ITO 18(2)(4), MUMBAI V. SANJAY CO OP CREDIT SOCIETY LTD, MUMBAI

ITA 7052/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8981 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Department
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 03-12-2013
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Keywords: Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) I.T.A. NO. 7052/MUM/2013 (ASSESSMENT YEAR : 2010-11) INCOME TAX OFFICER 18(2)(4) MUMBAI VS M/S SANJAY CO-OPERATIVE CREDIT SOCIETY LTD, 3/13, UPENDRA NAGAR, SENAPATI BAPAT MARG DADAR (W), MUMBAI-28 PAN : AABAS6287R (APPELLANT) (RESPONDENT) APPELLANT BY SHRI B.S. BIST RESPONDENT BY SHRI SATISH MODY DATE OF HEARING : 13-12-2016 DATE OF ORDER : 11 -01-2017 O R D E R PER ASHWANI TANEJA, AM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-29, MUM BAI [HEREINAFTER CALLED CIT(A)] DATED 25-09-2013 PASSED AGAINST THE ASSESSMENT ORDER OF THE AO DATED 28-12-2012 U/S 143(3) FOR AY. 2010-11 ON THE FOLLOWING GROUNDS:- I ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN: 2 I.T.A. NO.7052/MUM/2013 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 33 ,70,030/ - HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.33, 70,030/- WITHOUT APPRECIATING THE FACT THAT AFTER INITIATION OF SCRUTINY PROCEEDINGS BY ISSUE OF NOTICE U/S. 143(2), THE ASS ESSEE HAD FILED REVISED STATEMENT OF INCOME DURING THE COURSE OF AS SESSMENT PROCEEDINGS WHEREIN DEDUCTION U/S.80P(2)(D) AMOUNTI NG TO RS,33, 14,284/- WAS CLAIMED, WHICH WAS NOT CLAIMED BY IT IN THE ORIGINAL AS WELL AS REVISED RETURN FILED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN HOLDING THAT THE INTEREST INCOM E OF RS.33, 70,030/- RECEIVED FROM VARIOUS INVESTMENTS MADE IN THE CO- OPERATIVE BANKS SHOULD BE TREATED UNDER THE HEAD 'P ROFIT AND GAIN FROM THE BUSINESS' AND NOT UNDER THE HEAD 'INCOME FROM OTHER SOURCES' BY HOLDING THAT THE JUDGMENT IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOCIETY LTD. VS. ITO REPO RTED IN 322 ITR 283 (SC) (2010) HAS NOT BEEN CORRECTLY APPLIED IN T HE CASE OF THE ASSESSEE BY THE ASSESSING OFFICER. 2) FOR THESE AND OTHER REASONS IT IS SUBMITTED THAT THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THAT THE AO RESTORE D. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS WHETHER THE LD.CIT(A) HAS RIGHTLY ALLOWED THE BENEFIT OF DEDUCTION U/S 80P TO THE ASSESSEE SOCIETY ON THE AMOUNT OF INTEREST INCOME. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS STATED BY THE LD. COUNSEL THAT THE LD.CIT(A) HAS ALLOWED THE RELI EF TO THE ASSESSEE ON BOTH THE GROUNDS I.E. RELIEF HAS BEEN ALLOWED U/S 8 0P(2)(A)(I) OF THE ACT ON THE GROUND THAT ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80P SINCE WHOLE AMOUNT OF PROFITS AND GAINS OF BUSINESS WAS ATTRIBU TABLE TO THE ACTIVITY OF CARRYING ON THE BUSINESS OF BANKING BY PROVIDING CR EDIT FACILITIES TO ITS MEMBERS AS WELL AS THE ASSESSEE WAS ELIGIBLE FOR DE DUCTION U/S 80P(2)(D) SINCE THE INTEREST INCOME WAS EARNED BY THE ASSESSE E SOCIETY FROM THE 3 I.T.A. NO.7052/MUM/2013 INVESTMENT WITH OTHER CO-OPERATIVE SOCIETIES AND TH AT THE ORDER OF THE LD.CIT(A) SHOULD BE UPHELD IN VIEW OF THE DETAILED FINDINGS RECORDED BY THE LD.CIT(A) IN HIS ORDER. 4. PER CONTRA, THE LD. DR SUBMITTED THAT FAIRLY SPEAKI NG, THE ASSESSEE MAY NOT BE ELIGIBLE FOR DEDUCTION U/S 80(P)(2)(A)(I ) OF THE ACT, BUT ASSESSEE MAY BE ELIGIBLE FOR DEDUCTION U/S 80P(2)(D) SINCE T HE IMPUGNED INTEREST HAS BEEN EARNED FROM OTHER CO-OPERATIVE BANKS ONLY. 5. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LOWER AUTHORITIES. IT IS NOTED THAT THE LD. CIT(A) HAS INTER-ALIA HELD THAT THE ASSESSEE SOCIETY IS ELIGIBLE FOR THE BENEFIT OF DEDUCTION U/S 80P(2) (D) WITH FOLLOWING OBSERVATIONS:- 27. THE INTEREST INCOME EARNED BY THE APPELLANT IS NOT TAXABLE IN VIEW OF THE PROVISIONS OF SECTION 80P(2)(D) ALSO. T HE ENTIRE DEPOSITS MADE BY THE OF THE APPELLANT SOCIETY ARE WITH THE COOPER ATIVE BANKS AND AS PER THE PROVISIONS OF SECTION 80P(2)(D), ANY INTEREST INCOM E RECEIVED FROM THE DEPOSITS WITH THE COOPERATIVE BANKS ARE NOT TAXABLE . IT CAN BE OBSERVED FROM THE DETAILS FILED THAT ALL THE DEPOSITS OF THE APPELLANT ARE WITH THE COOPERATIVE BANKS, THE DETAILS OF WHICH ARE AS UNDE R;- DEPOSIT WITH RS. THE MUMBAL DISTRICT CENTRAL COOP BANK LTD 2,09,61,325.00 THE MUMBAI DISTRICT CENTRAL COOP BANK LTD. 100000 THE MAHARASHTRA STATE COOP BANK LTD. 36,51,544.00 THE MAHARASHTRA STATE COOP BANK LTD 21,89,176.00 THE MAHARASHTRA STATE COOP BANK LTD. 3,33,767.00 THE MAHARASHTRA STATE COOP BANK LTD. 1,60,000.00 SARASWAT CO-OP BANK LTD 15,00,000 ABHYUDAYA COOP BANK LTD, 25,00,000.00 4 I.T.A. NO.7052/MUM/2013 DOMBIVLI NAGARK SAHAKARI BANK LTD 29,98,475.00 TOTAL 3,82,12,980.00 SINCE ALL THE DEPOSITS OF THE SOCIETY ARE WITH THE COOPERATIVE BANKS, THE INTEREST EARNED ON SUCH DEPOSITS IS EXEMPT UNDER SE CTION 80(2)(P) AND THEREFORE THE CLAIM OF EXEMPTION IS ALLOWABLE UNDER THE ABOVE SECTION. 6. IT HAS BEEN JOINTLY STATED BY BOTH THE PARTIES THAT THE IMPUGNED INTEREST INCOME IS DERIVED ONLY FROM CO-OPERATIVE BANKS. TH US, THE ASSESSEE SOCIETY IS CLEARLY ELIGIBLE, ON FACTS, FOR DEDUCTION U/S 80P(2 )(D). THUS, ADDITION MADE BY THE AO HAS RIGHTLY BEEN DELETED BY THE LD. CIT(A). 7. SINCE WE HAVE UPHELD THE ORDER OF LD. CIT(A) ON THE GROUND OF ELIGIBILITY FOR DEDUCTION U/S 80P(2)(D), WE ARE NOT GOING INTO OTHER ASPECTS, VIZ. WHETHER THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80P(2)( A)(I) OF THE ACT. 8. AS A RESULT, APPEAL OF THE REVENUE IS DISMISSED SUB JECT TO THE AFORESAID DIRECTIONS. ORDER PRONOUNCED IN THE COURT ON THIS _11 TH DAY OF JANUARY, 2017. SD/- SD/- (MAHAVIR SINGH) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT: 11 TH JANUARY, 2017 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , E-BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES