MUMBAI PUNE MOTOR MALAK SHRAMJIVAN PREMISES CO OP SOC LTD,MUMBAI vs. ITO 17(2)(4), MUMBAI

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ITA 1739/MUM/2017Status: DisposedITAT Mumbai30 August 2018AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issues to the file of the AO for fresh examination. The AO was directed to decide the matter denovo after evaluating the evidence to be produced by the assessee regarding mutuality and Section 80P deductions.

What were the facts?

The assessee, a co-operative society, appealed against the CIT(A)'s order for AY 2012-13. The appeal involved additions made by the AO for interest and charges received from members, and disallowance of deductions under Section 80P.

What were the issues?

Whether the income received by the co-operative society from its members is taxable based on the principle of mutuality, and whether deductions under Section 80P are allowable.

Which sections of the Income-tax Act were involved?

Section 80P,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “L”, MUMBAI

Before: SHRI JOGINDER SINGH & SHRI RAJESH KUMAR

For Appellant: Shri Bhupendra Shah, A.R
For Respondent: Dr. Shanteshwar Swami, Sr. D.R
Hearing: 28.08.2018Pronounced: 30.08.2018

Per Rajesh Kumar, Accountant Member:

1.

The present appeal has been preferred by the assessee against the order dated 11.01.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2012-13.

2.

The grounds raised

by the assessee are as under:

1. In the facts and circumstances of the case and in law, the learned A.O. erred in rejecting the principles of mutuality and rule of consistency applicable to the Appellant AOP by wrongly interpreting the facts and disregarding the objectives of Appellant AOP. Without prejudice to the above and alternatively, 2 M/s. Mumbai Pune Motor Malak Shramjivan Premises Co-Op Soc. Ltd.

2. In the facts and circumstances of the case and in law, the learned A.O. erred in adding the following sums even though the Appellant satisfies the concept of mutuality. Sr No. Particulars Amount (Rs.) 1. Interest received from members on Mumbai 16,70,863 Bank Loan 2. Bank Charges recovery 6,253 3. Society Maintenance Charges Received 14,60,000 4. Foundation/Plinth And Piling Interest Received 34,27,171 5. Interest received from Member against MDCC 48,17,043 Bank Total 1,13,81,330

3. In the facts and circumstances of the case and in law, the learned Assessing Officer erred in disallowing deduction of the following sums u/s 80P

Sr No. Particulars Amount (Rs.) 1. Interest on Saving Bank Account 80,548 2. Dividend from Co-op Bank 4,28,7 12 3. Interest on Fixed Deposit 45,35,291 Total 50,44,551

4. In the facts and circumstances of the case and in law, the learned Assessing Officer erred in disregarding basic deduction of Rs.50,000/- u/s 80P (2)(c).

5. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (A) erred in confirming all the grounds.

6. In the facts and circumstances of the case and in law, the learned A.O. erred in initiating penalty u/s 271 (1) (c) and interest u/s 234. [B] Relief Prayed: The appellant therefore prays as follows, 1. To apply the principles of mutuality and restore taxable income as Nil. 2. To delete the addition of Rs. 1,13,81,330/- in respect of 5 items as above. 3. To allow deduction u/s 80P of Rs. 50,44,551/- in respect of 3 items as above 4. To grant basic deduction of Rs. 50,000/- u/s 80P (2)(c) 5. To delete penalty levied u/s 271(l)(c) interest charged u/s 234. [C] General: • The appellant reserve rights to add alter or delete any portion of this appeal before its conclusion. • This appeal is filed in time and may please be allowed in full.

3.

At the outset, the Ld. Counsel of the assessee submitted that the issue raised in ground No.2 & 3 is as regards factual aspects involved which need to be examined by the AO qua the mutuality and deduction under section 80P of the Act which has not been examined during the course of assessment proceedings. As assessee could not file the necessary details due to the unavoidable circumstances and therefore , the ld AR requested that both the issues may be restored to the file of the AO so that the same could be examined and appreciated on the basis of mutuality and also on the issue of allowability of deduction under section 80P of the Act. The Ld. Counsel submitted that the assessee is a co-operative society formed to manage the office premises and undoubtedly on the concept of mutuality .

4.

The Ld. D.R. opposed the arguments of the Ld. A.R. by referring to the assessment order and also the appellate order and pointed out that in both the proceedings below the assessee was no co-operative and the issue as raised by the assessee could not be examined due to non furnishing of necessary details before both the authorities.

5.

After hearing both the parties and perusing the material on record, we are of the view that the ends of justice would be met if the issue is again referred to the file of the AO to examine the same afresh in the light of evidences produced by the assessee. Accordingly, we restore the issue to the file of 4 M/s. Mumbai Pune Motor Malak Shramjivan Premises Co-Op Soc. Ltd. the AO with the direction to decide the same denovo on the basis of facts and as per law after evaluating the evidences which the assessee may file during the set aside proceedings.

6.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 30.08.2018.

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