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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI THURSDAY, THE 29TH DAY OF SEPTEMBER 2022 / 7TH ASWINA, 1944 ITA NO. 115 OF 2019 AGAINST THE ORDER ITA 283/2018 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S:
THE KERALA STATE HOMEOPATHIC CO-OPERATIVE PHARMACY LIMITED, PATHIRAPPALLY, ALAPPUZHA -688 521, REPRESENTED BY ITS MANAGING DIRECTOR, MR.JOY PONNAPPAN
BY ADVS. TELMA RAJU; ANIL D. NAIR SRI.R.SREEJITH; SRI.ACHYUT K PADMARAJ SMT. ARYA ANIL; SHRI.GOKULRAJ L.
RESPONDENT/S:
THE ASST.COMMISSIONER OF INCOME TAX, CIRCLE-1, ALAPPUZHA
BY SR. ADVOCATE MR P K R MENON THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 29.09.2022, ALONG WITH ITA.174/2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI THURSDAY, THE 29TH DAY OF SEPTEMBER 2022 / 7TH ASWINA, 1944 ITA NO. 174 OF 2019 AGAINST THE ORDER ITA 284/2018 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S:
THE KERALA STATE HOMEOPATHIC CO-OPERATIVE PHARMACY LIMITED PATHIRAPPALLY, ALAPPUZHA 688 521 REPRESENTED BY ITS MANAGING DIRECTOR MR. JOY PONNAPPAN
BY ADVS.TELMA RAJU; ANIL D. NAIR SRI.SREEJITH R.NAIR; SRI.ACHYUT K PADMARAJ SMT. ARYA ANIL; SHRI.GOKULRAJ L.
RESPONDENT/S:
THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-1, ALAPPUZHA 688 001
BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 29.09.2022, ALONG WITH ITA.115/2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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J U D G M E N T [ITA Nos.115/2019, 174/2019] S.V. Bhatti, J. Heard Adv Telma Raju and learned Senior Advocate Mr P K R Menon for parties.
The Kerala State Homeopathic Co-operative Pharmacy Ltd/assessee is the appellant. The Assistant Commissioner of Income Tax/Revenue is the respondent. The appeals, at the instance of the assessee, are directed against the order dated 30.11.2018 of the Income Tax Appellate Tribunal (for short ‘Tribunal’) Cochin Bench in ITA Nos.283 & 284/Coch/2018. The appeals relate to the return filed by the assessee for the Assessment Year 2013-14 and 2014-15 respectively.
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The circumstances relevant to dispose of the appeal are stated in sufficient detail in the orders under appeal. Hence, are not reiterated.
3.1 The following substantial questions of law are raised for our consideration in both the appeals: i. In the facts and circumstances of the case, ought not the Tribunal have held that the appellant is entitled for deduction under Sec.80P(2)(d) to the extent of interest returned from Aleppey District Co-operative Bank. ii. In the facts and circumstances of the case, ought not the Tribunal have held that Alleppey District Co-operative Bank who has been registered under the Banking Regulation Act also is a Co-operative Society and therefore the interest earned therefrom is entitled for deduction under Sec.80P (2)(d).?
The controversy between the assessee and the Revenue is substantially centering around the eligibility of deduction under Section 80P of the Income Tax Act, 1961 (for
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short ‘the Act’). The learned Counsel invited the attention of the Court to the judgment in Mavilayi Service Co-operative Bank Ltd v. Commissioner of Income Tax1 and Principal Commissioner of Income Tax v. Peroorkada Service Co-operative Bank Ltd2. In Peroorkada Service Co-operative Bank Ltd we have kept in our perspective the ratio laid down by the Supreme Court in Mavilayi Service Co-operative Bank Ltd, the consequential consideration that would arise thereafter, and we have, in the said background, decided the deductions permissible under Section 80P(2) of the Act; what constitutes business income, and what is to be classified as income from other sources. By following the ratio laid down in Mavilayi Service Co-operative Bank Ltd & Peroorkada Service Co-operative Bank Ltd the questions are answered in favour of the assessee and against the Revenue. 5. Resultant to the above discussion, the Tribunal order,
1 (2021) 431 ITR 1 (SC) 2 (2022) 442 ITR 141 (Ker)
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Appeal order and Assessment Orders are set aside. The matters are remitted to Assessing Officer for disposal afresh.
The Income Tax Appeals are allowed, and the matter is remitted to Assessing Officer as indicated above.
Sd/- S.V.BHATTI JUDGE
Sd/- BASANT BALAJI JUDGE
jjj
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APPENDIX OF ITA 174/2019
PETITIONER ANNEXURES ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER DATED 30-11- 2016 FOR THE YEAR 2014015 ISSUED TO THE APPELLANT ANNEXURE B TRUE COPY OF THE ORDER DATED 18-04-2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS) ISSUED TO THE APPELLANT. ANNEXURE C TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 15-10-2018
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APPENDIX OF ITA 115/2019
PETITIONER ANNEXURES ANNEXURE-A TRUE COPY OF THE ASSESSMENT ORDER DATED 29.9.2015 FOR THE YEAR 2013-14 ISSUED TO THE APPELLANT ANNEXURE-B TRUE COPY OF THE ORDER DATED 18.43.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS) ISSUED TO THE APPELLANT ANNEXURE-C TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 15.10.2018