M/s. Delhi Co-operative Housing Finance Complex Ltd., New Delhi v. ITO, New Delhi

ITA 2371/DEL/2010 | 1993-1994
Pronouncement Date: 20-07-2010 | Result: Allowed

Appeal Details

RSA Number 237120114 RSA 2010
Bench Delhi
Appeal Number ITA 2371/DEL/2010
Duration Of Justice 2 month(s) 1 day(s)
Appellant M/s. Delhi Co-operative Housing Finance Complex Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 20-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 20-07-2010
Date Of Final Hearing 20-07-2010
Next Hearing Date 20-07-2010
Assessment Year 1993-1994
Appeal Filed On 19-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI SHAMIM YAHYA ITA NOS. 2370 & 2371/DEL/10 A.YRS. 1992-93 & 1993-94 M/S DELHI CO-OPERATIVE HOUSING VS. ITO WARD 10( 1) FINANCE CORPORATION LTD. NEW DELHI. 3/6 SIRI FORT INSTITUTIONAL AREA AUGUST KRANTI MARG NEW DELHI. PAN/ GIR NO. AAAAD119Q ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI SWEETY KOTHARI CA RESPONDENT BY : SHRI B. KISHORE B DR O R D E R PER R.P. TOLANI J.M : THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAI NST SEPARATE ORDERS DATED 26-2-2010 OF THE CIT DELHI-IV PASSED U/S 263 OF THE INCOME-TAX ACT 1961 FOR ASSESSMENT YEARS 1992-93 & 1993-94 REVISING 154 OR DERS PASSED BY THE AO IN THESE YEARS. BRIEF FACTS ARE: 2. AGAINST ORIGINAL ASSESSMENTS ASSESSEE PREFERRED FIRST APPEALS ON THE ISSUE OF SEC. 80P(2)(A) IN WHICH PART RELIEF WAS GRANTED AGGRIEVED ASSESSEE AND REVENUE FILED FURTHER APPEALS TO ITAT. AO IN THE MEANWHI LE GAVE APPEAL EFFECT TO CIT(A)S ORDER WHICH ACCORDING TO ASSESSEE CARRI ED MISTAKES AND FILED 154 APPLICATIONS WHICH WERE ALLOWED BY AO. 2.1. THE CIT U/S 263 WAS HOWEVER OF THE VIEW THAT 154 ORDERS WERE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND SET ASIDE THOSE ORDERS TO BE REDONE ITA 2370 & 2371/DEL/10 DELHI COOP. HOUSING FIN.COMPLEX LTD. 2 AFRESH. THE ASSESSEE IS BEFORE US AGAINST THE ORDER S OF CIT PASSED U/S 263 OF THE ACT. 2.2. IN THE MEANWHILE APPEALS BEFORE ITAT AGAINST THE CIT(A)S ORDER CAME UP FOR HEARING AT THE INSTANCE OF THE ASSESSEE AND THE REVENUE. VIDE ORDER DATED 28-8- 2009 THE ITAT ALLOWED ENTIRE CLAIM OF ASSESSEE U/S 80P(2)(A) BY FOLLOWING OBSERVATIONS: 9.2. WE FIND TRUTH IN THE CONTENTION OF THE ASSESS EE THAT THE ASSESSING OFFICER INSTEAD OF EXAMINING THE PURPOSE OF BORROWINGS HAS EXAMINED AS TO HOW THE FUNDS WERE DEPLOYED AND WHAT WAS REQUIREMENT OF ITS MEMBER. THE OBJECTS OF THE SOCIE TY HAVE NOT BEEN GONE INTO. DURING THE COURSE OF HEARING IT WAS CONT ENDED BY THE LD. AR OF THE ASSESSEE THAT THE FUNDS COULD NOT BE UTIL IZED FOR THE PURPOSE OF ADVANCEMENT OF THE HOUSING LOAN IN THE Y EAR UNDER CONSIDERATION ON ACCOUNT OF CERTAIN LEGAL DISPUTES. THE ALLOTMENT OF LAND BY THE DDA WAS CHALLENGED IN THE HIGH COURT AN D HONBLE HIGH COURT CANCELLED THE ALLOTMENTS. THEREFORE DDA COULD NOT PROCEED WITH THE ALLOTMENT OF PLOTS OF LAND AND HOU SES IN LARGE COLONIES LIKE DWARKA. BECAUSE OF THIS REASON THE AS SESSEE DID NOT HAVE ENOUGH MEMBERS APPLYING FOR THE LOAN. THE ASSE SSEE HAD ALSO EXPLAINED THAT THE LOAN OF RS. 13 CRORES WAS RAISED FROM LIC FOR THE PURPOSE OF OBJECTS OF THE ASSESSEE. THE TERMS AND C ONDITIONS OF LOAN SANCTIONED BY LIC CLEARLY MENTIONED THAT NO PORTION OF THE LOAN MADE AVAILABLE WILL BE UTILIZED FOR ANY PURPOSE OTH ER THAN GRANTS OF LOAN TO THE PRIMARY CO-OPERATIVE SOCIETIES FOR CONS TRUCTION OF NEW HOUSES. THE ASSESSEE IS A CO-OPERATIVE SOCIETY CONT ROLLED BY THE STATE GOVERNMENT WHERE FUNDS CAN BE RAISED ONLY AFTER OBT AINING PERMISSION/ APPROVAL OF VARIOUS AUTHORITIES LIKE GO VT. CONCERNED MINISTRY RBI AND REGISTRAR OF CO-OPERATIVE SOCIETY ETC. THE BORROWING LIMITS AND TIMINGS OF BORROWINGS ARE DECI DED BY THE RBI BASED ON THE AVAILABILITY OF THE BANKS [WHO ARE TH E SUBSCRIBERS TO THE BONDS ISSUED] TO SUBSCRIBE AND THE ASSESSEE SOCIETY HAS NO ROLE TO PLAY EXCEPT INTIMATING ITS REQUIREMENTS TO THE RBI WHEN REQUESTED. THE INTIMATION TO THE REGISTRAR OF SOCIETIES IS MAD E AND GOVT. GUARANTEE IS TO BE OBTAINED FOR WHICH PROPOSAL IS S ENT BY THE REGISTRAR. THE FUNDS/ BONDS ISSUED ARE GUARANTEED B Y THE MINISTRY OF URBAN DEVELOPMENT GOVT. OF INDIA FOR WHICH GUARANT EE FEES IS PAID. SANCTION IS TAKEN FROM THE CONCERNED MINISTRY. THE APPROVAL OF THE REGISTRAR OF CO-OPERATIVE SOCIETIES REQUIRES TO BE TAKEN FOR RAISING THE ITA 2370 & 2371/DEL/10 DELHI COOP. HOUSING FIN.COMPLEX LTD. 3 LOANS. FROM THESE FACTS IT IS CLEAR THAT THE ASSES SEE CANNOT BORROW THE FUNDS OTHER THAN THE OBJECTS OF THE SOCIETY WH ICH IS TO LEND MONEY TO THE OTHER CO-OPERATIVE SOCIETIES FOR THE H OUSING PURPOSES. IF THE FUNDS ARE BORROWED AND ARE NOT TAKEN BY THE SOCIETIES FOR CERTAIN REASONS THE ASSESSEE IS FORCED TO INVEST SU CH FUNDS IN THE FDRS/ PMS THEN IT WOULD BE INCORRECT TO SAY THAT T HE ASSESSEE BORROWED NOT FOR THE PURPOSE OF ITS INTEREST. IN OU R CONSIDERED OPINION THE INTEREST EARNED DURING THE PERIOD HAS TO BE ASSESSED UNDER THE HEAD BUSINESS AND NOT UNDER THE HEAD O THER SOURCES. ACCORDINGLY THE ASSESSEE WILL BE ELIGIBLE FOR DEDU CTION UNDER SECTION 80-P(2)(A) OF THE ACT. ITAT WHILE SETTING A SIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER HAD DIRECTED ONLY TO ENQUIRE THE PURPOSE FOR WHICH THE FUNDS WERE RAISED. IF SUCH FU NDS WERE RAISED FOR THE PURPOSE OF OBJECTS OF T HE SOCIETY THE TEM PORARY USER OF FUNDS WOULD NOT HAVE ALTERED THE CHARACTER OF INTEREST RE CEIVED BY THE ASSESSEE. THEREFORE IN OUR CONSIDERED OPINION THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN EXAMINING THE CASE FROM DIFFE RENT ANGLE AND ARRIVE A THE CONCLUSION THAT INTEREST INCOME WAS LI ABLE TO BE ASSESSED UNDER THE HEAD OTHER SOURCES. WE ACCORDINGLY SET ASIDE THE ORDER OF LD. CIT(APPEALS) AND DIRECT THE ASSESSING OFFICE R TO ALLOW THE CLAIM OF THE ASSESSEE. 3. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT T HE ITAT HAS UPHELD ITS CLAIM U/S 80P(2)(A) ON MERITS THE ASSESSMENT ORDER AND SUBSEQUENT CIT(A)S ORDER AND 154 ORDER OF AO GOT MERGED INTO THE ORDER OF I TAT. BESIDES 80-P(2)(A) CLAIM HAVING BEEN ALLOWED THE ASSESSEES GRIEVANC E CARRIED STANDS REDRESSED SINCE THE ISSUE ABOUT 80-P(2)(A) DOES NOT EXIST AND ALL EARLIER ORDERS GOT MERGED INTO TRIBUNALS ORDER THE IMPUGNED ORDERS PASSED U /S 263 BECOME INFRUCTUOUS THE ASSESSEES APPEALS U/S 263 SHALL BE ALLOWED BY QUA SHING THESE ORDERS. 4. LEARNED DR IS HEARD. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD. IT HAS BEEN CONCEDED BY LEARNED DR THAT THE IMPUGNED ISSUE ABOUT ASSESSEES CLAIM U/S 80P(2)(A) IN BOTH THE YEARS HA S BEEN ALLOWED BY THE ITAT. SINCE THE ADDITIONS DOES NOT SURVIVE ANY SUBSEQUEN T ACTION THEREON BECOMES INFRUCTUOUS. BESIDES AOS AND CIT(A)S ORDERS HAVI NG GOT MERGED INTO TRIBUNALS ITA 2370 & 2371/DEL/10 DELHI COOP. HOUSING FIN.COMPLEX LTD. 4 ORDER 263 PROCEEDINGS CANNOT BE SUSTAINED. IN VIEW THEREOF 263 ACTION UNDER BOTH THE YEARS IS QUASHED. 6. IN THE RESULT ASSESSEES APPEALS FOR BOTH THE A SSESSMENT YEARS ARE ALLOWED. O RDER PRONOUNCED IN OPEN COURT ON 20-7-2010. SD/- SD/- (SHAMIM YAHYA ) ( R.P. TOLAN I ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20-7- 2010. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR ITA 2370 & 2371/DEL/10 DELHI COOP. HOUSING FIN.COMPLEX LTD. 5