Income Tax Appellate Tribunal - Pune
Dronagiri Nagari Sahakari Patsantha ... vs Income-Tax Officer,, Panvel on 20 June, 2018
आयकर अपीलीय अधिकरण पुणे न्यायपीठ "SMC" पुणे में
IN THE INCOME TAX APPELLATE TRIBUNAL
SMC BENCH, PUNE
श्री डी. करुणाकरा राव, लेखा सदस्य के समक्ष
BEFORE SHRI D. KARUNAKARA RAO, AM
आयकर अपील सं. / ITA No.1183/PUN/2017
धििाारण वर्ा / Assessment Year : 2011-12
Dronagiri Nagri Sahakari
Patsanstha Maryadit,
Meghraj Apartment,
Mora Main Road, Uran,
District Raigad - 400702
PAN : AAAAD3087F .......अपीलाथी / Appellant
बिाम / V/s.
The Income Tax Officer,
Ward-3, Panvel ......प्रत्यथी / Respondent
Assessee by : Shri K.L. Doshi
Revenue by : Shri Mukesh Jha
सुनवाई की तारीख / Date of Hearing : 14.06.2018
घोषणा की तारीख / Date of Pronouncement : 20.06.2018
आदे श / ORDER
PER D. KARUNAKARA RAO, AM:
This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-2, Thane dated 28.02.2017 for the Assessment Year 2011-12.
2. Briefly stated relevant facts are that the assessee is a Co-operative Credit Society eligible for deduction under section 80P of the Income Tax Act, 1961 (in short „the Act‟). In the return of income filed by the assessee, assessee claimed deduction in respect of certain receipts, i.e. 2 ITA No.1183/PUN/2017 Dronagiri Nagri Sah. Patsanstha Maryadit Electricity Commission, Bank Interest, Interest on MSEB deposit, Advertisement Income, etc. The assessee filed return of income declaring total income of ₹ 3,77,670/-. At the end of assessment proceedings, the Assessing Officer computed assessed income at ₹ 16,25,503/-. In the process, the Assessing Officer denied claim of deduction under section 80P of the Act in respect of above referred receipts.
3. During first appellate proceedings, the assessee made elaborate submissions and relied on various decisions in support of claim of deduction under section 80P of the Act in respect of above mentioned receipts. However, the CIT(A) did not consider the said decisions relied on by assessee as relevant for granting relief to the assessee. Accordingly, CIT(A) denied the benefit of deduction in respect of said receipts.
4. Aggrieved with the order of CIT(A), the assessee has filed the present appeal before the Tribunal with the following grounds :
1. In the facts, circumstances and in law, the learned AO as well as CIT(A)-2 erred in assessing following income under the head „Income from Other Sources‟ as against shown under the head „Income from Business‟ while filing Income-tax Return.
a) Electricity Commission Rs.2,23,860
b) Bank Interest Rs. 14,127
c) MSEB Deposit Interest Rs. 44,486
d) Advertisement Income Rs. 13,000
Total Rs.2,95,473
2. The learned Assessing Officer as well as CIT(A) erred in not allowing the deduction u/s 80P(2)(a) in respect of above income assessed under the head „Income from Other Sources.3 ITA No.1183/PUN/2017
Dronagiri Nagri Sah. Patsanstha Maryadit
3. The learned Assessing Officer as well as CIT(A) erred in assessing the income of Rs.12,73,425 twice. This ground is prejudice to Ground No.1 and 2 above.
5. At the outset, the learned Counsel for assessee filed a chart, demonstrating that the issues are covered in favour of assessee. Referring to the eligibility of deduction in respect of Electricity Commission, the learned Counsel for assessee relied on various decisions of Tribunal and submitted that the same issue stands allowed in favour of assessee.
6. Referring to the decision of Tribunal in the case of Banganga Nagri Sahakari Patsanstha Ltd. Vs. ITO in ITA Nos.1521 & 1522/PN/2015, order dated 10.03.2016, the learned Counsel for assessee submitted that the issue of allowing of Electricity Commission is covered in favour of assessee.
7. Regarding the issue of Bank Interest, the learned Counsel for assessee relied on CBDT‟s Circular No.18/2015, dated 02.11.2015.
8. Regarding MSEB Deposit Interest and Advertisement Income, the learned Counsel for assessee demonstrated that the principle of parity may be followed as the said income is also entitled for deduction under section 80P of the Act.
4ITA No.1183/PUN/2017
Dronagiri Nagri Sah. Patsanstha Maryadit
9. The learned Departmental Representative for the Revenue opposed the same vehemently.
10. After hearing both the learned Counsel for assessee and the learned Departmental Representative for the Revenue, it transpires that similar issue of Electricity Commission arose before the Tribunal in the case of Banganga Nagri Sahakari Patsanstha Ltd. Vs. ITO (supra), wherein it was held as under:-
"10. We have carefully considered the rival submissions, orders of the authorities below and case law cited. The short question before us is to determine eligibility of deduction under section 80P of the Act in respect of income earned from certain allied activities viz. (i) Locker Rent; (ii) Ambulance Rent; (iii) Commission on Collection of MSEB bills; and (iv) Health Club by cooperative credit society carrying on banking business. The alternate ground agitated by the assessee is towards ad-hoc estimation of expenses in relation to such income @ 10% of the gross receipt as against actual and proportionate expenses attributable for the purpose of carrying on such allied activities. This has resulted in higher incidence of taxation owing to denial of deduction under section 80P on such income. We find that eligibility of the assessee for deduction under section 80P of the Act in respect of locker rent income is covered by the decision of the Hon‟ble Supreme Court in the case of Mehsana District Central Co-op. Bank Ltd. (supra). Therefore, we set-aside the direction of the CIT(A) in this regard and hold that the assessee is eligible for deduction under section 80P of the Act in respect of this income. With respect to the income from running of Ambulance, while holding that the assessee is not eligible for deduction under section 80P(2)(a) or (b), we are in total agreement with the alternate plea of the assessee that the expenses attributable for the purpose operating such activity ought to have to be allowed on actual/proportionate basis. We are of the view that the action of the CIT(A) in restricting the expenses artificially @ 10% of the gross income from such activities is not sustainable in law being devoid of objectivity. The Assessing Officer is accordingly directed to allow the expenses which are attributable to the running of Ambulance and determine the income from the aforesaid activity. The surplus if any, from this activity would be entitled to relief made residuary clause of section 80P(2)(c)(ii). We also notice that the Income from MSEB commission is held to be business activity as per decision cited by the assessee in the case of Ahmednagar District Co-operative Bank Ltd. (supra) and other decisions noted above. Accordingly, we hold that the assessee is entitled to relief under section 80P as per law....."5 ITA No.1183/PUN/2017
Dronagiri Nagri Sah. Patsanstha Maryadit
11. The issue of Electricity Commission arising in the present appeal is similar to the issue before the Tribunal and following the same parity of reasoning, this issue is decided in favour of assessee. Accordingly, relevant ground is allowed.
12. The issue of Bank Interest has already been settled by the Apex Court in the case of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. (2007) 160 TAXMAN 48 (SC). In this regard, the CBDT has also issued Circular No.18/2015. The relevant para of CBDT‟s Circular reads as under:-
"4. In the light of the Supreme Court‟s decision in the matter, the issue is well settled. Accordingly, the Board has decided that no appeals may henceforth be filed on this ground by the officers of the Department and appeals already filed, if any, on this ground before Courts/Tribunals may be withdrawn / not pressed upon. This may be brought to the notice of all concerned."
13. In view of above settled position, the claim of assessee is allowed and hence, relevant ground is allowed.
14. Regarding allowability of deduction under section 80P of the Act in respect of interest receipts received out of deposits with MSEB and the Advertisement Income earned by the assessee, it is the claim of assessee that the said receipts are also entitled to the deduction. Considering the principle of parity with that of Electricity Commission and Bank Interest as such, there are no case laws filed by the assessee in respect of his claim for deduction in these receipts, nobody has examined the principle of parity as claimed by the assessee. Therefore, the issues of MSEB Deposit Interest and Advertisement Income are set-aside to the file of 6 ITA No.1183/PUN/2017 Dronagiri Nagri Sah. Patsanstha Maryadit Assessing Officer with a direction to verify the nexus and admissibility of the claim of assessee in the light of above cited decisions by the assessee and adjudicate the same afresh. The Assessing Officer shall afford reasonable opportunity of hearing to the assessee while deciding the issues. Hence, these issues are allowed for statistical purposes. Accordingly, relevant grounds raised by the assessee are allowed for statistical purposes.
15. In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced on this 20th day of June, 2018.
Sd/-
(D.KARUNAKARA RAO) लेखा सदस्य / ACCOUNTANT MEMBER पुणे / Pune; ददनाां क Dated : 20th June, 2018.
GCVSR आदे श की प्रधिधलधप अग्रेधर्ि/Copy of the Order is forwarded to :
1. अपीलाथी / The Appellant;
2. प्रत्यथी / The Respondent;
3. आयकर आयुक्त(अपील) / The CIT(A)-2, Thane
4. आयकर आयुक्त / The Pr.CIT-2, Thane
5. दवभागीय प्रदतदनदध, आयकर अपीलीय अदधकरण, पुणे "SMC" / DR „SMC‟, ITAT, Pune;
6. गार्ड फाईल / Guard file.
आदे शानु सार/ BY ORDER,स सत्यादपत प्रदत //True Copy// //True Copy// Senior Private Secretary आयकर अपीलीय अदधकरण ,पुणे / ITAT, Pune