CENTRAL BANK NATIONAL EMPLOYEES COOPERATIVE CREDIT SOCIETY LTD.,KOLKATA vs. ITO, WARD - 34(3), KOLKATA, KOLKATA

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ITA 1050/KOL/2018Status: DisposedITAT Kolkata12 October 2018AY 2014-153 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal upheld the disallowance of Section 80P deduction on rental and bank interest income based on previous precedents. However, it allowed the appeal for statistical purposes to re-examine the disallowance using the netting principle.

What were the facts?

The assessee, a cooperative credit society, claimed Section 80P deduction on rental and bank interest income. The Assessing Officer disallowed the deduction, and the CIT(A) upheld this. The assessee argued for the netting principle regarding expenses.

What were the issues?

Whether Section 80P deduction is allowable on rental and bank interest income, and if the netting principle should be applied for disallowances.

Which sections of the Income-tax Act were involved?

Section 80P

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Income Tax Appellate Tribunal, “SMC” BENCH : KOLKATA

Before: Hon’ble Shri S.S. Godara, JM]

Hearing: 18.09.2018
1.

This assessee’s appeal for assessment year 2014-15 is directed against the CIT(A)- 10, Kolkata’s order dated 09.02.2018 passed in case no. 149/CIT(A)-10/W-34(3)/2014- 15/2016-17/Kol, involving proceedings u/s 143(3) of the Income Tax Act, 1961 ( in short the ‘Act’). Heard both the parties. Case file perused.

2.

The assessee’s first substantive ground seeks to claim section 80P deduction regarding its rental income of Rs. 54,100/-. Learned counsel is very fair in taking me to CIT(A)’s order in page 3 para 6.2 that a co-ordinate bench has already declined the very relief in assessment year 2012-13. I therefore uphold the CIT(A)’s findings under challenge.

Central Bank National Employees Co. Operative Credit Society Ltd. A.Yr. 2014-15 3. Next comes assessee similar section 80P claim regarding interest income received from banks. Mr. Surana submits herein as well that the assessee has admittedly derived its interest income from investments in banks and financial institutions which is not entitled for the impugned deduction as per hon’ble jurisdictional high court’s decision in CIT vs. South Eastern Railway Co-operative Credit Society India Ltd. [2017] 390 ITR 524 (Cal). I therefore affirm the CIT(A)’s findings under challenge in principal qua this latter issue as well.

4.

Mr. Surana at this stage submits that the assessee’s only prayer in given facts and circumstances of the case is that the Assessing Officer ought to have followed netting principle whilst invoking the impugned disallowance of deduction. The Revenue is very fair in not disputing the correctness of such a netting exercise. I therefore restore the instant appeal back to the Assessing Officer to re-compute the impugned Section 80P deduction disallowance after following netting formula vis-à-vis the corresponding expenditure. The assessee’s twin grounds are partly accepted for statistical purposes.

5.

This assessee’s appeal is partly allowed for statistical purposes.

Order pronounced in the Court on 12.10.2018

Sd/ [ S.S.Godara ] Judicial Member Dated : 12.10.2018 SB, Sr. PS

Central Bank National Employees Co. Operative Credit Society Ltd. A.Yr. 2014-15 Copy of the order forwarded to:

1. 1. Central Bank National Employees Co. operative Credit Society Ltd., Raja Bhawan, 111, C.R.Avenue, Kolkata-700073.

2. ITO, Ward-34(3), Kolkata, Aayakar Bhawan Poorva, 110, Shanti Pally, Near Ruby Hospital, E.M. Bye Pass, Kolkata-700107. 3..C.I.T(A).- 4. C.I.T.- Kolkata.

5. CIT(DR), Kolkata Benches, Kolkata.

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