DCIT 1(3), MUMBAI V. THE MAHARASHTRA STATE CO OP BANK LTD, MUMBAI

ITA 8791/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2257 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 08-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 28-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SATHYA MOORTHYDR
• Assessee Lawyers: J D MISTRI
• Section: 143(3); 244A; 56

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -EBENCH MUMBAI , . . , BEFORE S/SHRI RAJENDRA,ACCOUNTANT MEMBER AND C. N. PRASAD,JUDICIAL MEMBER ./ITA/8791/MUM/2011, /ASSESSMENT YEARS: 2005-06 DCIT-1(3), ROOM NO.540/564, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, NEW MARINE LINES MUMBAI-400 020. VS. M/S. THE MAHARASHTRA STATE CO-OP. BANK LTD. SIR, VITHALDAS THAKERSEY MEMORIAL BUILDING-9, NAGINDAS MASTER ROAD MUMBAI-400 001. PAN:AAAAT 4066 A ( /APPELLANT ) ( / RESPONDENT) REVENUE BY: SHRI N. SATHYA MOORTHY-DR ASSESSEE BY: SHRI J.D. MISTRI / DATE OF HEARING: 18.07.2016 / DATE OF PRONOUNCEMENT: 27.07.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 10.10.2011 OF THE CIT(A )-2,MUMBAI, THE A.O.(ASSESSING OFFICER) HAS FILED THE PRESENT APPEAL FOR THE ABOV E MENTIONED ASSESSMENT YEAR. 2. ASSESSEE-COMPANY ENGAGED IN THE BUSINESS OF BANKING , FILED ITS RETURN OF INCOME ON 31.10.2005 DECLARING TOTAL INCOME AT RS.NIL. THE AO COMPLETED THE ASSESSMENT U/S.143(3) ON 20.11.2007 AT A TOTAL INCOME OF RS.NIL. REASSESSMEN T U/S. 143(3) R.W.S 147 OF THE ACT WAS COMPLETED ON 30.11.2010 DETERMINING THE INCOME OF THE ASSESSEE AT RS.1.32CRORES. 3. THE SOLITARY GROUND OF APPEAL IS ABOUT ALLOWING THE DEDUCTION U/S.80P(2)(A)(I) OF THE ACT, CLAIMED BY THE ASSESSEE. DURING THE ASSESSMENT PROC EEDINGS THE AO FOUND THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS.1.32 CRORES AS INTERES T ON INCOME TAX REFUND. HE HELD THAT SAME WAS DERIVED FROM NON BANKING ACTIVITY AND THEREFORE , WAS NOT ELIGIBLE FOR DEDUCTION U/S.80P(2)(AI).HE TAXED THE SAID INCOME UNDER THE H EAD INCOME FROM OTHER SOURCES. 4. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PREFERRE D AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA) .BEFORE HIM, THE ASSESSEE CONTENDED THAT IT WAS ENGAGED IN BANKING BUSINESS, THAT THE ISSUE STANDS DECIDED IN FAVOUR O F THE ASSESSEE BY THE ORDER OF THE TRIBUNAL (ITA/7108/MUM/2004-AY 2000-01,DT20.1.2010)-(SB). TH E FAA REFERRING TO THE ABOVE JUDGMENT HELD THAT ASSESSEE WAS ENTITLED TO DEDUCTI ON U/S. 80P(2)(AI) ON THE AMOUNT OF INTEREST RECEIVED U/S. 244A OF THE ACT. 8791/M/11-MAHARASHTRA STATE CO-OP BANK 2 5. BEFORE US, THE DEPARTMENTAL REPRESENTATIVE (DR) REF ERRED TO THE CASE OF TOTGARS CO- OPERATIVE SALES SOCIETY LTD. (188TAXMAN 282) OF THE HON'BLE SUPREME COURT. THE AUTHORISED REPRESENTATIVE (AR) REFERRED TO THE CASE OF THE S PECIAL BENCH (SUPRA), DELIVERED IN THE CASE OF THE ASSESSEE. HE FURTHER STATED THAT FACTS OF TO TGARS CO-OP SALES SOCIETY LTD. WERE DISTINGUISHABLE FROM THE FACTS OF THE CASE UNDER CO NSIDERATION. IN THAT CASE THE ASSESSEE WAS A CO-OP SOCIETY, THAT IT HAD INVESTED SURPLUS FUNDS I N SHORT TERM DEPOSIT AND GOVERNMENT SECURITIES, THAT THE HONBLE APEX COURT HAD HELD TH AT INTEREST EARNED BY IT WOULD BE TAXABLE U/S. 56 OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. IN OUR OPINION THE CO-OP SOCIETY CANNOT BE EQUATED WITH A CO-OP BANK, THAT THE FACTS OF TOTGARS CO-OP SALES SOCIETY LTD.(SUPRA), ARE NOT APPLICABLE TO THE FAC TS UNDER APPEAL. WE FIND THAT IN THE CASE OF HARYANA STATE CO-OP APEX BANK LTD. (322 ITR 404) TH E HONBLE PUNJAB &HARYANA HIGH COURT HAS HELD THAT CO-OP APEX BANK COULD NOT BE SU BJECTED TO INCOME TAX IN RESPECT OF INTEREST RECEIVED BY IT ON REFUND OF EXCESS INCOME TAX PAID AND THAT THE AMOUNT IN QUESTION WOULD QUALIFY U/S. 80P(2)(AI). THE HONBLE COURT AL SO REFERRED TO THE JUDGMENT OF HONBLE MADRAS HIGH COURT DELIVERED IN THE CASE OF MADURAI DISTRICT CO-OP BANK LTD. (239 ITR 700). RESPECTFULLY FOLLOWING THE ABOVE TWO JUDGMEN TS WE HOLD THAT THE ORDER OF FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. THEREFORE, CON FIRMING HIS ORDER WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT APPEAL FILED BY AO STANDS DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JULY,2016. 27 , 2016 SD/- SD/- ( . . / C.N. PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 27.07.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ ! '#$ , 4. THE CONCERNED CIT / ! '#$ 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ %& 8791/M/11-MAHARASHTRA STATE CO-OP BANK 3 //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.