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Income Tax Appellate Tribunal, MUMBAI
Before: SHRI SANJAY ARORA & SHRI RAM LAL NEGI
ORDER राम लाल नेगी, �या�यक सद�य: PER RAM LAL NEGI, (Judicial Member): This appeal is directed against order dated 06.01.2014 passed by the CIT(A)-24, Mumbai for the assessment year 2010-11.
Brief facts of the case are that assessee is a Co-operative Credit Society registered under the Maharashtra Co-operative Society Act,
2 अ�नासाहेब पा�टल माथाड़ी कामगार सहकार� पटपेढ़� �ल�मटेड Annasaheb Patil Mathadi Kamgar Sahakari Patpedhi Ltd ITA 2515/Mum/2014 1960 and filed its return of income for the relevant assessment year declaring total income of Rs. “Nil”. After the scrutiny, the AO determined the gross total income of the assessee at Rs.7,24,81,010/-disallowing deduction of Rs.1,39,23,333/- claimed under section 80P(2)(d) of the Income Tax Act, 1961 (in short the Act) as well as Rs.5,85,57,676/- claimed under section 80P(2)(a)(i) of the Act. The AO examined the assessee’s claim of deductions aforesaid in the light of the provisions of section 80P (4) of the Act, introduced w.e.f. 01.04.2007, and made disallowances aforesaid holding that the assessee was carrying on banking business.
The assessment order was challenged by the assessee before the first appellate authority, inter alia, on the ground that the AO has wrongly added the deduction claimed under section 80P(2)(a)(i) and under section 80P(2)(d) of the Act and has wrongly concluded that the amendment to section 80P(4) introduced w.e.f. 01.04.2007 by the Finance Act, 2006 clearly bars all co-operative Banks other than primary agricultural credit society or a primary co-operative agricultural and rural development banks from claiming exemptions under the said sections
The Ld. CIT(A) after hearing the assessee allowed the aforesaid grounds of appeal of the assessee, holding the assessee as a Co- operative Credit Society and not a Co-operative Bank within the meaning of Banking Regulation Act, 1949 and Banking Companies Act, to attract section 80P(4) of the Act. Since the assessee is carrying on the business of extending credit facility to its Members only, it cannot be treated as a Co–operative Bank. Accordingly, the 3 अ�नासाहेब पा�टल माथाड़ी कामगार सहकार� पटपेढ़� �ल�मटेड Annasaheb Patil Mathadi Kamgar Sahakari Patpedhi Ltd ITA 2515/Mum/2014 Ld. CIT(A) deleted the additions made by the AO under section 80P(2)(d) and 80P(2)(a)(i) of the Act.
5. Dissatisfied with the impugned order of the Ld. CIT(A), the revenue is in appeal before the Tribunal on the following effective grounds:- “(i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO amounting to Rs.5,85,57,676/- u/s.80P(2)(a)(i) and Rs.1,39,23,333/- u/s.80P(2)(d) of the I.T. Act even though assessee was carrying on banking business. (ii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the fact that amendment to Sec.80P(4) inserted w.e.f. 1.4.2007 by Finance Act, 2006 clearly bans all the co-operative banks other than primary agricultural credit society or a primary co-operative agricultural and rural development banks from claiming exemption under this section”.
6. Before us, the Ld. DR relying upon the assessment order submitted that, the CIT(A) has wrongly deleted the addition made by the AO amounting to Rs.5,85,57,676/- under section 80P(2)(a)(i) and Rs.1,39,23,333/- under section 80P(2)(d) of the Act ignoring the fact that the assessee was carrying on the banking business and the amendment to section 80P(4) introduced w.e.f. 01.04.2007 by the Finance Act, 2006 clearly bars all the co-operative banks other than Primary Agricultural Credit Society or Primary Co-operative Agricultural & Rural Development Banks from making claim under 4 अ�नासाहेब पा�टल माथाड़ी कामगार सहकार� पटपेढ़� �ल�मटेड Annasaheb Patil Mathadi Kamgar Sahakari Patpedhi Ltd ITA 2515/Mum/2014 the aforesaid sections. Since, the assessee does not fall under any of the exceptions, the findings of the Ld. CIT(A) are contrary to the provisions of law and, accordingly, are liable to be set aside.
7. On the other hand, the Ld. AR submitted that the Ld. CIT(A) has rightly held that section 80P(4) is not applicable in case of Co-op. Credit Society extending credit facilities to its Members. The Ld. AR invited our attention to the decision rendered on 21.8.2015 by co- ordinate Bench of ITAT Mumbai, in the matter of M/s Kulswami Co- operative Society, for the assessment year 2009-10 and in Cross Objection No.05/Mum/2014 vide which the similar issue was decided in favour of the assessee. The Ld. AR further submitted that the assessee’s case is squarely covered by the decision of Mumbai ITAT in the aforesaid case.
We have gone through the decision of ‘A’ Bench of the Mumbai Tribunal rendered in the case of M/s Kulswami Co-operative Society (supra) to find that the co-ordinate Bench, relying on an earlier decision of the Bench in Kulswami Co-operative Society (ITA Nos. 3223/Mum/2011 for the assessment year 2007-08 and for assessment year 2008-09), held that assessee Co-operative Society does not fall within the restriction placed in sub-section (4) of section 80P of the Act, and decided the identical issue in favour of the assessee.
We are, therefore, of the considered view that the issue arising in the present case is identical to the issue decided by the co- ordinate Bench in Kulswami Co-operative Society (supra). Following the consistent view taken on the identical issue, we respectfully
5 अ�नासाहेब पा�टल माथाड़ी कामगार सहकार� पटपेढ़� �ल�मटेड Annasaheb Patil Mathadi Kamgar Sahakari Patpedhi Ltd ITA 2515/Mum/2014 follow the same and hold that the assessee Co-operative society does not fall within the restriction placed under sub-section (4) of section 80P of the Act. Accordingly, we decide both the grounds of appeal against the Revenue and in favour of the assessee.
10. In the result, appeal of the revenue is dismissed.
Order pronounced in the open court on 20th May, 2016.
Sd/- Sd/- (संजय अरोरा संजय अरोरा) (राम लाल नेगी) संजय अरोरा संजय अरोरा लेखा सद�य लेखा सद�य लेखा सद�य लेखा सद�य �याियक सद�य �याियक सद�य �याियक सद�य �याियक सद�य (SANJAY ARORA) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Date: 20th May, 2016 ��त/Copy to:- 1) अपीलाथ� /The Appellant. 2) ��यथ� /The Respondent. 3) The CIT(A) -24, Mumbai. 4) The CIT–13, Mumbai. 5) िवभागीय �ितिनिध “ए”, आयकर अपीलीय अिधकरण, मुंबई/ 6) The D.R. “A” Bench, Mumbai. 7) गाड� फाईल \ Copy to Guard File. आदेशानुसार/By Order