATED 31/03/2017 BY CLAIMING THAT THE IMPUGNED ISSUE IS COVERED BY THIS ORDER OF THE TRIBUNAL. ON THE OTHER HAND, AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 3 THE LD. DR, SHRI RAJAT MITTAL, DEFENDED THE IMPUGNE D ORDER BY INVITING OUR ATTENTION TO THE FINDING OF T HE LD. COMMISSIONER OF INCOME TAX (APPEAL). THE CRUX OF TH E ARGUMENT IS IN SUPPORT OF THE ADDITION. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION FROM THE AFORESAID ORDER OF THE TRIBUNAL DATED 31/03/2017 FOR READY REFERENCE AND ANALYSIS:- THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAIN ING TO ASSESSMENT YEAR 2013-14 IS DIRECTED AGAINST AN ORDE R PASSED BY CIT(A)-33,MUMBAI DATED 10/02/2017, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSIN G OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT), DATED 18/01/2016. 2. THE GROUND OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER:- 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE A ND IN LAW, THE HON. CIT(A) HAS ERRED IN UPHOLDING THAT THE APP ELLANT IS NOT ELIGIBLE FOR DEDUCTION U/S. SOP(2)(D) OF THE I. T.ACT,1961 AT RS.27,41,747/- RELYING ON THE DECISIONS OF THE H ON. ITAT, AHMEDABAD IN THE CASE OF SBI EMPLOYEES COOPERATIVE CREDIT SOCIETY LTD. (2015) 57 TAXMAN.COM 367 AND TH E HON. ITAT, MUMBAI BENCH IN THE CASE OF SHRI SAIDATTA COOPERATIVE CREDIT SOCIETY LTD. VS. ITO IN ITA AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 4 NO.2379/MUM/2015 WITHOUT APPRECIATING THAT THE HON. ITAT, A- BENCH, MUMBAI IN THE CASE OF LANDS END COOPERATIVE HOUSING SOCIETY LTD. IN ITA NO.3566MUM/2014, WHEREIN ON AN IDENTICAL ISSUE I.E. CLAIM OF DEDUCTION U/S.SOP(2)(D) OF THE ACT IN RESPECT OF INTEREST ON FIXED DEPOSIT WITH COOPERATIVE BANKS WAS INVOLVE D, HAS HELD THAT THE ASSESSE IS ENTITLED TO THE DEDUCTION FOR INTEREST DERIVED BY IT ON DEPOSITS WITH COOPERATIVE BANKS.' 2.1 BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE AP PELLANT IS A CO-OPERATIVE HOUSING SOCIETY, WHICH HAD, INTER-ALIA , EARNED AN INTEREST INCOME OF RS.27,41,747/-,ON WHICH DEDUC TION UNDER SECTION80P OF THE ACT WAS DENIED. THE CLAIM O F THE ASSESSEE WAS THAT THE SAID INTEREST IS EARNED ON DE POSITS WITH A CO-OPERATIVE BANK AND, THEREFORE, IT WAS ELI GIBLE FOR THE BENEFITS OF SECTION 80P(2)(D) OF THE ACT. THE A SSESSING OFFICER AS WELL AS CIT(A) HOWEVER, DENIED THE EXEMP TION ON THE GROUND THAT THE PROVISIONS OF SECTION 80P(2)(D) OF THE ACT RESTRICT THE EXEMPTION TO THE INTEREST EARNED F ROM ANY OTHER CO-OPERATIVE SOCIETY, WHEREAS THE IMPUGNED I NTEREST INCOME WAS EARNED FROM A CO-OPERATIVE BANK. 3. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE POINTED OUT THAT THE CLAIM OF EXEMPTION HAS BEEN DENIED BY THE LOWER AUTHORITIES ON A WRONG BASIS INASMUCH AS EVEN INTER EST EARNED FROM A CO-OPERATIVE BANK IS COVERED WITHIN T HE SCOPE OF SECTION 80P(2)(D)OF THE ACT, BECAUSE EVEN A CO- OPERATIVE BANK IS ESSENTIALLY A CO-OPERATIVE SOCIET Y. IN THIS CONTEXT, HE HAS RELIED UPON THE DECISION OF THE MUM BAI TRIBUNAL IN THE CASE OF LANDS END CO-OPERATIVE HOUS ING SOCIETY LTD. VS. ITO IN ITA NO.2379/MUM/2015 DATED 15/01/2016, WHEREIN INTEREST EARNED BY A CO-OPERATI VE HOUSING SOCIETY ON INVESTMENT WITH A CO-OPERATIVE B ANK HAS BEEN HELD TO BE ELIGIBLE FOR EXEMPTION UNDER SECTION80P(2)(D) OF THE ACT . BY REFERRING TO THE D ISCUSSION MADE BY THE TRIBUNAL, THE LD. REPRESENTATIVE FOR TH E AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 5 ASSESSEE POINTED OUT THAT EVEN THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF TOTAGARS COOPERATIVE SALES SOCIETY LTD. VS. ITO,322ITR 283(SC) HAS BEEN CONSID ERED. 4. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE POINTED OUT THAT THE DECISION OF THE SMC BENCH OF M UMBAI TRIBUNAL IN THE CASE OF SHRI SAIDATTA COOPERATIVE C REDIT SOCIETY LTD. VS.ITO IN ITA NO. 2379/MUM/2015DATED 15/1/2016(SUPRA)IS TO THE CONTRARY AND, THEREFORE, THE CIT(A) WAS JUSTIFIED IN DENYING THE CLAIM FOR EXEMP TION UNDER SECTION 80P(2)(D) OF THE ACT. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE FACTS LIE IN A NARROW COMPASS, INASMUCH AS, THE APP ELLANT IS A CO-OPERATIVE SOCIETY, WHOSE INCOME , INTER-ALIA, INCLUDED INTEREST EARNED ON DEPOSITS WITH ANOTHER COOPERATIV E BANK. ACCORDINGLY, SUCH INCOME WAS CLAIMED AS EXEMPT UNDE R SECTION 80P(2)(D) OF THE ACT. THE CLAIM HAS BEEN DE NIED PRIMARILY ON ACCOUNT OF THE FACT THAT SECTION 80P(2 )(D) OF THE ACT RELATES TO THE INCOME EARNED FROM A CO-OPERATIV E SOCIETY. IN THIS CONTEXT, THE DECISION OF THE MUMBA I TRIBUNAL IN THE CASE OF LANDS END CO-OPERATIVE HOUSING SOCIE TY LTD. (SUPRA) IS RENDERED UNDER IDENTICAL CIRCUMSTANCES A ND THE FOLLOWING DISCUSSION IS RELEVANT:- 8.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. WE FIND THAT THE CIT(A) ENHANCE D THE INCOME OF THE ASSESSEE BY REJECTING THE DEDUCTION U /S 80P(2)(D) OF THE ACT OF RS.14,88,107/- BEING INTERE ST ON INVESTMENT WITH OTHER COOP. BANKS BY FOLLOWING THE DECISION IN THE CASE OF BANDRA SAMRUDDIHI CO-OPERATIVE HOUSI NG SOCIETY LTD.(SUPRA) WHICH WAS PASSED ON THE BASIS O F THE DECISION PASSED BY THE HONBLE SUPREME COURT IN THE CASE OF TOTAGARS COOPERATIVE SALE SOCIETY LTD. IN THE C ASE OF TOTAGARS CO-OPERATIVE SALE SOCIETY LTD V/S ITAT (S UPRA) THE HONBLE SUPREME COURT WHILE INTERPRETING THE SE CTION AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 6 80P(2)(A)(I) OF THE ACT HELD THAT SURPLUS FUNDS NOT IMMEDIATELY REQUIRED IN THE BUSINESS AND INVESTED I N THE SHORT TERM DEPOSIT WOULD BE ASSESSABLE UNDER THE HE AD INCOME FROM OTHER SOURCES WHERE THE COOPERATIVE S OCIETY IS ENGAGED IN CARRYING ON BUSINESS OF BANKING OR PR OVIDING CREDIT FACILITIES TO ITS MEMBERS AND CONSEQUENTLY N O DEDUCTION IS ALLOWABLE U/S 80P(2)(A)(I) OF THE ACT. WHEREAS IN THE CASE BEFORE US THE ISSUE IS WHETHER A CO-OPE RATIVE SOCIETY WHICH HAS DERIVED INCOME ON INVESTMENT WITH COOPERATIVE BANKS IS ENTITLED TO DEDUCTION U/S 80P( 2)(D). THE PROVISIONS OF SECTION 80P(2)(D) OF THE ACT PROV IDE DEDUCTION IN RESPECT OF INCOME BY WAY OF INTEREST O R DIVIDEND ON INVESTMENTS MADE WITH OTHER COOPERATIVE SOCIETY. FOR THE PURPOSES OF BETTER PROPER UNDERSTA NDING OF THESE TWO PROVISIONS THE RELEVANT EXTRACT OF THE SE CTION ARE REPRODUCED BELOW: 80P: DEDUCTION IN RESPECT OF INCO ME OF CO-OPERATIVE SOCIETIES. 1. WHERE, IN THE CASE OF AN ASSESSSEE BEING A CO-OP ERATIVE SOCIETY, THE GROSS TOTAL INCOME, INCLUDES ANY INCOM E REFERRED TO IN SUB-SECTION (2), THERE SHALL BE DEDU CTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF TH IS SECTION, THE SUMS SPECIFIED IN SUB-SECTION (2), IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. 2. THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL BE THE FOLLOWING, NAMELY:- (A)IN THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED IN (I) CARRYING ON THE BUSINESS OF BANKING OR PROVIDIN G CREDIT FACILITIES TO ITS MEMBERS. THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUS INESS ATTRIBUTABLE TO ANY ONE OR MORE OF MUCH ATTRIBUTES. AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 7 (D)IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR D IVIDENDS DERIVED BY THE CO-OPERATIVE SOCIETY FROM ITS INVEST MENTS WITH ANY OTHER CO-OPERATIVE SOCIETY, THE WHOLE OF SUCH I NCOME. FROM THE CLOSE PERUSAL OF THE PROVISIONS OF U/S 80P (2)(A)(I) AND 80P(2)(D) IT IS CLEAR THAT THE FORMER DEALS WIT H DEDUCTION IN RESPECT OF PROFITS AND GAIN OF BUSINES S IN CASE OF THE CO-OPERATIVE SOCIETY CARRYING ON BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS IF TH E SAID INCOME IS ASSESSABLE AS INCOME FROM BUSINESS WHEREA S LATTER PROVIDES FOR DEDUCTION IN RESPECT OF INCOME BY WAY INTEREST AND DIVIDEND DERIVED BY ASSESSEE FROM ITS INVESTMENTS WITH OTHER COOPERATIVE SOCIETY. THUS IT IS AMPLY CLEAR THAT A COOPERATIVE SOCIETY CAN ONLY AVA IL DEDUCTION U/S 80P(2)(D)(I) IN RESPECT OF ITS INCOME ASSESSABLE AS BUSINESS INCOME AND NOT AS INCOME FRO M OTHER SOURCES IF IT CARRIES ON BUSINESS OF THE BANK ING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND HAS INCOME ASSESSABLE UNDER THE HEAD BUSINESS WHEREAS FOR CLAI MING U/S 80P(2)(D) IT MUST HAVE INCOME OF INTEREST AND D IVIDEND ON INVESTMENTS WITH OTHER CO-OPERATIVE SOCIETY MAY OR MAY NOT BE ENGAGED IN THE BANKING FOR PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND THE HEAD UNDER WHICH THE INCOME IS ASSESSABLE IS NOT MATERIAL FOR THE CLAIM OF DEDUCTION UNDER THIS SECTION. NOW WILL EVALUATE THE ASSESSEES CASE IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT. THE HON'BLE SUPREME COURT IN THE CAS E OF TOTAGARS CO-OPERATIVE SALE SOCIETY LTD.(SUPRA) HEL D THAT A SOCIETY HAS SURPLUS FUNDS WHICH ARE INVESTED IN SHO RT TERM DEPOSITS WHERE THE SOCIETY IS ENGAGED IN THE BUSINE SS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBE RS IN THAT CASE THE SAID INCOME FROM SHORT TERM DEPOSITS SHAL L BE TREATED AND ASSESSED AS INCOME FROM OTHER SOURCES A ND DEDUCTION U/S 80(P)(2)(A)(I) WOULD NOT BE AVAILABLE MEANING THEREBY THAT DEDUCTION U/S 80(P)(2)(A)(I) IS AVAILA BLE ONLY IN RESPECT OF INCOME WHICH IS ASSESSABLE AS BUSINESS I NCOME AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 8 AND NOT AS INCOME FROM OTHER SOURCES. WHEREAS IN DISTINCTION TO THIS , THE PROVISIONS OF SECTION 80( P)(2)(D) OF THE ACT PROVIDES FOR DEDUCTION IN RESPECT OF INCOME OF A COOP SOCIETY BY WAY OF INTEREST OR DIVIDEND FROM IT S INVESTMENTS WITH OTHER COOP SOCIETY IF SUCH INCOME IS INCLUDED IN THE GROSS TOTAL INCOME OF THE SUCH COOP SOCIETY. IN VIEW THESE FACTS AND CIRCUMSTANCES WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS ENTITLED TO TH E DEDUCTION OF RS. 14,88,107/- IN RESPECT OF INTEREST RECEIVED/ DERIVED BY IT ON DEPOSITS WITH COOP. BANKS AND THEREFORE THE A PPEAL OF THE ASSESSEE IS ALLOWED BY REVERSING THE ORDER OF T HE CIT(A). THE AO IS DIRECTED ACCORDINGLY. 5.1 IT IS CLEAR THAT THE TRIBUNAL IN THE CASE OF LA NDS END CO-OPERATIVE HOUSING SOCIETY LTD. (SUPRA) HAS CONSIDERED A SIMILAR SITUATION AND ALLOWED THE CLAI M OF THE ASSESSEE. WE FIND THAT THE CIT(A) HAS PLACED RE LIANCE ON THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBU NAL IN THE CASE OF STATE BANK OF INDIA EMPLOYEES CO- OPERATIVE CREDIT SOCIETY LTD 57 TAXMAN.COM 367. IT IS FURTHER NOTED BY THE CIT(A) THAT THE SAID DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL HAS BEEN REFERRED T O BY THE SMC BENCH OF MUMBAI TRIBUNAL IN THE CASE OF SHRI SAIDATTA COOPERATIVE CREDIT SOCIETY LTD. (SUPRA). I N OUR VIEW, THE RELIANCE PLACED BY THE CIT(A) ON THE JUDG MENT OF THE AHMEDABAD BENCH OF THE TRIBUNAL IS QUITE UNTENABLE, INASMUCH AS, IN THE SAID CASE THE INTERE ST INCOME IN QUESTION WAS EARNED FROM DEPOSITS KEPT WI TH STATE BANK OF INDIA. OBVIOUSLY, STATE BANK OF INDIA IS NOT A CO-OPERATIVE SOCIETY SO AS TO JUSTIFY THE CLAIM T HAT SUCH INTEREST EARNINGS FALL WITHIN THE SCOPE OF SECTION 80P(2)(D) OF THE ACT. FURTHER, THE RELIANCE PLACED BY THE CIT(A) ON THE DECISION OF THE SMC BENCH OF MUMBAI TRIBUNAL IN THE CASE OF SHRI SAIDATTA COOPERATIVE C REDIT SOCIETY LTD.(SUPRA) IS ALSO OF NO AVAIL, INASMUCH A S, THE BENCH MERELY SET-ASIDE THE MATTER TO THE FILE OF TH E AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 9 ASSESSING OFFICER FOR EXAMINATION AFRESH, WHEREAS I N THE CASE OF LANDS END CO-OPERATIVE HOUSING SOCIETY LTD(SUPRA), THE CLAIM OF EXEMPTION UNDER SECTION 80P(2)(D) OF THE ACT WITH RESPECT TO THE INTEREST E ARNED FROM A CO-OPERATIVE BANK HAS BEEN UPHELD. THEREFORE , IN VIEW OF THE SAID PRECEDENT, THE CLAIM OF THE ASSESS EE DESERVES TO BE ALLOWED. WE HOLD SO. 6. IN VIEW OF THE ABOVE, THE ORDER OF THE CIT(A) IS SET-ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW DEDU CTION UNDER SECTION 80P(2)(D) OF THE ACT WITH RESPECT TO THE INTEREST INCOME EARNED FROM A CO-OPERATIVE BANK. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED , AS ABOVE. 2.2. IN THE AFORESAID ORDER, THE TRIBUNAL HAS CONSIDERED THE PROVISIONS OF SECTION 80P (2)(A)(I) AND 80P(2)(D) OF THE ACT WITH RESPECT TO PROFIT AND GAI NS OF BUSINESS IN CASE OF COOPERATIVE SOCIETY CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND CONCLUDED THAT THE INTEREST AND DIVIDEN D ON INVESTMENT WITH OTHER COOPERATIVE SOCIETY MAY OR MA Y NOT BE ENGAGED IN THE BANKING FOR PROVIDING CREDIT FACI LITIES TO ITS MEMBERS AND THE HEAD UNDER WHICH THE INCOME IS ASSESSABLE IS NOT MATERIAL FOR THE CLAIM OF DEDUCTI ON UNDER THIS SECTION. THE TRIBUNAL HAS ALREADY CONSIDERED T HE AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 10 DECISION FROM HON'BLE APEX COURT IN THE CASE OF TOT AGARS COOPERATIVE SALE SOCIETY LTD. (322 ITR 283)(SUPREME COURT), LANDS END COOPERATING HOUSING SOCIETY LTD. VS INCOME TAX OFFICER (ITA NO.2379/MUM/2015) ORDER DAT ED 15/01/2016 AND FINALLY THE ASSESSING OFFICER WAS DI RECTED TO ALLOW DEDUCTION U/S 80P(2)(D) OF THE ACT WITH RE SPECT TO INTEREST INCOME EARNED FROM A COOPERATIVE BANK. 2.3. HOWEVER, WE FIND THAT IN THE CASE OF PR. CIT VS EKTA CO-OP. CREDIT SOCIETY LTD. (2018) 91 TAXMANN.C OM 42 (GUJ.), THE HON'BLE GUJARAT HIGH COURT HELD AS UNDE R:- THE APPELLANT-REVENUE IN THIS APPEAL UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' ) HAS CALLED IN QUESTION THE ORDER DATED 5.5.2017 MADE BY THE INCOM E TAX APPELLATE TRIBUNAL, AHMEDABAD 'A' BENCH, AHMEDABAD (HEREINAFT ER REFERRED TO AS 'THE TRIBUNAL') IN ITA NO.112/AHD/2014 BY PROPOS ING THE FOLLOWING QUESTION, STATED TO BE A SUBSTANTIAL QUESTION OF LA W: 'WHETHER THE APPELLATE TRIBUNAL HAS ERRED IN LAW AN D ON FACTS OF THE CASE IN ALLOWING DEDUCTION U/S. 80P(2)(A)(I) TO ASS ESSEE'S SOCIETY EVEN THOUGH SAME IS COVERED U/S. 80P(4) R.W.S. 2(24)(VII A) BEING INCOME FROM PROVIDING CREDIT FACILITIES CARRIED ON BY A CO-OPER ATIVE SOCIETY WITH ITS MEMBERS?' 2. THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESS MENT YEAR 2010-11 SHOWING 'NIL' INCOME AFTER CLAIMING DEDUCTION OF RS .16,96,744/- UNDER SECTION 80P(2)(A)(I) OF THE ACT. THE ASSESSING OFFI CER WAS OF THE VIEW THAT THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER CH APTER VI-A WAS NOT AN ALLOWABLE DEDUCTION FOR THE REASON THAT THE SOCI ETY WAS ENGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILITY TO MEMBER S AND BANKING BUSINESS. UNDER SECTION 80P(2)(A) OF THE ACT, IN CA SE OF COOPERATIVE SOCIETY PROVIDING CREDIT FACILITIES TO ITS MEMBERS, THE WHOLE OF THE AMOUNT OF PROFIT AND GAINS FROM SUCH BUSINESS ARE D EDUCTIBLE. HOWEVER AS PER SUB-SECTION (4) OF SECTION 80P OF THE ACT, W HICH CAME TO BE INSERTED BY FINANCE ACT, 2006 WITH EFFECT FROM ASSE SSMENT YEAR 2007- AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 11 08, DEDUCTION UNDER SECTION 80P WILL NOT BE AVAILAB LE TO ANY CO- OPERATIVE BANK OR PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK WITH THE PRINCIPAL OBJECT OF PROVI DING LONG TERM CREDIT FOR AGRICULTURAL AND RURAL DEVELOPMENT ACTIV ITIES. BEING OF THE VIEW THAT THE ASSESSEE WAS A COOPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY COOPERATIV E AGRICULTURAL AND RURAL DEVELOPMENT BANK, THE ASSESSING OFFICER HELD THAT THE PROVISIONS OF SUB-SECTION (4) OF SECTION 80P OF THE ACT WOULD BE APPLICABLE TO THE ASSESSEE AND DISALLOWED THE DEDUCTION CLAIMED UNDER SECTION 80P OF THE ACT. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFO RE THE COMMISSIONER (APPEALS), WHO ALLOWED THE SAID GROUND OF APPEAL AN D DELETED THE DISALLOWANCE UNDER SECTION 80P OF THE ACT. THE REVE NUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL, BUT DID NOT S UCCEED. 3. MRS. MAUNA BHATT, LEARNED SENIOR STANDING COUNSEL FOR THE APPELLANT, ASSAILED THE IMPUGNED ORDER ON THE GROUNDS SET OUT IN THE MEMORANDUM OF APPEAL AND ON THE REASONS RECORDED BY THE ASSESS ING OFFICER IN THE ASSESSMENT ORDER. 4. AS CAN BE SEEN FROM THE ORDER PASSED BY THE COMMIS SIONER (APPEALS), HE HAS RECORDED THAT THE PROVISIONS OF S UB-SECTION (4) OF SECTION 80P OF THE ACT WOULD BE ATTRACTED IN CASE O F A COOPERATIVE BANK OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY COOPERATIVE AGRICULTURAL AND RURAL BANK. IN TERMS OF CLAUSE (A) OF THE EXPLANATION TO SECTION 80P(4), COOPERATIVE BANK AND PRIMARY AGRICU LTURAL CREDIT SOCIETY SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO TH EM IN PART V OF THE BANKING REGULATION ACT, 1949. THE COMMISSIONER (APP EALS) HAS RECORDED THAT THE ASSESSEE SOCIETY BEING A COOPERAT IVE CREDIT SOCIETY LIMITED IS NOT A BANK AS CONTEMPLATED UNDER THE BAN KING REGULATION ACT AND HENCE, THE PROVISIONS OF SUB-SECTION (4) OF SEC TION 80P OF THE ACT WOULD NOT BE APPLICABLE TO IT. 5. THE TRIBUNAL HAS CONCURRED WITH THE VIEW ADOPTED B Y THE COMMISSIONER (APPEALS). THE ABOVE VIEW OF THE TRIBU NAL IS FORTIFIED BY A DECISION OF THIS COURT IN THE CASE OF CIT V. SURAT VANKAR SAHAKARI SANGH LTD. , [2014] 225 TAXMAN 162/43 TAXMANN.COM 431 (GUJ.), WHEREIN THE COURT HAS REPELLED THE CONTENTION OF TH E REVENUE THAT SECTION 80P(4) WOULD EXCLUDE NOT ONLY THE COOPERATIVE BANKS OTHER THAN THOSE FULFILLING DESCRIPTION CONTAINED THEREIN BUT ALSO C REDIT SOCIETIES, WHICH ARE NOT COOPERATIVE BANKS. IN THE FACTS OF THE SAID CASE, THE ASSESSEE WAS A CREDIT COOPERATIVE SOCIETY AND NOT A COOPERATIVE BANK. THE COURT HELD THAT THE EXCLUSION CLAUSE OF SUB-SECTION (4) OF SEC TION 80P OF THE ACT WOULD, THEREFORE, NOT APPLY. THE ABOVE DECISION WOU LD BE SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. 6. THE IMPUGNED ORDER PASSED BY THE TRIBUNAL BEING IN CONSONANCE WITH THE VIEW ADOPTED BY THIS COURT IN THE ABOVE DECISIO N, DOES NOT SUFFER FROM ANY LEGAL INFIRMITY SO AS TO GIVE RISE TO A QU ESTION OF LAW, MUCH AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 12 LESS, A SUBSTANTIAL QUESTION OF LAW, WARRANTING INT ERFERENCE. THE APPEAL, THEREFORE, FAILS AND IS, ACCORDINGLY, SUMMARILY DIS MISSED. 2.4. IT IS NOTED THAT IN THE AFORESAID ORDER WITH RESPECT TO DEDUCTION UNDER SECTION 80P OF THE ACT I N RESPECT OF INCOME OF CREDIT COOPERATIVE SOCIETIES, ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS, THE LD. ASSESSING OFFICER DISALLOWED THE CLAIMED DEDUCTION. ON APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPEAL) , HELD THAT SINCE THE ASSESSEE BEING A COOPERATIVE CREDIT SOCIETY WAS NOT A BANK, HENCE, SECTION 80P(4) WOULD NOT BE APPLICABLE. ON FURTHER APPEAL, THE TRIBUNAL CONCUR RED WITH THE VIEW OF THE LD. COMMISSIONER (APPEALS). TH E HON'BLE HIGH COURT UPHELD THE ORDER OF THE TRIBUNAL BY HOLDING THAT THE ASSESSEE WOULD BE ENTITLED TO BE DEDUCTION U/S 80P(2)(A)(I) ON ITS INCOME FROM PROVI DING CREDIT FACILITIES TO ITS MEMBERS. IDENTICAL VIEW WA S TAKEN BY THE TRIBUNAL IN THE CASE OF AKSHAYA CO-OPERATIVE CREDIT SOCIETY LTD. (ITA NO.59/PAN/2016), ORDER DATED 21/11/2016. FOLLOWING THE AFORESAID DECISIONS AND M ORE SPECIFICALLY HON'BLE GUJARAT HIGH COURT, THE APPEAL OF THE ASSESSEE IS ALLOWED. AIRPORT AUTHORITY OF INDIA (IAD) STAFF CO-OP. CREDIT SOCIETY LTD. ITA NO.6461/MUM/2014 13 FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 28/03/2018. SD/- SD/- ( RAMIT KOCHAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER ' # MUMBAI; ' DATED :28/03/2018 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. )*+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. / / ' 0 ( )* ) / THE CIT, MUMBAI. 4. / / ' 0 / CIT(A)- , MUMBAI 5. 2!3 - , / )*% )4 , ' # / DR, ITAT, MUMBAI 6. 5 6# / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , ' # / ITAT, MUMBAI