Income Tax Appellate Tribunal - Mumbai
A.C.I.T.-23(3), Mumbai vs M/S. The Maharaqshtra State Co.Op, Hsg ... on 21 March, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL "H"
BENCH, MUMBAI
BEFORE SHRI R. C. SHARMA, AM &
SH. SANDEEP GOSAIN, JM
आयकरअपीलसं./ I.T.A. No. 3086/Mum/2016
(निर्धारणवर्ा / Assessment Year: 2012-13)
ACIT -23 (3) M/s Maharashtra State
Matru Mandir, 1st floor, R. Co-Operative Housing
No. 104, Tardeo Road, Finance Corporation Ltd.
बिधम/ C-21, E-Block, House Fin.
Mumbai-400007
Vs.
Bhavan, Bandra Kurla
complex, Bandra (e),
Mumbai-400051.
स्थायीलेखासं ./ जीआइआरसं ./ PAN No. AAAAT0072E
(अपीलाथी/Appellant) : (प्रत्यथी / Respondent)
अपीलाथीकीओरसे/ Appellant by : Shri M. C. Omi
Ninghshen, DR
प्रत्यथीकीओरसे/Respondentby : Shri Sanjeev V. Joshi,
AR
सुनवाईकीतारीख/
: 08.02.18
Date of Hearing
घोषणाकीतारीख /
: 21.03.18
Date of Pronouncement
आदे श / O R D E R
Per Sandeep Gosain, Judicial Member:
The present Appeal filed by the revenue is against the order of Ld. CIT (Appeal) - 34, Mumbai dated 05.02.2016 for AY 2012-13on the grounds mentioned herein below: - 2
I.T.A. No. 3086/Mum/2016 M/s Maharashtra State Co-Operative Housing Finance Corporation Ltd.
1. On facts and in law and in the circumstances of the case in law. the Ld. CIT(A)-34,Mumbai erred in directing to allow deduction u/s 80P(2)(i)(a) of Rs 12474,943/- for interest received from investment with other co-operative societies through the investment was made as per statutory requirement under Maharashtra Co-operative Societies Act during its ordinary course of business.
2. The appellant prays that the order of the Ld, CIT(Appeals)-34, Mumbai on the abovegrounds be set aside and that of the A 0 be restored.
3. The appellant craves leave to add, alter amend and modify any or all ground of appeal
2. The brief facts of the case are that the assesseeis a Co- operative Society engaged in the business of providing credit facilities to its members. The assessee society had invested its funds in other co-operative societies as per the statutory requirementunder Maharashtra Co-operative Societies Act. The assessee receivedinterest of Rs.11,24,74,943/- from the investments with other co-operative societies. As per the, assessee, deduction u/s,80P(2) was claimed short by 3 I.T.A. No. 3086/Mum/2016 M/s Maharashtra State Co-Operative Housing Finance Corporation Ltd.
Rs.1,24,74,943/- inadvertently due to technical mistake. The AO disallowed the claim of deduction u/s.80P(2)(d) made by the assessee during the assessment proceedings for the following two reasons:(a) The claim was nor, made in the return of income either original or revised and (b) The claim u/s.80P(2)(d)even otherwise was not allowable as interestwas received on surplus funds parked with other co-operative banks. The AO expressed his opinion that deduction u/s 80P(2)(d) is not available on the interest earned by the assessee from the surplus funds.
Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties partly allowed the appeal of the assessee.
Now before us, the revenue has preferred the present appeal by raising the above grounds.
Ground No. 1.
3. This ground raised by the revenue relates to challenging the order of Ld. CIT(A) indirecting to allow deduction u/s 80P(2)(i)(a) of Rs 1,24,74,943/- for interest received from 4 I.T.A. No. 3086/Mum/2016 M/s Maharashtra State Co-Operative Housing Finance Corporation Ltd.
investment with other co-operative societies through the investment was made as per statutory requirement under Maharashtra Co-operative Societies Act during its ordinary course of business.
4. Ld. DR appearing on behalf of the revenue submitted that assessee itself had filed return showing income of Rs. 1,24,79,943 and the acknowledgement of return filed by the assessee is the proof of it. It was further submitted by Ld. DR that initially the assessee has not raised any claim in respect of deduction of Rs. 1,24,79,943/- either in the return originally filed by the assessee or thereafter. Ld. DR further submitted that assessee can only revise the claim by filing revised return, however no revised return was filed by the assessee.
Ld. DR relied upon the judgment of Hon'ble Supreme Court in the case of Goetz India Ltd 248 ITR 323 (SC) wherein it was held that the claim of the assessee cannot be revised by filing submissions during the course of assessment. It was further submitted by Ld. DR that the claim of the assessee during the course of assessment is nothing but revision of income which is 5 I.T.A. No. 3086/Mum/2016 M/s Maharashtra State Co-Operative Housing Finance Corporation Ltd.
not allowed except by filing revised return as held by Hon'ble Supreme Court.
Ld. DR further submitted that assessee had kept surplus funds with other cooperative societies and thus the interest earned is not an interest earned on amount on the investment made in other cooperative societies, but it is the interest earned from the bank on the 'surplus funds' of the assessee. Therefore, this interest amount is out of the purview of the provisions of section 80P(2)(d) of the I.T. Act and the deduction on the said amount is not allowable.
Ld. DR also relied upon the orders passed by Coordinate Bench of Hon'ble ITAT in the case of M/s Vaibhav Cooperative Credit Society in ITA No. 5819&5217/Mum/2014 wherein the Hon'ble ITAT while relying upon the judgment of Hon'ble Supreme Court in the case of Totgars Cooperative Sale Society Ltd (2010) 229 CTR (SC) 209 has held that the interest received by a cooperative society from investment of its surplus funds is assessable under the head 'Income from other sources' and deduction u/s 80P is not available in respect of such interest and dividend income. 6
I.T.A. No. 3086/Mum/2016 M/s Maharashtra State Co-Operative Housing Finance Corporation Ltd.
5. On the other hand Ld. AR relied upon the orders passed by Ld. CIT(A) and submitted that the assessee had not claimed deduction u/s 80P(2)(d) in the return of income. Ld. AR relied upon the judgment of Hon'ble Bombay High Court in the case of CIT vrs. Sheth Developers Pvt. Ltd. and CIT vrs. Pruthvi Brokers & Shareholders Pvt. Ltd. (349 ITR 233). It was further submitted by Ld. AR that the decision of the Hon'ble Supreme court in the case Goetz India Ltd 248 ITR 323 (SC)is concerned, the said decision does not proving the appellant authority from entertaining such claims.
Ld. AR further submitted that as far as the claim for deduction u/s 80P(2)(d) is concerned, this clause allowed deduction for the whole of the interest and dividend income derived by the cooperative societies. Ld. AR further submitted that this section does not differentiate between investments made of compulsion and out of surplus funds.
Ld. AR further submitted that all the investments with other cooperative societies represents investments made out of compulsion i.e. to comply with statutory requirements and not out of 'surplus funds'. In this respect, Ld. AR relied upon the 7 I.T.A. No. 3086/Mum/2016 M/s Maharashtra State Co-Operative Housing Finance Corporation Ltd.
judgment in the case of CIT Vrs. Doba Co-operative Sugar Mills Ltd. (230 ITR 774), CIT Vrs. Dugdh Sahkari Sangh Ltd. (277 ITR 35) and CIT Vrs. Kangra Co-operative Bank Ltd. (309 ITR 106).
6. We have heard counsels for both the parties at length and we have also perused the material placed on record as well as the orders passed by revenue authorities. We find that the orders passed by Coordinate Bench of Hon'ble ITAT in the case of M/s Vaibhav Cooperative Credit Society in ITA No. 5819 & 5217/Mum/2014 wherein the Hon'ble ITAT while relying upon the judgment of Hon'ble Supreme Court in the case of Totgars Cooperative Sale Society Ltd (2010) 229 CTR (SC) 209 has held that the interest received by a cooperative society from investment of its surplus funds is assessable under the head 'Income from other sources' and deduction u/s 80P is not available in respect of such interest and dividend income. Whereas on the contrary, Ld. AR has categorically submitted that the investments with other cooperative societies were made out of compulsion i.e. to comply with statutory requirements and not 8 I.T.A. No. 3086/Mum/2016 M/s Maharashtra State Co-Operative Housing Finance Corporation Ltd.
out of 'surplus funds' and in this respect, Ld. AR relied upon various judgments as stated above.
Be that as it may, after considering the facts of the present case and hearing the counsels at length, we find that nowhere is mentioned as to which was the statutory requirements which was required to be complied with by the assessee and as to how the investments made by the assessee was out of compulsion and moreover the judgment of Hon'ble Supreme Court in the case of Totgars Cooperative Sale Society Ltd (2010) 229 CTR (SC) 209was not found to be mentioned or discussed in any of the orders passed by the revenue authorities.
Considering the interest of justice, we set aside the order of Ld. CIT(A) and remit the matter back to the file of AO with a direction to pass afresh order after specifically discussing the nature of compulsion or statutory requirement of making investment and also after considering the applicability of the judgment of Hon'ble Supreme Court in the case of Totgars Cooperative Sale Society Ltd (2010) 229 CTR (SC) 209.It is needless here to mention that before passing the order of 9 I.T.A. No. 3086/Mum/2016 M/s Maharashtra State Co-Operative Housing Finance Corporation Ltd.
assessment, the AO shall provide sufficient opportunity of hearing to the assesse.
Before parting, we may make it clear that our decision to restore the matter back to the file of AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the AO independently in accordance with law. With these directions, this ground raised by the revenue is allowed for statistical purposes. Ground No. 2 & 3
7. These grounds are general in nature, thus requires no specific adjudication.
8. In the net result, the appeal filed by the revenue stands allowed for statistical purposes.
Order pronounced in the open court on 21st March, 2018 Sd/- Sd/-
(R. C. Sharam) (Sandeep Gosain) ले खासदस्य / Accountant Memberन्याययकसदस्य / Judicial Member मुंबई Mumbai;यदनां कDated : 21.03.2018 Sr.PS. Dhananjay 10 I.T.A. No. 3086/Mum/2016 M/s Maharashtra State Co-Operative Housing Finance Corporation Ltd.
आदे शकीप्रनिनिनिअग्रे नर्ि/Copy of the Order forwarded to :
1. अपीलाथी/ The Appellant
2. प्रत्यथी/ The Respondent
3. आयकरआयुक्त(अपील) / The CIT(A)
4. आयकरआयुक्त/ CIT- concerned
5. यवभागीयप्रयतयनयध, आयकरअपीलीयअयधकरण, मुंबई/ DR, ITAT, Mumbai
6. गार्ड फाईल / Guard File आदे शधिुसधर/ BY ORDER, उि/सहधयकिंजीकधर .
(Dy./Asstt.Registrar) आयकरअिीिीयअनर्करण, मुंबई/ ITAT, Mumbai