Income Tax Appellate Tribunal - Bangalore
M/S Bank Officers And Officials House ... vs Assistant Commissioner Of Income Tax ... on 1 June, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC-A" BENCH : BANGALORE
BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND
SHRI LALIET KUMAR, JUDICIAL MEMBER
ITA No. 1202/Bang/2018
Assessment Year : 2014-15
M/s. Bank Officers and Officials
House Building Co-operative
The Assistant Commissioner
Society Ltd.,
of Income Tax,
No. 33, 1st Floor, Sirur Park Road, Vs.
Circle - 3 (2) (1),
Sheshadripuram,
Bangalore.
Bangalore - 560 020.
PAN: AAAJB0694H
APPELLANT RESPONDENT
Appellant by : Shri S.N. Shyanbhog, Advocate
Respondent by : Shri D.K. Jha, Addl. CIT (DR)
Date of hearing : 24.05.2018
Date of Pronouncement : 01.06.2018
ORDER
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by the assessee which is directed against the order of ld. CIT(A)-3, Bangalore dated20.02.2018 for Assessment Year 2014-15.
2. The grounds raised by the assessee are as under.
"1. The orders of the Learned Commissioner of Appeals-3, Bangalore, and the A.O. are erroneous in holding that the amount of Rs.27,06,623/- being loss from business cannot be set off against the interest income as the income of the society is not taxable on the basis of mutuality.
2. The CIT(A) and A.O. have failed to understand the fact that the administrative expenses of Rs.31,23,181/- to run the society has been claimed against:
(i) Interest income of Rs.29,42,465/-
(ii) Income from Transfer / No objection Certificate fees colleccted by the Society at the time of resale of sites by the members.
(iii) Share Application Fees collected from members.
( (ii) and (iii) above together totaling to Rs.3,57,105/- ) ITA No. 1202/Bang/2018 Page 2 of 4 In view of the above, the administrative expenses have to be deducted from the interest income also.
3. The Learned CIT (A) and A.O. have failed to understand the fact that the interest received is from statutory deposits, deposits made out of the profits of the appellant and from the advance amounts received for the sites from the members of the Society. Hence, same is attributable to business activity of the appellant.
4. The CIT(A) has erred in holding that the appellant is not entitled exemption u/s 80P (2) (d) of the IT act on interest of Rs.11,06,738/- received from deposits kept in Co-operative Bank following relied on the decision of the Hon'ble High Court of Karnataka in the case of Pr.CIT V/s Totgars Co-Operative Society (2017) 83 taxman.com 140 when decision relied on by the CIT(Appeals) is not applicable to the facts of the Appellant's case.
5. The total income of the appellant is enhanced by the CIT(A) by withdrawing exemption allowed by the A.O. u/s 80P(2)(d) on interest of above Rs.11,06,738/-without giving opportunity to the appellant as required u/s 251 (2) of the IT Act. Hence, enhancement of Rs.11,06,738/- has to be deleted.
6. For the grounds as cited above and any other grounds that may be urged at the time of hearing of this appeal, it is prayed that the administrative expenses be allowed for deduction from Interest income and Exemption u/s 80P(2)(d) may be allowed by deleting enhancement of Rs.11, 06,738/-"
3. It was submitted by ld. AR of assessee that the ld. CIT(A) has followed the judgment of Hon'ble Karnataka High Court dated 16.06.2017 rendered in the case of PCIT and Another Vs. Totagars Co-operative Sale Society as reported in 395 ITR 611 (Karn). He submitted that the facts of this case are different and therefore, this judgment is not applicable in the present case. He submitted that in the present case, another judgment of Hon'ble Karnataka High Court rendered in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO as reported in 230 Taxman 309 is applicable and therefore, the matter should be restored back to AO or CIT (A) for a fresh decision by following this judgment of Hon'ble Karnataka High Court rendered in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (supra). At this juncture,the bench wanted to know regarding the facts of the present case because the decision of Hon'ble Karnataka High Court rendered in both these ITA No. 1202/Bang/2018 Page 3 of 4 cases i.e. PCIT and Another Vs. Totagars Co-operative Sale Society (supra) and Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (supra) are on the same line but the conclusion is different because the facts are different. The bench pointed out that in the case of PCIT and Another Vs. Totagars Co- operative Sale Society(supra), the money deposited in bank was out of liability of the assessee and in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO(supra), the money deposited in bank was not out of liability but out of assessee's own funds and therefore, this decision is in favour of the assessee. The bench pointed out that if the facts in the present case are similar to that of the facts in the case of PCIT and Another Vs. Totagars Co- operative Sale Society (supra) then the issue should be decided against the assessee but if the facts of the assessee are similar to that of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO(supra) then the issue is to be decided in favour of the assessee. In reply, it was submitted by ld. AR of assessee that the facts are not readily available and therefore, the matter may be restored back to the file of CIT(A) for fresh decision after examining the facts of the present case in the light of these two judgments of Hon'ble Karnataka High Court. The ld. DR of revenue also agreed to this proposition put forward by the ld. AR of assessee.
4. I have considered the rival submissions and I feel it proper that the matter should go back to the file of CIT(A) for fresh decision after examining the facts of the present case in the light of these two judgments rendered in the case of PCIT and Another Vs. Totagars Co-operative Sale Society(supra) and Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO(supra) and if it is found that the facts of the present case are in line with the facts of the PCIT and Another Vs. Totagars Co-operative Sale Society(supra) then the issue may be decided against the assessee and if the facts of the present case are inline with the facts of the case of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO(supra) then the issue may be decided in favour of the assessee. The CIT(A) should pass necessary order as per law in the light of above discussion after providing adequate opportunity of being heard to both sides.ITA No. 1202/Bang/2018 Page 4 of 4
5. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on the date mentioned on the caption page.
Sd/- Sd/-
(LALIET KUMAR) (ARUN KUMAR GARODIA)
Judicial Member Accountant Member
Bangalore,
Dated, the 01st June, 2018.
/MS/
Copy to:
1. Appellant 4. CIT(A)
2. Respondent 5. DR, ITAT, Bangalore
3. CIT 6. Guard file
By order
Senior Private Secretary,
Income Tax Appellate Tribunal,
Bangalore.