Vishal Co-op. Housing Service Society Ltd., Surat V. Income Tax Officer, Ward - 2(3)(2), Surat

ITA 886/SRT/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8597 (ITAT-SURAT)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-02-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 20-12-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 154; 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 886/Srt/2023 (Assessment Year 2018-19) (Physical hearing) Vishal Cooperative Housing Service Society Limited, U M Road, Bhatar Char Rasta, Althan, Surat-395006. PAN No. AABAV 9861 G Vs. I.T.O., Ward 2(3)(2), Surat. Appellant/ Assessee Respondent/ Revenue Assessee represented by Shri Devendra Joshi from the office of Shri Devesh D Sopariwala, C.A. Department represented by Shri Vinod Kumar, Sr.DR Appeal instituted on 21/12/2023 Date of hearing 22/02/2024 Date of pronouncement 22/02/2024 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) [in short, the ld. CIT(A)] dated 24/11/2023 for the Assessment Year (AY) 2018-19. The assessee has raised following grounds of appeal: “1. On fact and circumstances of the case, the learned Commissioner of Income tax (Appeals) has erred in confirming addition made by the Assessing officer order passed U/s. 154 on 04.01.2022. 2. On fact and circumstance of the case, the learned Commissioner of Income tax (Appeals) has erred by not allowing deduction 80P(2)(d) of Rs. 1,21,015/- Which is otherwise eligible being the assessee is Co.Op.Housing Society. 3. On fact and circumstance of the case, the learned Commissioner of Income tax (Appeals) has erred in not considering decision Madhi Sugar Staff Co. Op. Credit Society Limited V/s. Dy. CIT by Surat Branch ITAT Tribunal which followed the ITA No. 886/Srt/2023 Vishal Co.Op Housing Service Society Ltd Vs ITO 2 decision of Bardoli Vihag Gam Vikas Co.Op. Credit Society Ltd. V/s. principal commissioner of Income tax -2, Surat by Surat Branch ITAT. The both of decision given by Surat ITAT by relying on the decision of honourable High Court of Gujarat in case of Surat Vankar Sahakari Sangh Limited V/s. Assistant Commissioner of Income Tax, Surat. 4. The appellant reserves right to add, alter, vary any or all grounds of appeals.” 2. Brief facts of the case are that the assessee is a cooperative society, engaged in maintenance of group housing society. The assessee in its computation of income claimed deduction of Rs. 1,21,000/- on account of interest income earned on fixed deposit and Rs. 15 as a dividend income with Surat District Cooperative Bank. The Central Processing Centre (CPC) while processing the return of income, disallowed such deduction. The assessee filed application under Section 154 of the Income Tax Act, 1961 (in short, the Act) for seeking rectification in the order of CPC. Application of assessee was rejected by CPC vide order dated 04/01/2022. 3. Aggrieved by the disallowance/adjustment on account of deduction under Section 80P(2)(d) of the Act of Rs. 1,21,000/-, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee has given complete bifurcation of interest earned on deposit with Surat District Cooperative Bank. The assessee also relied on certain case laws that the cooperative banks are primarily a cooperative society and the assessee is eligible for deduction of interest earned from such cooperative banks as has been held by Mumbai Tribunal in Kona Seema CO-operative society Vs ITO in ITA No. 2024/Mum/2023 dated 08.11.2023 and Madras High Court in Thorapadi Urban Co-operative Society. ITA No. 886/Srt/2023 Vishal Co.Op Housing Service Society Ltd Vs ITO 3 4. The ld. CIT(A)/NFAC after considering the submissions of assessee upheld the order of adjustment made by CPC by holding that the income earned by way of interest from deposit or investment or surplus fund does not change its character irrespective of fact whether such income of interest is earned from scheduled bank or a cooperative bank. Further aggrieved, the assessee has filed present appeal before this Tribunal. 5. The assessee filed application for adjournment of hearing. However, on perusal of grounds of appeal, we find that the assessee in the grounds of appeal has specifically contended that the grounds of appeal is covered by the decision of this Tribunal in Bardoli Vibhag Gram Vikas Co. Op. Credit Society Ltd. Vs Pr.CIT as well as Madhi Sugar Staff Co. Op Credit Society Ltd. Vs DCIT. Finding the fact that the grounds of appeal raised by the assessee is apparently covered in favour of assessee, we have heard the submissions of the ld Sr DR for the revenue and perused the orders of lower authorities carefully. 6. The ld. Sr. DR for the revenue was asked to make his submission, then he supported the orders of lower authorities and would submit that the assessee may be directed to give details of interest income earned from Surat District Cooperative Bank. The notice of hearing of appeal was served upon the assessee and the assessee filed application for filing compilation/documents. ITA No. 886/Srt/2023 Vishal Co.Op Housing Service Society Ltd Vs ITO 4 7. We have considered the submissions of ld. Sr. DR for the revenue and perused the orders of the lower authorities carefully. The dispute relates to deduction under Section 80P(2)(d) of the Act with regard to interest earned on fixed deposit with Surat District Cooperative Bank. We find that the ld. CIT(A) has not disputed about earning of such interest income from Surat District Cooperative Bank even otherwise the assessee has given complete month-wise bifurcation on interest earned from Surat District Cooperative Bank. We find that in a series of decisions, the combination of this Bench by following the decision of Hon'ble Jurisdictional High Court in Surat Vankar Sahakari Sangh Ltd. Vs ACIT (2016) 72 taxmann.com 169 (Guj) has held that the cooperative banks are primarily the cooperative society and the interest earned on deposit with cooperative banks are eligible for deduction under Section 80P(2)(d) of the Act. Similar view was taken in Bardoli Vibhag Gram Vikas Co-op Credit Society Ltd. Vs PCIT (2021) 127 taxmann.com 334 (Surat-Trib). Taking a consistent view, the Assessing Officer is directed to delete the entire disallowance. 8. In the result, this appeal of assessee is allowed. Order announced in open court on 22 nd February, 2024. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 22/02/2024 *Ranjan ITA No. 886/Srt/2023 Vishal Co.Op Housing Service Society Ltd Vs ITO 5 Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat