SHALAKA SANGH CO-OP HOUSING SOC. LTD,MUMBAI vs. ITO 17(3)(3), MUMBAI

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ITA 743/MUM/2019Status: DisposedITAT Mumbai21 May 2021AY 2014-154 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 held that a fresh claim can be made before appellate authorities and that interest earned from co-operative banks is eligible for deduction under section 80P(2)(d) as co-operative banks are considered co-operative societies.

What were the facts?

The assessee, a co-operative housing society, claimed a deduction under section 80P(2)(d) for interest income earned on deposits with co-operative banks. The Assessing Officer disallowed this claim, stating it was not made in the original or revised return and that only interest from co-operative societies was eligible.

What were the issues?

Whether a deduction claim can be made for the first time before the appellate authority, and whether interest income from co-operative banks is eligible for deduction under Section 80P(2)(d).

Which sections of the Income-tax Act were involved?

Section 80P(2)(d)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY

For Appellant: Shri Viren Shah, AR
For Respondent: Smt. Smita Verma, DR

Date of hearing 18-03-2021 Date of pronouncement 21-05-2021 O R D E R This is an appeal by the assessee against order dated 12-12-2018 of learned Commissioner of Income Tax (Appeals)-28, Mumbai for the assessment year 2014-15.

2.

Grounds 4 and 5 being general grounds, do not require adjudication.

3. Ground 3 is not pressed; hence, dismissed.

4.

The only issue raised in grounds 1 & 2 relates to disallowance of deduction claimed under section 80P(2)(d) of the Income Tax Act, 1961 for an amount of Rs.20,79,677/-.

5.

Briefly the facts are, the assessee is a co-operative housing society. For the assessment year under dispute, assessee filed its return of income on 29-11-2014 declaring nil income. In course of assessment proceedings, assessee filed a 2 ITA 743/Mum/2019 revised computation of income claiming deduction under section 80P(2)(d) of the Act in respect of interest income of Rs.20,79,677/- earned on deposits made with some co-operative banks. The assessing officer disallowed assessee’s claim primarily on two reasoning. Firstly, such claim was not made either in the original return of income or through a revised return of income. Secondly, referring to section 80P(2)(d) of the Act, the assessing officer held that only interest/dividend income received from co-operative societies would be eligible for deduction. Accordingly, he disallowed assessee’s claim and added back an amount of Rs.20,79,677/-. Assessee contested the aforesaid addition before learned Commissioner of Income Tax (Appeals). Agreeing with the view of the assessing officer that assessee’s claim of deduction under section 80P(2)(d) cannot be allowed, as, such claim was not made either in the original return of income or in a revised return of income, learned Commissioner of Income Tax (Appeals) upheld the disallowance. Consequently, he did not decide the merits of the issue.

6.

The learned counsel for the assessee submitted, now it is well settled principle of law that the assessee can make a fresh claim in course of assessment proceedings and even before the appellate authority. Therefore, the deduction claimed by the assessee is admissible.

7.

On merits, the learned counsel submitted, since co-operative banks are primarily co-operative societies, the income earned from deposits with co- operative banks would be eligible for deduction under section 80P(2)(d) of the Act. In support of such contention, he relied upon the following decisions:- 1. PCIT vs Totagars Co-operative Sale Society (2017) 78 taxmann.com 169 (Kar) 2. Solitaire CHS Ltd vs PCIT (ITA No.3155/Mum/2019)

3 ITA 743/Mum/2019

3.

Lands End Co-operative Housing Society Ltd vs ITO(ITA No.3566/Mum/2014) 4. Sea Green Co-operative Housing Society Ltd vs ITO (ITA No.1343/Mum/2017 5. Kaliandas Udyog Bhavan Premises Co-operative Society Ltd ITO (2018) 94 taxmann.com 15(Mum Trib)

8.

The learned departmental representative relied upon the observations of the assessing officer and learned Commissioner of Income Tax (Appeals).

9.

I have considered rival submissions and perused materials on record. As regards the issue, whether the revised claim made by the assessee in course of assessment proceedings is acceptable or not, in my view, the issue is no more res integra. Now it is fairly well settled that assessee can make a fresh/revised claim not only before the assessing officer, but even before the appellate authorities. In fact, in the decision of the Hon’ble Apex Court relied upon by the assessing officer and learned Commissioner of Income Tax (Appeals), it has been made clear that there is no fetter on the appellate authority to consider a revised/fresh claim of the assessee. In case of CIT vs Prithvi Brokers & Shareholders (2012) 23 taxmann.com 23, the Hon’ble jurisdictional High Court has held that the assessee can make a revised/fresh claim in course of proceedings before the assessing officer and appellate authorities. 10. As regards the merits of the issue, it is evident, only reason for denial of assessee’s claim of deduction under section 80P(2)(d) is, interest was earned from a co-operative bank. However, in my view, the aforesaid reasoning of the assessing officer would not hold water as in various case laws cited before me by the learned counsel for the assessee, the Tribunal has taken a consistent view that co-operative banks are primarily co-operative societies; hence, any 4 ITA 743/Mum/2019 interest/dividend earned from such co-operative banks would be eligible for deduction under section 80P(2)(d) of the Act.

11.

In view of the aforesaid, I allow assessee’s claim of deduction. The addition made is deleted. These grounds are allowed.

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