NYATI ESTATE CO-OPERATIVE HOUSING SOCIETY,PUNE vs. INCOME-TAX OFFICER, WARD - 14(2), PUNE

PDF · subscribers
ITA 1509/PUN/2018Status: DisposedITAT Pune20 March 2019AY 2015-169 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal, following its previous decisions and High Court/Supreme Court pronouncements, held that interest income earned by a cooperative society on surplus funds invested in scheduled banks is eligible for deduction under section 80P(2)(a)(i) of the Act.

What were the facts?

The assessee, a cooperative housing society, appealed an order taxing its interest income. The Assessing Officer denied deduction under section 80P on interest earned from banks other than cooperative banks, a view upheld by the CIT(A).

What were the issues?

The primary issue was whether interest income earned by a cooperative housing society from banks other than cooperative banks is eligible for deduction under Section 80P of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

For Respondent: Shri M.K. Verma
Hearing: 12.03.2019Pronounced: 20.03.2019

PER SUSHMA CHOWLA, JM:

The appeal filed by assessee is against order of CIT(A)-7, Pune, dated 22.05.2018 relating to assessment year 2015-16 against order passed under section 143(3) of the Income-tax Act, 1961 (in short ‘the Act’).

2.

Despite service of notice, none appeared on behalf of assessee nor any application was moved for adjournment. 2 Nyati Estte Co-op. Hsg. Society

3.

The present appeal has been filed after delay of 12 days. The assessee has furnished an affidavit in this regard and in the entirety of the facts and circumstances, we condone the delay of 12 days in filing the appeal late before the Tribunal.

4.

The assessee has raised the following ground of appeal:- “The Learned Income Tax Officer has erred in taxing the income of the cooperative housing society without considering the exemption of mutuality of its income.”

5.

The only issue raised in the present appeal is with regard to taxability of interest income earned by Co-operative Housing Society.

6.

Despite service of notice, none appeared on behalf of the assessee. However, we proceed to decide the issue after hearing the learned Departmental Representative for the Revenue. The issue which has been raised in the present appeal vis-à-vis interest income earned by the assessee, wherein ₹ 13,56,597/- was earned from Oriental Bank of Commerce and ₹ 2,700/- from HDFC Bank Ltd. The Assessing Officer was of the view that the assessee was not entitled to claim the deduction under section 80P of the Act on the interest income received from banks other than Co-operative banks and the same was denied to the assessee. The CIT(A) upheld the order of Assessing Officer.

7.

We find that the said issue has been decided by the Tribunal in series of decisions including the latest decision in the case of ITO Vs. M/s. Maharashtra Bank Employees Co-op. Credit Society Ltd. in ITA Nos.454 to 456/PUN/2015, relating to assessment years 2007-08, 2008-09 & 2010-11 along with CO 3 Nyati Estte Co-op. Hsg. Society

Nos.16 & 17/PUN/2017, relating to assessment years 2007-08 & 2008-09, order dated 22.12.2017, wherein reliance was placed on the ratio laid down by the Hon’ble High Court of Punjab & Haryana in CIT Vs. Nawanshahar Central Co-operative Bank Ltd. (2003) 263 ITR 320 (P&H), confirmed by the Hon'ble Supreme Court. After considering the ratio laid down by the Hon’ble High Court of Delhi in Mantola Co-operative Thrift & Credit Society Ltd. Vs. CIT (supra) of interest accrued on surplus funds, the issue was decided in favour of assessee holding as under:- “11. We have heard the rival contentions and perused the record. The limited issue which arises in the present appeal filed by the Revenue is against relief given by the CIT(A) on the claim of assessee society that interest income received on FDRs with scheduled Bank of Maharashtra is entitled to claim of deduction under section 80P(2)(a)(i) of the Act. The assessee was a Co- operative society of the employees of Bank of Maharashtra, and was engaged in the business of providing credit facilities to its members. The activities carried on by the assessee society were subject to the provisions of Maharashtra Co-operative Societies Act, 1960. Under section 66 of the said Act, every society which is making profits from its transactions shall maintain reserve fund as per clause (1) to section 66 of the said Act. Clause (2) further lays down that every society shall carry atleast one-fourth of net profits each year to the reserve fund; and such reserve fund may subject to the rules made thereunder, if any, be used in the business of society or may, subject to provisions of section 70, be invested, as the State Government may by general or special order direct or may, with the previous sanction of the State Government be used in part for some public purpose to promote the objects of the Act or some such purposes of the State Government or of the local interest. Section 70 of the said Act lays down that society shall invest or deposit its funds in one or more of the investments provided in clauses (a) to (e) thereunder. We are concerned here with clause (d) to section 70 of the said Act, which reads as under:- “70… (a)…. (b)…. (c)… (d) in any co-operative bank (other than those referred to in clause (a) of this section) or banking company approved for this purpose by the

More judgments on Section 80P

All 5,069 judgments and leading authorities on Section 80P →

Recent GST High Court judgments

Search GST case law →