MTNL Employees Co-op Thrift and Credit Society Ltd, New Delhi v. ACIT, Circle-52(1), New Delhi

ITA 4835/DEL/2018 | 2015-2016
Pronouncement Date: 31-05-2021 | Result: Allowed

Appeal Details

RSA Number 483520114 RSA 2018
Assessee PAN AAABM1565G
Bench Delhi
Appeal Number ITA 4835/DEL/2018
Duration Of Justice 2 year(s) 10 month(s) 24 day(s)
Appellant MTNL Employees Co-op Thrift and Credit Society Ltd, New Delhi
Respondent ACIT, Circle-52(1), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 31-05-2021
Assessment Year 2015-2016
Appeal Filed On 06-07-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SH. BHAVNESH SAINI JUDICIAL MEMBER DR. B. R. R. KUMAR ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 4833/DEL/2018 : ASSTT. YEAR : 2010-11 ITA NO. 4834/DEL/2018 : ASSTT. YEAR : 2012-13 ITA NO. 4835/DEL/2018 : ASSTT. YEAR : 2015-16 MTNL EMPLOYEES CO-OP THRIFT & CREDIT SOCIETY LTD. ROOM NO. 101 JANPATH ROAD EASTERN COURT BUILDING NEW DELHI-110001 VS ACIT CIRCLE-52(1) NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A AABM1565G ASSESSEE BY : SH. K. P. GARG ADV. REVENUE BY : SH. AJAY KUMAR SR. DR DATE OF HEAR ING: 27 . 0 5 .20 2 1 DATE OF PRONOUNCEMENT: 31 .05 .20 2 1 ORDER PER DR. B. R. R. KUMAR ACCOUNTANT MEMBER: THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAI NST THE ORDERS OF THE LD. CIT(A)-18 NEW DELHI DATED 17.05. 2018 AND 18.05.2018. 2. SINCE THE ISSUES INVOLVED IN ALL THESE APPEALS ARE COMMON THEY WERE HEARD TOGETHER. 3. IN ITA NO. 4833/DEL/2018 FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE IMPUGNED ORDER OF THE LEARNED ASSESSING OFFICER WHICH IS CONTRARY TO LAW PASSED ITA NOS. 4833 4834 & 4835/DEL/2018 MTNL EMPLOYEES CO-OP THRIFT & CREDIT SOCIETY LTD. 2 WITHOUT APPLICATION OF MIND AND WITHOUT COMPLYING WITH THE PROCEDURE AND RULES IS AGAINST EQUITY AND JUSTICE AND FACTS OF THE ASSESSEE AND MATERIAL ON RECORD. 2. THE APPELLANT DENIES HIS LIABILITY TO TAX AS UPHELD BY THE LEARNED CIT(A) AND DETERMINED AND COMPUTED BY THE LEARNED ASSESSING OFFICER AND THE MANNER IN WHICH IT HAS BEEN SO DETERMINED OR COMPUTED. 3. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE IMPUGNED ADDITIONS OF INTEREST OF RS.3 83 278/- EARNED FROM COOPERATIVE BANK' AND COMMERCIAL BANK BY TREATING THE SAME UNDER THE HEAD OF INCOME FROM OTHER SOURCES. 4. DURING THE COURSE OF HEARING THE LD. COUNSEL FO R THE ASSESSEE AT THE VERY OUTSET STATED THAT THE ISSUE I S SQUARELY COVERED IN ASSESSEES FAVOUR VIDE ORDER DATED 27.07 .2020 IN ITA NO.4078/DEL/2019 ITA NO.6935/DEL/2018 AND ITA NO. 2036/DEL/2019 FOR THE ASSESSMENT YEARS 2012-13 201 3-14 AND 2014-15. 5. THE LD. SR. DR ALTHOUGH SUPPORTED THE ORDER OF T HE AO BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF TH E LD. COUNSEL FOR THE ASSESSEE. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. I N THE PRESENT CASE IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS WAS A SUBJECT MATTER OF THE ASSESSEES APPEAL IN IT A NO.4078/DEL/2019 ITA NO.6935/DEL/2018 AND ITA NO. 2036/DEL/2019 THE RELEVANT FINDINGS HAVE BEEN GIVE N IN PARAS 14 TO 23 WHICH READ AS UNDER: ITA NOS. 4833 4834 & 4835/DEL/2018 MTNL EMPLOYEES CO-OP THRIFT & CREDIT SOCIETY LTD. 3 14. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 15. HAVING DECIDED THE MATTER IN THE ISSUE OF SECTI ON 80P(2)(A)(I) THE CLAIM OF THE ASSESSEE FOR DEDUCTI ON U/S 80P(2)(D) IS VIEWED DE NOVO. 16. WE HAVE GIVEN A THOUGHT TO CONSIDER WHETHER THE CO-OPERATIVE BANK WHEREIN THE ASSESSEE MADE DEPOSIT S OUT OF THIS SURPLUS FUND BE CONSIDERED AS A CO-OPER ATIVE SOCIETY FOR IF A CO-OPERATIVE BANK IS CONSIDERED T O BE A CO-OPERATIVE SOCIETY THAN ONLY THE INTEREST EARNED BY THE ASSESSEE ON THE DEPOSITS WOULD BE ELIGIBLE FOR DEDU CTION U/S 80P(2)(D). WE FIND THAT CO-OPERATIVE SOCIETY IS A BROAD AND LARGER UMBRELLA UNDER WHICH THE CO-OPERAT IVE BANKS DO PERFORM. ALL CO-OPERATIVE SOCIETIES MAY NO T BE BANKS BUT ALL CO-OPERATIVE BANKS ARE DEEMED TO BE C O- OPERATIVE SOCIETIES. ACCORDING TO BANKING REGULATIO NS ACT A CO-OPERATIVE SOCIETY BANK AS THE SAME MEANING OF THE CO-OPERATIVE SOCIETY. 17. FURTHER WE HAVE ALSO GIVEN A THOUGHT AS TO THE INTEREST EARNED BY THE SURPLUS FUNDS. AS PER THE IN COME TAX ACT THERE IS NO SUCH STIPULATION OR PREREQUISI TE AS TO THE NATURE OF THE FUNDS. SO FAR AS THE PRINCIPLES O F INTERPRETATION TO A TAXING STATUE IS CONCERNED WE DERIVE IT FROM CAPE BRANDY SYNDICATE VS IRC 1 KB 64 AS QUO TED BY THE HONBLE HIGH COURT OF PUNJAB & HARYANA HON BLE J IQBAL SINGH THAT IN A TAXING ACT ONE HAS TO LOOK MERELY AT WHAT IS CLEARLY SAID. THERE IS NO ROOM FOR ANY INTENDMENT. THERE IS NO EQUITY ABOUT A TAX. THERE IS NO PRESUMPTION AS TO A TAX. NOTHING IS TO BE READ IN NOTHING IS TO BE IMPLIED. ONE CAN ONLY LOOK FAIRLY AT THE LANGUAGE USED. ITA NOS. 4833 4834 & 4835/DEL/2018 MTNL EMPLOYEES CO-OP THRIFT & CREDIT SOCIETY LTD. 4 18. THUS WE ALSO FIND THAT SECTION 80P(2)(D) OF TH E ACT ALLOWS WHOLE DEDUCTION OF AN INCOME BY WAY OF INTER EST OR DIVIDENDS DERIVED BY THE CO-OPERATIVE SOCIETY FROM ITS INVESTMENT WITH ANY OTHER CO-OPERATIVE SOCIETY. THI S PROVISION DOES NOT MAKE ANY DISTINCTION IN REGARD T O SOURCE OF THE INVESTMENT BECAUSE THIS SECTION ENVIS AGES DEDUCTION IN RESPECT OF ANY INCOME DERIVED BY THE C O- OPERATIVE SOCIETY FROM ANY INVESTMENT WITH A CO-OPE RATIVE SOCIETY. THE REVENUE IS NOT REQUIRED TO LOOK TO THE NATURE OF THE INVESTMENT WHETHER IT WAS FROM ITS SURPLUS F UNDS OR OTHERWISE. 19. WE HAVE ALSO CONSIDERED THE CASE OF TOTGARS CO- OPERATIVE SALE SOCIETY LTD. 322 ITR 283 RELIED UPON BY THE LD. DR AND FIND THAT THE HONBLE SUPREME COURT HAS DELIBERATED ON THE ISSUE OF DEDUCTION U/S 80P(2)(A) (I) BUT NOT ON SECTION 80P(2)(D). WE ALSO OBSERVED THAT IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOCIETY LTD. ITSE LF THE HONBLE HIGH COURT OF KARNATAKA HAS ALLOWED THE CLA IM OF DEDUCTION U/S 80P(2)(D) VIDE ORDER DATED 05.01.2017 . 20. HENCE KEEPING IN VIEW THE PROVISIONS OF THE AC T AND THE JUDGMENTS OF THE HONBLE HIGH COURT AND SUPREME COURT IN THE CASE OF TOTGARS CO-OPERATIVE S ALE SOCIETY LTD. WE HEREBY HOLD THAT THE ASSESSEE IS E LIGIBLE FOR DEDUCTION U/S 80P(2)(D) ON THE INCOME EARNED BY THE WAY OF INTEREST FROM THE CO-OPERATIVE SOCIETIES. EXPENDITURE - U/S 57: 21. THE ASSESSEE HAS TAKEN A PLEA THAT THE EXPENDIT URE INCURRED IN EARNING OF INTEREST FROM THE COMMERCIAL BANKS BE ALLOWED WHILE COMPUTING THE TAXABLE INCOME. THE PROVISION OF SECTION 57 READS AS UNDER: SECTION 57: THE INCOME CHARGEABLE UNDER THE HEAD 'INCOME FROM OTHER SOURCES' SHALL BE COMPUTED AFTER MAKING THE FOLLOWING DEDUCTIONS NAMELY: ITA NOS. 4833 4834 & 4835/DEL/2018 MTNL EMPLOYEES CO-OP THRIFT & CREDIT SOCIETY LTD. 5 (I) IN THE CASE OF [DIVIDENDS 94[OTHER THAN DIVIDE NDS REFERRED TO IN SECTION 115-O ]] [OR INTEREST ON SECURITIES] ANY REASONABLE SUM PAID BY WAY OF COMMISSION OR REMUNERATION TO A BANKER OR ANY OTHER PERSON FOR THE PURPOSE OF REALISING SUCH DIVIDEND [ OR INTEREST] ON BEHALF OF THE ASSESSEE; [(IA) IN THE CASE OF INCOME OF THE NATURE REFERRED TO IN SUB-CLAUSE (X) OF CLAUSE (24) OF SECTION 2 WHICH IS CHARGEABLE TO INCOME-TAX UNDER THE HEAD 'INCOME FRO M OTHER SOURCES' DEDUCTIONS SO FAR AS MAY BE IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE (VA) OF SU B- SECTION (1) OF SECTION 36 ;] (II) IN THE CASE OF INCOME OF THE NATURE REFERRED T O IN CLAUSES (II) AND (III) OF SUB-SECTION (2) OF SECTIO N 56 DEDUCTIONS SO FAR AS MAY BE IN ACCORDANCE WITH TH E PROVISIONS OF SUB-CLAUSE (II) OF CLAUSE (A) AND CLA USE (C) OF SECTION 30 SECTION 31 AND [SUB-SECTIONS (1) [** *] AND (2)] OF SECTION 32 AND SUBJECT TO THE PROVISION S OF [SECTION 38]; [(IIA) IN THE CASE OF INCOME IN THE NA TURE OF FAMILY PENSION A DEDUCTION OF A SUM EQUAL TO THIRTY-THREE AND ONE-THIRD PER CENT OF SUCH INCOME OR [FIFTEEN] THOUSAND RUPEES WHICHEVER IS LESS. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE 'FAMI LY PENSION' MEANS A REGULAR MONTHLY AMOUNT PAYABLE BY THE EMPLOYER TO A PERSON BELONGING TO THE FAMILY OF AN EMPLOYEE IN THE EVENT OF HIS DEATH ;] (III) ANY OTHER EXPENDITURE (NOT BEING IN THE NATUR E OF CAPITAL EXPENDITURE) LAID OUT OR EXPENDED WHOLLY AN D EXCLUSIVELY FOR THE PURPOSE OF MAKING OR EARNING SU CH INCOME; [(IV) IN THE CASE OF INCOME OF THE NATURE REFERRED TO IN CLAUSE (VIII) OF SUB-SECTION (2) OF SECTION 56 A ITA NOS. 4833 4834 & 4835/DEL/2018 MTNL EMPLOYEES CO-OP THRIFT & CREDIT SOCIETY LTD. 6 DEDUCTION OF A SUM EQUAL TO FIFTY PER CENT OF SUCH INCOME AND NO DEDUCTION SHALL BE ALLOWED UNDER ANY OTHER CLAUSE OF THIS SECTION.] 22. HAVING HEARD THE ARGUMENTS WE HEREBY DIRECT TH AT THE ASSESSING OFFICER SHALL ALLOW THE EXPENDITURE I NCURRED IN RELATION TO EARNING OF INTEREST FROM THE COMMERC IAL BANKS. 23. IN CONCLUSION A. THE ASSESSEE BEING A CO-OPERATIVE SOCIETY NOT INVOL VED IN BANKING OPERATION IS NOT ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I). B. THE ASSESSEE BEING A CO-OPERATIVE SOCIETY IS ELIGIB LE FOR DEDUCTION U/S 80P(2)(D) ON THE INTEREST EARNED FROM OTHER CO-OPERATIVE SOCIETIES. C. THE ASSESSEE IS ELIGIBLE FOR THE EXPENDITURE U/S 57 INCURRED IN EARNING THE INTEREST INCOME WHICH IS TA XABLE UNDER THE HEAD INCOME FROM OTHER SOURCES AS PER SECTION 56. 7. HENCE IN THE ABSENCE OF ANY MATERIAL CHANGE ON THE FACTS OF THE ISSUE THE ADDITION IS HEREBY DELETED. 8. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/05/2021. SD/- SD/- (BHAVNESH SAINI) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 31/05/2021 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR