Anand Urban Cooperative Credit Society Ltd. v. ITO

Case Laws Analysis
REFERRED Bhagyalaxmi Nagri Sahakari Patsanstha Meryadit v. ITO 2022 TaxPub(DT) 2197 (Pune-Trib)
REFERRED Rena Sahakari Sakhar Karkhana Ltd. v. Pr. CIT 2022 TaxPub(DT) 0787 (Pune-Trib)
REFERRED Solitaire CHS Ltd. v. Pr. CIT 2019 TaxPub(DT) 8002 (Mum-Trib)
REFERRED Majalgaon Sahakari, Sakhar Karkhana Ltd. v. ACIT 2019 TaxPub(DT) 2137 (Pune-Trib)
REFERRED Kaliandas Udyog Bhavan Premises Co-op Society Ltd. v. ITO 2018 TaxPub(DT) 3128 (Mum-Trib)
REFERRED Pr. CIT v. Totagars Co-operative Sale Society 2017 TaxPub(DT) 1748 (Karn-HC)
REFERRED Principal CIT & Anr. v. Totagars Co-Operative Sale Society 2017 TaxPub(DT) 0677 (Karn-HC)
REFERRED State Bank of India (SBI) v. Commissioner of Income-tax 2016 TaxPub(DT) 3564 (Guj-HC)
REFERRED K. Subramanian & Anr. v. Siemen’S India Ltd. & Anr. 1985 TaxPub(DT) 0158 (Bom-HC)

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The Tax Publishers2024 TaxPub(DT) 1149 (Pune-Trib) IN THE ITAT, PUNE BENCH SATBEER SINGH GODARA, J.M. Anand Urban Cooperative Credit Society Ltd. v. ITO ITA No. 136/PUN/2024 28 February, 2024 Appellant by: Santosh B Garud Respondent by: B.S. Rajpurohit ORDER *Satbeer Singh Godara, J.M.* This assessees appeal for assessment year 2018-19, arises against the National Faceless Appeal Centre (in short the NFAC) Delhis Din & Order No. ITBA/NFAC/S/250/2023-24/1058241571(1), dated 26-11-2023, involving proceedings under section 143(3) of the Income Tax Act, 1961 (in short the IT Act). Heard both the parties at length. Case file perused. 2. The assessee pleads the following substantive grounds in the instant appeal: 1. On the facts and circumstances of the case and in law, the learned Commissioner (Appeals) has erred by confirming the disallowance of the deduction under section 80(P)(a)(i) of the Income Tax Act, amounting to Rs. 23,62,370 by the learned assessing officer on the ground that Interest earned on Investment made in other Cooperative societies/Nationalized/Scheduled Bank by the appellant is liable to be taxed under the Head of Income from Other Sources and not Income from Profits and Gains from Business/Profession which is eligible for deduction under section 80(P)(a)(i). 2. On the facts and circumstances of the case and in law, the learned Commissioner (Appeals) has erred by confirming the direct addition to the income of Appellant gross commission earned from MSEDCL of Rs. 15,24,810 instead of considering the direct expenses of Rs. 16,35,798 incurred in running the MSEDCL bill collection center which in turn results into net loss of Rs. 1,03,539. 3. The Appellate craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of the appeal, if deemed necessary at the time of hearing of the appeal. 3. Coming to the first and foremost issue of section 80P(2)(a)(i) deduction of Rs. 23,62,370; there is hardly any dispute that both the learned lower authorities have declined the same by holding that it represents interest derived from various other co-operative societies/Nationalised/scheduled banks. It is found that the instant issue is no more res integra in light of this tribunals recent coordinate benchs Order ITA No. 1249/PUN/2018 dated 7-1-2022 : 2022 TaxPub(DT) 0787 (Pune-Trib) in The Rena Sahakari Sakhar Karkhana Ltd. v. Pr. CITs case has rejected the Revenues identical arguments as follows: 3. After culmination of the assessment proceedings, the Principal Commissioner called for the assessment records of the assessee. It was observed by the Principal Commissioner that the assessee had during the year shown interest income from FDs with Co-operative Banks amounting to Rs. 75,38,534, against which it had claimed deduction under section 80P(2)(d) of the Act. It was observed by the Principal Commissioner, that the assessing officer while framing the assessment had allowed the aforesaid claim of deduction raised by the assessee. Observing, that as co-operative banks were commercial banks and not a co-operative society, therefore, the Principal Commissioner was of the view that the assessee was not eligible for claim of deduction under section 80P(2)(d). In the backdrop of his aforesaid conviction, the Principal Commissioner was of the view that the assessment order passed by the assessing officer under section 143(3), dated 7-3-2016, therein allowing the assesses claim for deduction under section 80P(2)(d), had therein rendered his order as erroneous, insofar it was prejudicial to the interest of the revenue. Accordingly, the Principal Commissioner not finding favour with the reply of the assessee, wherein the latter had tried to impress upon him that it was duly eligible for claim of deduction under section 80P(2)(d) of the Act, therein set aside the order of the assessing officer with a direction to redecide the issue afresh and reframe the assessment. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 1149 (Pune-Trib)

IN THE ITAT, PUNE BENCH

SATBEER SINGH GODARA, J.M.

Anand Urban Cooperative Credit Society Ltd. v. ITO

ITA No. 136/PUN/2024

28 February, 2024

Appellant by: Santosh B Garud

Respondent by: B.S. Rajpurohit

ORDER

Satbeer Singh Godara, J.M.

This assessees appeal for assessment year 2018-19, arises against the National Faceless Appeal Centre (in short the NFAC) Delhis Din & Order No. ITBA/NFAC/S/250/2023-24/1058241571(1), dated 26-11-2023, involving proceedings under section 143(3) of the Income Tax Act, 1961 (in short the IT Act).

Heard both the parties at length. Case file perused.

2. The assessee pleads the following substantive grounds in the instant appeal:

1. On the facts and circumstances of the case and in law, the learned Commissioner (Appeals) has erred by confirming the disallowance of the deduction under section 80(P)(a)(i) of the Income Tax Act, amounting to Rs. 23,62,370 by the learned assessing officer on the ground that Interest earned on Investment made in other Cooperative societies/Nationalized/Scheduled Bank by the appellant is liable to be taxed under the Head of Income from Other Sources and not Income from Profits and Gains from Business/Profession which is eligible for deduction under section 80(P)(a)(i).

2. On the facts and circumstances of the case and in law, the learned Commissioner (Appeals) has erred by confirming the direct addition to the income of Appellant gross commission earned from MSEDCL of Rs. 15,24,810 instead of considering the direct expenses of Rs. 16,35,798 incurred in running the MSEDCL bill collection center which in turn results into net loss of Rs. 1,03,539.

3. The Appellate craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of the appeal, if deemed necessary at the time of hearing of the appeal.

3. Coming to the first and foremost issue of section 80P(2)(a)(i) deduction of Rs. 23,62,370; there is hardly any dispute that both the learned lower authorities have declined the same by holding that it represents interest derived from various other co-operative societies/Nationalised/scheduled banks. It is found that the instant issue is no more res integra in light of this tribunals recent coordinate benchs Order ITA No. 1249/PUN/2018 dated 7-1-2022 : 2022 TaxPub(DT) 0787 (Pune-Trib) in The Rena Sahakari Sakhar Karkhana Ltd. v. Pr. CITs case has rejected the Revenues identical arguments as follows:

3. After culmination of the assessment proceedings, the Principal Commissioner called for the assessment records of the assessee. It was observed by the Principal Commissioner that the assessee had during the year shown interest income from FDs with Co-operative Banks amounting to Rs. 75,38,534, against which it had claimed deduction under section 80P(2)(d) of the Act. It was observed by the Principal Commissioner, that the assessing officer while framing the assessment had allowed the aforesaid claim of deduction raised by the assessee. Observing, that as co-operative banks were commercial banks and not a co-operative society, therefore, the Principal Commissioner was of the view that the assessee was not eligible for claim of deduction under section 80P(2)(d). In the backdrop of his aforesaid conviction, the Principal Commissioner was of the view that the assessment order passed by the assessing officer under section 143(3), dated 7-3-2016, therein allowing the assesses claim for deduction under section 80P(2)(d), had therein rendered his order as erroneous, insofar it was prejudicial to the interest of the revenue. Accordingly, the Principal Commissioner not finding favour with the reply of the assessee, wherein the latter had tried to impress upon him that it was duly eligible for claim of deduction under section 80P(2)(d) of the Act, therein set aside the order of the assessing officer with a direction to redecide the issue afresh and reframe the assessment.