Income Tax Appellate Tribunal - Cochin
The Kerala State Homeopathic Co-Op ... vs Acit,Circle-1,, Alappuzha on 15 October, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
COCHIN BENCH, COCHIN
Before Shri Chandra Poojari, AM & Shri George George K, JM
ITA No.283/Coch/2018 : Asst.Year 2013-2014
ITA No.284/Coch/2018 : Asst.Year 2014-2015
M/s.The Kerala State The Asst.Commissioner of
Homeopathic Co-operative Vs. Income-tax, Circle - 1
Pharmacy Limited Alappuzha.
Pathirappally
Alappuzha - 688 521.
PAN : AAAJT0881C.
(Appellant) (Respondent)
Appellant by : Smt.Lekshmi N.A. & Sri.Biju Narayanan
Respondent by : Smt.A.S.Bindhu, Sr.DR
Date of
Date of Hearing : 11.10.2018 Pronouncement : 15.10.2018
ORDER
Per George George K., JM
These appeals at the instance of the assessee are directed against separate orders of the CIT(A), both dated 18.04.2018. The relevant assessment years are 2013-2014 and 2014-2015.
2. The solitary issue that is raised is whether the assessee is entitled to deduction u/s 80P(2)(d) of the I.T.Act on interest received on investments made with Alapuzha District Co- operative Bank Limited ?
3. Brief facts of the case are as follows:-
The assessee is a Co-operative Society. It is engaged in the business of manufacturing and sale of homeopathic 2 ITA No.283 & 284/Coch/2018. The Kerala State Homeopathic Co-op Phar.Ltd.
medicines. For the assessment years 2013-2014 and 2014- 2015, assessments were completed by denying the claim made u/s 80P(2)(d) of the I.T.Act. The reasoning of the Assessing Officer to deny the benefit of deduction u/s 80P(2)(d) of the I.T.Act was that the payer of the amount, viz., Alappuzha District Co-operative Bank Limited is not a co- operative society and interest / dividend paid by the co- operative society alone is entitled to exemption u/s 80P(2)(d) of the I.T.Act.
4. Aggrieved by the assessments completed for assessment years 2013-2014 and 2014-2015, the assessee preferred appeals before the first appellate authority. The CIT(A) confirmed the view taken by the Assessing Officer. The relevant finding of the CIT(A) with reference to assessment year 2013-2014 reads as follows:-
"4.6 Therefore, in the light of the clarification issued by the CBDT, as above, it is evident that a Cooperative Bank will have registration under Cooperative Societies Act as well as under Banking Regulation Act. Consequently, the ADCB Ltd., which is registered under Cooperative Societies Act as well as under Banking Regulation Act, is a Cooperative Bank and not Cooperative Society. Hence, the interest income received from the ADCB Ltd is not eligible for deduction under section 80P(2)(d) of the Act. Therefore, the addition of Rs.33,33,184 made by the Assessing Officer is confirmed and the grounds raised by the Appellant are dismissed."
5. The assessee being aggrieved by the CIT(A)'s orders dismissing its appeals for assessment years 2013-2014 and 3 ITA No.283 & 284/Coch/2018. The Kerala State Homeopathic Co-op Phar.Ltd.
2014-2015, has filed the present appeals before the Tribunal. The learned Counsel reiterated the submissions made before the Income-tax authorities. It was further submitted that the Hon'ble Karnataka High Court in the case of Principal Commissioner of Income-tax & Anrs. v. Totgars Co-operative Sale Society [(2007) 392 ITR 74 (Karn.)] had held that co- operative society includes also co-operative bank and interest earned from deposits with co-operative bank was also entitled to deduction u/s 80P(2)(d) of the I.T.Act. The learned Departmental Representative, on the other hand, supported the orders passed by the Income-tax authorities.
6. We have heard the rival submissions and perused the material on record. The solitary issue for our consideration is whether the interest income received from Alappuzha District Co-operative Bank Limited assessed as income from other sources was entitled to the benefit of deduction u/s 80P(2)(d) of the I.T.Act ?
6.1 Section 80P(2)(d) of the I.T.Act allows the deduction of interest or dividend derived by a co-operative society from investments made with any other co-operative society. The entire interest income / dividend income received on investments with other co-operative society is entitled for deduction u/s 80P(2)(d) of the I.T.Act. The Hon'ble Karnataka High Court in the case of Principal Commissioner of Income-tax & Anrs. v. Totagars Co-operative Sale Society [(2017) 395 ITR 611 (Karn.) had categorically held that deduction u/s 80P(2)(d) of the I.T.Act is only for income received on 4 ITA No.283 & 284/Coch/2018. The Kerala State Homeopathic Co-op Phar.Ltd.
investments with a Co-operative Society and not a Co- operative Bank. Whereas, earlier Bench of the Hon'ble Karnataka High Court in the case of Principal Commissioner of Income-tax & Anrs. v. Totagars Co-operative Sale Society [(2017) 392 ITR 74 (Karn.) had held that Co-operative Society includes a Co-operative Bank and interest earned from deposits with a Co-operative Bank is also entitled to deduction u/s 80P(2)(d) of the I.T.Act.
6.2 The provisions of section 80P(2)(d) of the I.T.Act are very clear. The benefit of this section is available only for the interest / dividend that are received by a co-operative society for investments made with another co-operative society. In the instant case, the assessee had produced certificate of registration of the payer, viz., Alappuzha District Co-operative Bank Limited. Alappuzha District Co-operative Bank Limited is also registered under the Reserve Bank of India under the Banking Regulations Act, 1949 for doing the business of banking. The first appellate authority, while dismissing the appeals filed by the assessee for the assessment year 2013- 2014 and 2014-2015, had elaborately considered the distinction between the co-operative society and a co- operative bank. The CIT(A) had categorically concluded that Alappuzha District Co-operative Bank Ltd. is is co-operative Bank and not a co-operative society. This categorical finding of the CIT(A), was never dispelled before the Tribunal. Admittedly, when the interest income is received from a co- operative bank, the recipient co-operative society would not be entitled to deduction u/s 80P(2)(d) of the I.T.Act. Therefore, 5 ITA No.283 & 284/Coch/2018. The Kerala State Homeopathic Co-op Phar.Ltd.
the orders of the CIT(A), confirming the assessment order is correct and no interference is called for. It is ordered accordingly.
7. In the result, the appeals filed by the assessee are dismissed.
Order pronounced on this 15th day of October, 2018.
Sd/- Sd/-
(Chandra Poojari) (George George K.)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Cochin ; Dated : 15th October, 2018.
Devdas*
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. The Pr.CIT Kottayam.
4. The CIT (A), Kottayam.
5. DR, ITAT, Cochin
6. Guard file.
BY ORDER,
(Asstt. Registrar)
ITAT, Cochin