TMI Blog2016 (5) TMI 1545X X X X Extracts X X X X X X X X Extracts X X X X ..... e the meaning assign to it in chapter V of the Banking Regulation Act, 1949. A cooperative bank is defined in section 5(cci) of the Banking Regulation Act to mean a state cooperative bank, a central cooperative band and a primary cooperative bank. Admittedly, the assessee is neither a state cooperative bank nor central cooperative bank but a cooperative society. So far as the contention of the Revenue that the assessee deals with non-members is concerned, we are of the view that section 80P(1) restrict the benefit of deduction of income of cooperative society to the extent it is earned by providing credit facilities to its members, therefore, to the extent of income earned is attributable to the dealings with non-members are concerned, the benefit of section 80P will not be available, thus, while giving effect to the order, the authorities would restrict the benefit of deduction u/s 80P only to the extent that the same is earned by the appellant in carrying on its business of providing credit facilities to its members. With this rider, the appeal of the assessee is allowed. - I.T.A. No. 2936, 3414/MUM/2014 - - - Dated:- 23-5-2016 - Shri Joginder Singh AND Shri Rajendra, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue and granted relief to the assessee vide his discussion in para 3 and its sub-paras of his order. CIT (A) explained in the light of various decisions. On perusal of the same and after hearing both the parties, we find that the order of the CIT (A) on this issue is fair and reasonable. All such societies are not banks. Reference is made to the discussion at paras 4 and 5 of this order. Therefore, in our opinion, there is no need to interfere with the decision of the CIT (A). Accordingly, grounds raised by the Revenue are dismissed. 3. In the result, appeal of the Revenue is dismissed. ITA No.341S/M/2014 (By assessee) 4. This appeal filed by the assessee on 13.5.2014 against the said order of the CIT (A)-26, Mumbai. The issue raised in this appeal relates to the allowability of deduction of interest and dividend u/s 80P(2)(d) of the Act. As per the assessee, the cooperative banks are cooperative societies and they are not bank as defined in the in the Banking Regulation Act, 1969. On this issue, assessee relied on various decisions as well as the coordinate Bench decision in the case of ITO vs. M/s. RCF Employees Cooperative Credit Society Ltd in ITA Nos. 6903 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principle of consistency, we are of the opinion that the assessee is entitled to relief. Accordingly, Grounds raised by the assessee are allowed. 7. In the result, appeal of the assessee is allowed. 8. Conclusively, Revenue's appeal is dismissed and the appeal of the assessee is allowed. We find that in the aforesaid order, the Tribunal has placed reliance upon the decision of the coordinate Bench in the case of ITO vs M/s R.C.F. Employees Cooperative Credit Society Ltd. (ITA Nos.6903 7465/Mum/2013) order dated 29/01/2016. In that case, the decision from Hon ble jurisdictional High Court in the case of Quepem Urban Cooperative Credit Society Ltd. vs ACIT (2015) 377 ITR 272 (Bom.) was discussed. Considering the aforesaid decision and the contention raised from both sides, the facts being similar, we find no infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal), therefore, the appeal of the Revenue is having no merit, consequently, dismissed. 3. Now, we shall take up the appeal of the assessee (ITA No.3414/Mum/2014), wherein, the only ground agitated by the assessee is with respect to not allowing deduction of interest and dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are that the assessee filed the return of income declaring the total income of Rs. NIL after claiming deduction u/s 80P of the Act for an amount of ₹ 40,13,467/-. The case was scrutinized under CASS and the notices u/s 143(1) 143(2) were issued and the assessment was completed u/s 143(3) of the Act determining the assessed income at ₹ 40,13,470/- wherein the AO disallowed ₹ 40,13,467/- against the said claim of deduction u/s 80P of the Act. Aggrieved, assessee carried the matter in appeal before the first appellate authority. 3. During the proceedings before the first appellate authority, after considering the submissions of the assessee, CIT (A) allowed the appeal. Aggrieved with the said decision of the CIT (A), Revenue is in appeal before the Tribunal by raising the above mentioned grounds. 4. During the proceedings before us, at the outset, Ld Counsel for the assessee brought our attention to ground no.1, which is the only effective ground to be adjudicated, and submitted that the assessee is a credit cooperative society and claimed deduction u/s 80P(2)(a)(i) of the Act. However, Assessing Officer treated the same as cooperative bank . On appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the decision from Hon ble jurisdictional High Court in Quepem Urban Cooperative Credit Society (2015) 58 taxman.com 113 (Bom.), we find merit in the contention of the assessee. In another case in ITO vs M/s Hooseini Co-op. Credit Society Ltd. (ITA No2965/M/2014 and 3556/Mum/2014) order dated 09/02/2016, it was held as under:- 2. The assessee is a Co-operative Society and Registered under the Co- operative Societies Act, 1960. The object of the Society is to enable its members to sale their earning and to obtain loan from the Society. 3. The issue contested by the revenue relates to the claim for deduction u/s 80P of the Act. The assessee claimed deduction u/s 80P((2)(a)(i) of the Act. The AO took the view that the assessee falls under the category of Co-operative Bank and accordingly by following the provisions of section 80P(4) rejected the claim for deduction u/s 80P of the Act. The ld. CIT(A), however, allowed the claim of the assessee and hence the revenue has filed this appeal before us. 4. We have heard the parties on this issue and perused the record. The ld. AR placed reliance on the decision of the Hon'ble Bombay High Court in the case of Quepe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the interest income earned from deposits kept with bank shall form part of Business Income . Accordingly, the deduction u/s 80P of the Act is allowable to the interest income as per the decision passed by the Hon'ble Karnataka High Court. Accordingly, we set aside the order of the ld.CIT(A) on this issue and direct the AO to assess the interest income under the head Income from business and accordingly allow the deduction u/s 80P of the Act. 8. In the result, the appeal filed by the assessee is allowed and the appeal of the revenue is dismissed. 3.3. In view of the explanation/claim of the ld. Counsel for the assessee that the disputed amounts from the alleged banks are not investment but is a current account and the finding of the ld. Commissioner of Income Tax (Appeals) for Assessment Year 2012-13 and also in the absence of any contrary decision more specifically from the Revenue side, the assessee being a cooperative society, therefore, providing credit facilities to its members is an allowable deduction u/s 80P(2) of the Act. However, in terms of section 80P, the meaning of the words cooperative Bank has to be the meaning assign to it in chapter V ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
