ITO 22(2)(2), NAVI MUMBAI V. THE BARC EMPLOYEE CO OP CREDIT SOCIETY LTD, MUMBAI

ITA 6904/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4103 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 28-11-2013
• Court: TRIBUNAL
• Department Lawyers: RAJIV
• Assessee Lawyers: SUBODH RATNAPARKHI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B , MUMBAI BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA N O. 6904 / M/2013 ASSESSMENT YEAR: 20 1 0 - 11 ITO - 22(2)(2), 4 TH FLOOR, TOWER NO.06, ROOM NO.20, STATION COM PLEX, VASHI, NAVI MUMBAI 400 703 VS. M/S. THE BARC EXMPLOYEE CO - OP. CREDIT SOCIETY LTD., R - 5, SHED, BEHIND RLG NORTH GATE, TROMBAY MUMBAI 400 085 PAN: AAAJT 0003C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SUBODH RATNAPARKHI, A.R. REVENUE BY : SHRI RAJIV PANT, D.R. DATE OF HEARING : 0 2 . 1 1 . 201 5 DATE OF PRONOUNCEMENT : 03 . 0 2 .201 6 O R D E R PER R.C. SHARMA , ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) FOR THE A.Y. 2010 - 11, IN THE MATTER OF ORDER DECIDED UNDER SECTION 143(3) OF THE INCOME TAX ACT. 2. IN THIS APPEAL REVENUE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN ALLOWING ASSESSEES CLA I M FOR DEDUCTION UNDER SECTION 80 P OF THE A CT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND PERUSED. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO - OPERATIVE SOCIETY REGISTERED UNDER THE MAHARASHTRA CO - OPERATIVE SOCIETIES ACT, 1960. FOR THE ASSESSMENT YEAR UNDER APPEAL THE RETURN OF INC OME WAS FILED ON 15.10.2010 DECLARING INCOME OF RS.3,39,400/ - AFTER CLAIMING DEDUCTION U/S 80P AMOUNTING TO RS.6,33,94,235/ - . THE AO HELD THAT ASSESSEE IS A COOPERATIVE BANK OTHER THAN A PRIMARY ITA NO.6904/M/2013 M/S. THE BARC EXMPLOYEE CO - OP. CREDIT SOCIETY LTD. 2 AGRICULTURAL CREDIT SOCIETY OR A PRIMARY COOPERATIVE AGRICUL TURAL AND RURAL DEVELOPMENT BANK, THEREFORE, IT IS NOT ENTITLED FOR DEDUCTION CLAIMED BY IT. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) ALLOWED ASSESSEES CLAIM UNDER SECTION 80P OBSERVING AS UNDER: 7. I HAVE CAREFULLY CONSIDERED THE FINDINGS OF THE A O AS WELL AS SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE CASE LAWS RELIED UPON BY THE APPELLANT. A PERUSAL OF THE DECISION QUOTED BY THE APPELLANT REVEALS THAT: (I) WHERE THE ASSESSES WERE INDULGING IN THE BUSINESS OF BANKING BY PROVIDING VARIOUS FACILITIES RELATED TO BANKING TO GENERAL PUBLIC AT LARGE, IN SUCH CASES THE ASSESSES WERE HELD TO BE BELONGING TO THE CATEGORY OF CO - OP. BANK (II) WHERE THE ACTIVITIES OF THE ASSESSES WERE LIMITED TO THE ACCEPTANCE OF DEPOSITS FROM THE MEMBERS AND PROVIDING LOAN FACILITIES TO THE MEMBERS ONLY, WITHOUT PROVIDING OTHER FACILITIES OF BANKING SUCH AS THE FACILITY OF CHEQUE BOOKS, DRAFTS, ETC, SUCH ASSESESS HAVE NOT BEEN HELD TO BE BELONGING UNDER THE CATEGORY OF CO - OP. BANK. 8. FROM THE FACTS OF THE INSTANT CASE IT IS QUITE CLEAR THAT THE APPELLANT HAS LIMITED ITSELF TO THE MEMBERS OF EMPLOYEES OF BARC. FURTHER, THE APPELLANT HAS NOT PROVIDED BANKING FACILITIES EITHER TO GENERAL PUBLIC AT LARGE OR EVEN TO THE MEMBERS OF THE SOCIETY. EVEN THE BYE L AWS OF THE APPELLANT DOES NOT PROVIDE FOR THE BANKING ACTIVITIES. THE FACTS OF THE INSTANT CASE ARE ALMOST SIMILAR TO THE DECISIONS RELIED UPON BY THE APPELLANT PARTICULARLY, THE FACTS IN THE CASE OF A) ITO VS. JANKALYAN NAGRI SAHAKARI PAT SANSTHA 24 TAXMA N.COM 127 PUNE TRIBUNAL, - B) ACIT VS. BULDANA URBAN CO - OPERATIVE CREDIT SOCIETY LTD. 32 TAXMAAN.COM 69 NAGPUR TRIBUNAL AND C) DCIT VS. JAYALKSHI MAHILA VIVIDODESHAGALA SOULIARDA SAHAKARI LTD. 23 TAXMAAN.COM 313 PANAJI TRIBUNAL, WHERE THE ACTIVITIES OF THE ASSESSES WERE LIMITED TO THE MEMBERS OF A SPECIFIC GROUP AND THE AREA OF OPERATION WAS ALSO LIMITED TO THE ACCEPTANCE OF DEPOSITS OF THE MEMBERS AND PROVIDING CREDIT FACILITIES ONLY TO THE MEMBERS, WHICH HAVE BEEN HELD AS NOT FALLING UNDER THE BANKING ACTIVITIES AS DEFINED IN THE BANKING REGULATION ACT. THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS OF ITATS PUNE, NAGPUR, AND PANJI, THE APPELLANT ALSO CANNOT BE HELD AS A CO - OP. B ANK, HENCE THE DEDUCTION CLAIM U/S.80(P)(2)(A)(1) CANNOT BE DENIED TO IT. A.O. IS ACCORDINGLY DIRECTED TO ALLOW THE DEDUCTION CLAIMED BY THE APPELLANT. THIS GROUND IS ALLOWED . 5. AGAINST THE ABOVE ORDER OF THE LD. CIT(A), REVENUE IS IN FURTHER APPEAL BEFO RE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW . THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ITA NO.6904/M/2013 M/S. THE BARC EXMPLOYEE CO - OP. CREDIT SOCIETY LTD. 3 Q UEPEM URBAN CO - OPERATIVE SO CIETY? 120 TRR 153 WHEREIN THE HON'BLE HIGH COURT HELD AS UNDER: DEDUCTION U/S 80P(4) DEDUCTION WITH RESPECT OF COOPERATIVE SOCIETY ALLOWABILITY ASSESSEE WHO WERE REGISTERED CO - OPERATIVE SOCIETY HAD FILED ITS RETURN OF INCOME DECLARING GROSS TOTAL INCOME ASSESSEE HAD CLAIMED DEDUCTION OF ITS ENTIRE INCOME UNDER SECTION 80P(2)(A)(I) RESULTING IN NIL TAXABLE INCOME AO HAD DISALLOWED ASSESSEES CLAIM FOR DEDUCTION U/S 80P(2)(A)(I) ON THE GROUND THAT THE ASSESSEE WAS A PRIMARY CO - OPERATIVE BANK AND THEREFORE, H IT BY THE PROVISIONS OF SECTION SOP(4) WHICH EXCLUDED THE BENEFIT OF SECTION 80P TO COOPERATIVE BANKS CIT(A) HAD ALLOWED THE ASESSEE'S APPEAL HOLDING THAT THE ASSESSEE WAS NOT A CO - OPERATIVE BANK BUT A CO - OPERATIVE CREDIT SOCIETY AND NOT HIT BY THE EXCLUSI ON PROVIDED U/S 80P(4) AND AO WAS DIRECTED TO EXTEND THE BENEFIT OF DEDUCTION U/S 80P(2)(A)(I) TO THE ASSESSEE TRIBUNAL HAD ALLOWED REVENUE'S APPEAL AND HAD HELD THAT THE ASSESEE WAS NOT ENTITLED TO THE BENEFIT OF SECTION 80P(2)(A)(I), AS IT WAS A PRIMARY CO - OPERATIVE BANK, THUS HIT BY THE EXCLUSION PROVIDED IN SECTION 80P(4) HELD, ASSESSEE WAS ADMITTEDLY A CO - OPERATIVE SOCIETY REGISTERED UNDER THE CO - OPERATIVE SOCIETIES ACT AND WAS ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS CONSEQUENTLY, THE I NCOME EARNED BY THE ASSESSEE FROM ITS ACTIVITY OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS, WAS ENTITLED TO DEDUCTION U/S 80P(2)(A) (I) ASSESSEE WAS NOT A CO - OPERATIVE BANK AND THUS THE EXCLUSION PROVIDED U/S 80P (4) WOULD HAVE NO APPLICATION BANKING WAS NOT ITS PRIMARY OBJECT NOR ITS PRINCIPAL BUSINESS NOR DOES IT PROHIBIT ANY OTHER COOPERATIVE SOCIETY FROM BECOMING ITS MEMBER THUS THE ASSESSEE WAS NOT A COOPERATIVE BANK AS DEFINED IN THE EXPLANATION TO SECTION 80P(4) AND THEREFORE NOT HIT BY THE EXCLUSI ON PROVIDED4 THEREIN ASSESSEES APPEAL ALLOWED. 7. THE ISSUE IS ALSO COVERED BY THE FOLLOWING DECISIONS OF THE CO - ORDINATE BENCHES OF THE TRIBUNAL: (I) QUEPEM URBAN CO - OPERATIVE CREDIT SOCIETY LTD. VS. ACIT 120 DTR 153 (BOMBAY) 2015 ORDER DT.17.04.201 5. (II) CIT VS. JAFARI MOMIN VIKAS CO - OP. CREDIT SOCIETY LTD. 49 TAXMANN.COM 571 (GUJARAT) (2014) (III) TUMKUR MERCHANTS SOUHARDA CREDIT CO - OPERATIVE LTD. VS. ITO 230 TAXMAN 309 (KARNATAKA) (2015) (IV) ITO VS. KULSWAMI CO - OPERATIVE SOCIETY ITA NO.6790/MUM /2012, ITAT, A BENCH, MUMBAI ORDER DT.21.08.2015 (V) ITO VS. THE MAHARASHTRA MANTRALIYA VS. SANLAGANA SHASKIYA KARAMCHARI CO - OP. CREDIT SOCIETY LTD. ITA NO.5051/MUM/2013, ITAT, B BENCH, MUMBAI ORDER DT.29.10.2014 (VI ) ITO VS. M/S. MUMBAI TELEWORKERS CO - OP. CREDIT SOCIETY LTD. ITA NO.7106/MUM/2012, ITAT B BENCH, MUMBAI ORDER DT.30.06.2014 (VII) ITO VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. ITA ITA NO.6904/M/2013 M/S. THE BARC EXMPLOYEE CO - OP. CREDIT SOCIETY LTD. 4 NO.1336/PN/2012, ITAT B BENCH, PUNE ORDER DT.31.07 .201 3 (VIII) ACIT VS. BHEE THRIFT & CREDIT SOCIETY ITA NO .2 1 7IND /2012, INDORE BENCH, INDORE ORDER DT. 0 6 .0 8.2012 8. IN VIEW OF ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN ALLOWING ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80P. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 03 . 0 2 .2016 . SD/ - SD/ - ( AMARJIT SINGH ) ( R.C. SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEM BER MUMBAI, DATED: 03.02 . 201 6 . * KISHORE , SR.P.S /PKM . COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.