TMI Blog2021 (8) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... n the order of learned CIT(A). Hence, we uphold the same. Disallowance of deduction u/s 80P(2)(d) made by the CPC Bangalore is beyond the scope of provisions of section 143(1) - Whether as per section 143(1)(a)(ii) of the Act an incorrect claim can be disallowed if such incorrect claim is apparent from any information in the return? - HELD THAT:- We do not find any infirmity in the order of learned CIT(A). We note that claim was due and proper. There was no reason that CPC would disallow the same. The date of filing of return being extended by CBDT, no adverse inference can be drawn that the assessee could not be eligible for deduction and claim which are allowable if return are filed within due date. The extension of due date makes the assessee eligible for all the claims, which are allowable when the return is filed within due date. Moreover, as rightly noted by learned CIT(A) in any case this was not something which could be denied under section 143(1) of the Act. Hence, we uphold the same. - I.T.A. No. 7325 to 7327/Mum/2019 - - - Dated:- 9-8-2021 - Shri Shamim Yahya (AM) And Shri Amarjit Singh (JM) For the Assessee : Shri Yogesh Thar For the Department : Ms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rual basis. Out of above, corpus fund of ₹ 1.50 crore was received in AY 2011-12 on execution of agreement and the balance ₹ 11.50 crore was payable to the society on the expiry of 30 months from the possession date. It was also agreed that Kalpataru shall also pay interest @ 12 5 % per annum calculated from possession date till the actual payment date. Possession late was 31.03.2011. Hence, according to the assessee, the sum of ₹ 11.50 crore was only due on or after 30.09.2013. Total sum of ₹ 15,53,97,935/- was receive from Kalpataru on 07.01.2014. As per assessee, the interest on ₹ 11.50 crore was properly reported and offered in AY 2014-15. 5. However, the AO taxed interest on accrual basis @ 12.5 % on ₹ 11.50 crore which comes to ₹ 1,43,75,000/- following the order for AY 2011-12. The assessee had earned interest income of ₹ 63,95,051/- from its investments with the co-operative banks and had claimed deduction u/s 80P(2)(d) for the same. The AO disallowed deduction of ₹ 63,95,051/-u/s 80P(2)(d) for the following reasons: a) A co-operative bank is a commercial bank and does not fall under the purview of a 'co-operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to deduction u/s 80P(2)(d) on interest and dividend earned from its investment with co-operative banks. a) Kliandas Udyog Bhavan Premises Co-operative Society Ltd. vs. ITO (2018) 94 Taxmann.com 15 (Mumbai- Trib) b) Lands End Co-operative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 c) Sea Grean Co-operative Housing Society Ltd. Vs ITO 21(3)(2), Mumbai (ITA No. 1343/Mum/2017 dated 31.03.2017. d) Merwanjee Cama Park Co-operative Housing Society Ltd. Vs. ITO (ITA No. 6139/Mum/2014, dated: 27.09.2017. It has been noted that there are conflicting decisions of non-jurisdictional High Courts. The decision of the Bombay High Court in case of K. Subramanian Vs. Siemens India Ltd. [1983] 15 Taxman 594 [1985] 156 ITR 11 (Bom) was referred to by the Tribunal in the case of Kaliandas Udyog Bhavan Premises Co-operative Society Ltd. supra), where it has been held that if there is a conflict between decisions of non-jurisdictional High Courts, then a view which is in favour of the assessee is to be preferred as against that taken against him. It has been also held in the aforesaid decisions of the Tribunal that the adjudication of the Supreme Court in case of Totgars Cooperative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gesh Thar had argued that insofar as claim of deduction u/s. 80P of the Act is concerned, the same is covered in Assessee's favour by the decision of the Hon Jurisdictional Mumbai Tribunal in Assessee's own case for AY 2011-12 (ITA No. 896/M/2016, order dated February 17, 2017 (copy has been already filed in the factual paperbook on 21.05.2021). 2. During the course of the hearing, it fell from the Hon Bench that there is a recent full bench decision of the Hon Supreme Court wherein the Hon Supreme Court has elaborately dealt with the issue of allowability of s. 80P deduction in the context of different types of co-operative societies that are entitled to claim the said deduction. Accordingly, the Hon'ble Bench desired that the Assessee may furnish a note in the matter and the matter was treated as heard. 3. In deference to the aforesaid, we are filing this note together with a copy of the said decision of the Hon Supreme Court in the case of The Mavilayi Service Cooperative Bank Ltd. Ors. Vs. CIT, Calicut Ors. (Civil Appeal Nos. 7343-7350 of 2019 dated 12.1.2021)(copy attached at Annexure 1 to this note). The crux of the said decision is that provisions of s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receivable as corpus from developers on the alleged ground that the interest u/s 12.50% is due and since the assessee is following mercantile system of accounting, the said interest is chargeable to tax? 2. Whether in circumstances of the case and in law the Ld. CIT (A) was justified in holding that the Registrar of Co-operative Housing Society had not cancelled the registration of the Housing Society on the alleged violation of principle of mutuality or bye law, without appreciating the facts that co-operative bank is a commercial bank and does not fall under the purview of a Co-operative Society referred in section 80P(2)(d) of the Income tax Act, 1961 . 13. Since the issues are identical to A.Y. 2012-13, our adjudication for A.Y. 2012-13 applies mutatis mutandis for this year A.Y. 2013-14 also. 14. Grounds of appeal for A.Y. 2015-16 read as under : 1. Whether on the facts and circumstances of the case and in law the Ld. CIT (A) was justified in holding that the disallowance of deduction u/s 80P(2)(d) of the Income tax Act, 1961 made by the CPC Bangalore is beyond the scope of provisions of section 143(1) of the Act without appreciating the fact that as per sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s provided by the taxpayer in return of income. Therefore, neither any arithmetical error in the return nor any incorrect claim apparent from any information in the return is found in this case. The specific circumstances for making disallowance mentioned u/s 143(1) are also not applicable in this case. Therefore, it is held that making adjustment by disallowing deduction of ₹ 2,15,31,450/- u/s 80P is not justified as the same are beyond the scope of provisions of section 143(1) and hence, the AO is directed to allow deduction of ₹ 2,15,450/- to the appellant u/s 80P. 25. The CBDT vide order dated 1.10.2015 has extended the due date of filing return of income due on 30.09.2015 to 31.03.2015. As the accounts of the appellant was required to be audited under the Co-operative Act and its original due date was 30.09.2015, the benefit of extension was available to the appellant. Hence, it is held that the return filed on 27/10/2015 was a return within due date as per section 139(1). Therefore, the interest levied u/s 234A is hereby deleted. It is also held that the interest u/s 234C is to be levied on returned income and not on assessed income. So far, charging of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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