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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI RAJENDRA, AM & SHRI RAVISH SOOD, JM
आदेश / O R D E R
PER RAVISH SOOD, JUDICIAL MEMBER:
The present appeal filed by the revenue is directed against the order passed by the CIT(A)-51, Mumbai, dated 28.09.2016, which in itself arises from the order passed by the A.O under Sec. 143(3) of the Income tax Act, 1961(for short „Act‟), dated 17.03.2016 for A.Y 2013-14. The revenue
P a g e | Income tax Officer 24(4) Vs. Citiscape Co-op. Hsg. Soc. Ld. assailing the order of the CIT(A) had raised before us the following grounds of appeal:- “1. Whether on the facts and in the circumstances of the case and in law the Hon’ble CIT(A) was right in allowing deduction u/s.80P(2)(d) of the I. T. Act, 1961, of Rs.67,43,445/- without appreciating the fact the assessee has earned interest from investment with Co-operative banks.
2. Whether on the facts and in the circumstances of the case and in law the Hon’ble CIT(A) erred in not considering the inserted section 80P(4) of the I.T. Act, 1961, which specifically provides that this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or primary co-operative agricultural and rural development bank.
3. T h e a p p e l l a n t p r a y s t h a t t h e o r d e r o f t h e C I T (Appeals) on the above grounds be set aside and that of the A.O be restored.
4. The appellant craves leave to amend or alter any ground or to submit additional new ground which may be necessary.”
Briefly stated, the facts of the case are that the assessee which is a Co-operative Housing Society had e-filed its return of income for A.Y. 2013- 14 on 16.03.2013, declaring total income of Rs.nil after claiming deduction under Sec. 80P(2)(d) of Rs.67,43,528/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. The case of the assessee was thereafter selected for scrutiny assessment under Sec. 143(2).
During the course of the assessment proceedings, it was observed by the A.O that the assessee had during the year under consideration received interest from co-operative bank of Rs.67,43,445/- and interest from nationalized bank of Rs. 83/-. The assessee has claimed deduction under Sec.80P(2)(d) of the Act at Rs.67,43,445/- and under Sec.80P(2)(c) of Rs.83/-. The A.O observed that the assessee had claimed deduction under Sec. 80P(2)(d) of the Act at Rs.67,43,445/- and deduction under Sec. 80P(2)(c) of Rs.83/-. The A.O holding a conviction that the interest of Rs.67,43,445/- received by the assessee from a co-operative bank and not P a g e | Income tax Officer 24(4) Vs. Citiscape Co-op. Hsg. Soc. Ld. from any co-operative society would not be entitled for claim of deduction under Sec. 80P(2)(d), therefore, disallowed the claim of deduction so raised by the assessee.
Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions advanced by the assessee, was persuaded to be in agreement with him that as a co-operative bank is always registered under the relevant co-operative societies Act of the relevant State, therefore, the deduction claimed by the assessee under Sec.80P(2)(d) of the Act had wrongly been declined by the A.O for the reason that a co-operative Bank is not a co-operative society. The CIT(A) further taking support of certain orders of the coordinate benches of the Tribunal taking a similar view, thus directed the A.O to allow the claim of deduction of Rs.67,43,445/- raised by the assessee under Sec.80P(2)(d) of the Act.
The revenue being aggrieved with the order of the CIT(A) had carried the matter in appeal before us. The ld. Authorized Representative (for short „A.R‟) at the very outset of the hearing of the appeal submitted that the issue involved in the present appeal as to whether the interest on deposits with a co-operative Bank would be eligible for deduction under Sec. 80P(2)(d) of the Act, or not, had been deliberated upon and decided in the favour of the assessee by the ITAT, “SMC” bench, Mumbai in the assessee‟s own case, viz. ITO-24(1)(4), Mumbai Vs. M/s Citiscape Co-op. Housing Society Ltd., Mumbai (ITA No. 5435 and 5436/Mum/2017, AY‟s 2011-12 & 2012-13), dated 08.12.2017. Per contra, the ld. Departmental Representative (for short „D.R‟) did not controvert the aforesaid contention raised by the ld. A.R.
We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We have given a thoughtful consideration to the issue before us and are persuaded to be in agreement with the view taken by the CIT(A) that as a co-operative Bank is always registered under the relevant co-operative
P a g e | Income tax Officer 24(4) Vs. Citiscape Co-op. Hsg. Soc. Ld. Societies Act of the relevant State, therefore, the claim of deduction under Sec. 80P(2)(d) on the interest income of Rs.67,43,445/- received by the assessee from the co-operative Bank was well in order. Rather, in this regard it would be relevant to observe that Sec. 2(19) defining a “co-operative Society” categorically takes within its sweep a co-operative Society registered under the co-operative Societies Act, 1992 (2 of 1912) or under any other law for the time being in force in any State for the registration of co- operative Societies. We thus are of the considered view that as a co-operative Bank is a co-operative Society, therefore, the CIT(A) had rightly concluded that the interest income of Rs.67,43,445/- received by the assessee from the Co-operative Bank would duly be entitled for claim of deduction under Sec. 80P(2)(d) of the Act.
We further find that as averred by the ld. A.R, the issue under consideration before us is squarely covered by the order of the ITAT “SMC” Bench, Mumbai, in the assessee‟s own case for A.Y‟s 2011-12 & 2012-13, i.e ITO-24(1)(4), Mumbai Vs. M/s Cityscape Co-op. Housing Society Ltd., Mumbai (ITA No. 5435 and 5436/Mum/2017), dated 08.12.2017 (copy placed on record). The Tribunal while deliberating on the entitlement of the assessee towards claim of deduction under Sec. 80P(2)(d) on the interest income received from a Co-operative Bank had observed as under:
“10. Thus, I notice that there are divergent views on this matter. The Hon'ble Karnataka High Court has expressed the view that the deduction u/s 80P(2)(d) would not be available in respect of interest income received from co- operative bank, whereas the Hon'ble HimachaI Pradesh High Court has held that the said deduction would be available. The Hon'ble Supreme Court has held in the case of Vegetable Products Ltd. (88 ITR 192) that if two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted. By applying the said principle, the view taken by Hon’ble Himachal Pradesh High Court, which is in favour of the assessee, is required to be adopted in this case. Accordingly I hold that the interest income earned by the assessee from Co- operative banks, which are basically co-operative societies carrying on banking business, is deductible u/s 80P(2)(d) of the Act. On this reasoning, I uphold the decision taken by Ld. CIT(A) in both the years on this issue.
P a g e | Income tax Officer 24(4) Vs. Citiscape Co-op. Hsg. Soc. Ld. We thus in terms of our aforesaid observations, finding ourselves to be in agreement with the view taken by the Tribunal in the assessee‟s own case, thus, uphold the order passed by the CIT(A).
The appeal filed by the revenue is dismissed. Order pronounced in the open court on 09.05.2018 Sd/- Sd/- (Rajendra) (Ravish Sood) ACCOUNTANT MEMBER JUDICIAL MEMBER भुंफई Mumbai; ददनांक 09.05.2018 Ps. Rohit आदेश की प्रनिलऱपि अग्रेपषि/Copy of the Order forwarded to : 1. अऩीराथी / The Appellant 2. प्रत्मथी / The Respondent. 3. आमकय आमुक्त(अऩीर) / The CIT(A)- आमकय आमुक्त / CIT 4. ववबागीम प्रतततनधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, 5. ITAT, Mumbai 6. गार्ड पाईर / Guard file. सत्मावऩत प्रतत //True Copy// आदेशधिुसधर/ BY ORDER, उि/सहधयक िंजीकधर (Dy./Asstt. Registrar) आयकर अिीऱीय अधर्करण, भुंफई / ITAT, Mumbai
P a g e | Income tax Officer 24(4) Vs. Citiscape Co-op. Hsg. Soc. Ld.