ITO 1(1)(4), MUMBAI v. BOMBAY MERCANTILE CO.OP. BANK LTD, MUMBAI

ITA 5292/MUM/2010 | 1997-1998
Pronouncement Date: 07-09-2011 | Result: Dismissed

Appeal Details

RSA Number 529219914 RSA 2010
Assessee PAN AAAAB2359J
Bench Mumbai
Appeal Number ITA 5292/MUM/2010
Duration Of Justice 1 year(s) 2 month(s) 9 day(s)
Appellant ITO 1(1)(4), MUMBAI
Respondent BOMBAY MERCANTILE CO.OP. BANK LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 07-09-2011
Assessment Year 1997-1998
Appeal Filed On 28-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI R.S. SYAL (AM) & SHRI VIJAY PAL RAO (J M) I.T.A.NO.5292/MUM/2010 (A.Y.1997-98 ) INCOME-TAX OFFICER-1(1)(4) ROOM NO.579 AAYKAR BHAVAN M.K. ROAD MUMBAI-400 020. VS. BOMBAY MERCANTILE CO-OP. BANK LTD. 78 MOHAMADALI ROAD MUMBAI-400 003. PAN: AAAAB2359J APPELLANT RESPONDENT APPELLANT BY SHRI PRADEEP SHARMA. RESPONDENT BY SHRI W . HASAN. DATE OF HEARING 30-08-2011 DATE OF PRONOUNCEMENT 07-09-2011 O R D E R PER R.S. SYAL AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 03-02-2010 IN RELATION TO ASSTT. YEAR 1997-98. 2. THE FOLLOWING TWO EFFECTIVE GROUNDS HAVE BEEN RA ISED IN THIS APPEAL : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN HOLDIN G THAT THE MISCELLANEOUS INCOME RS.8 74 696/- IS ELIGIBLE FOR DEDUCTION U/S.80P. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN HOLDIN G THAT THE INTEREST ON BILL DISCOUNTING RS.3 29 39 358/- INTE REST ON BILL DISCOUNTING UNDER THE LETTERS OF CREDIT RS.12 84 79 556/- INCOME FROM BANK GUARANTEE (COMMISSION) RS.74 74 52 6/- PROFIT ARISING FROM DEALING IN FOREIGN EXCHANGE RS.1 69 25 321/- IS ELIGIBLE FOR DEDUCTION U/S.80P. ITA NO.5292/MUM/2010 BOMBAY MERCANTILE CO-OP. BANK LTD. 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSMENT IN THIS CASE WAS COMPLETED AGAINST WHICH SECOND APPEAL CAME UP BEFORE THE TRIBUNAL. VIDE ITS ORDER DATED 23-02-2005 IN ITA NO.1640/MUM/2001 THE TRIBUNAL RESTORED CERTAIN ISSUES FOR FRESH DECISION IN ACCORDANCE WIT H CERTAIN DIRECTIONS. 4. GROUND NO. 1 DEALS WITH THE GRANTING OF DEDUCTI ON BY THE LD. CIT(A) U/S.80P ON THE MISC. INCOME OF RS.8 74 696/-. THE L D. CIT(A) THROUGH PARA 4 OF THE IMPUGNED ORDER OBSERVED THAT SIMILAR ISSUE WAS DECIDED BY HIM IN ASSTT. YEAR 1996-97 IN FAVOUR OF THE ASSESSEE BY GRANTING DEDUCTION U/S.80P ON SUCH MISC. INCOME. FOLLOWING HIS DECISION HE ALLOWED DE DUCTION IN THIS YEAR AS WELL. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE REL EVANT MATERIAL ON RECORD. IT IS NOTICED THAT THE LD. CIT(A) HAS FOLLOWED HIS OWN ORDER FOR THE IMMEDIATELY PRECEDING ASSTT. YEAR IN GRANTING DEDUCTION U/S.80P ON MISC. INCOME IN SIMILAR CIRCUMSTANCES. THE LD. A.R. SUBMITTED THAT THE DE PARTMENT HAS ACCEPTED THE SAID ORDER FOR ASSTT. YEAR 1996-97 PASSED BY THE CI T(A) AND NO SECOND APPEAL WAS PREFERRED BEFORE THE TRIBUNAL. THE LD. D.R. FAI LED TO PLACE ANY MATERIAL ON RECORD TO SHOW THAT THE ORDER OF CIT(A) FOR ASSTT. YEAR 1996-97 WAS APPEALED AGAINST. SINCE THE FACTS OF THIS GROUND ARE SIMILAR TO THOSE OF ASSTT. YEAR 1996-97 WHICH ORDER HAS BEEN ACCEPTED BY THE DEPARTMENT NO W IT CANNOT TURN AROUND TO CLAIM THAT DEDUCTION U/S.80P BE NOT ALLOWED ON MISC . INCOME. WE THEREFORE UPHOLD THE IMPUGNED ORDER ON THIS ISSUE. 6. THE SECOND GROUND IS AGAINST THE GRANTING OF DED UCTION U/S.80P ON INTEREST INCOME ON BILL DISCOUNTING INTEREST ON BILL DISCOU NTING UNDER THE LC INCOME FROM BANK GUARANTEE AND PROFIT ARISING FROM DEALING IN FOREIGN EXCHANGE. IT IS NOTICED ITA NO.5292/MUM/2010 BOMBAY MERCANTILE CO-OP. BANK LTD. 3 THAT THE ASSESSEE IS ENGAGED IN BANKING BUSINESS. S EC. 80P(1) GRANTS DEDUCTION IN RESPECT OF ITEMS OF INCOME SPECIFIED IN SUB-SECT ION (2). SUB-SECTION (2)(A)(I) PROVIDES THAT IN THE CASE OF CO-OPERATIVE SOCIETY E NGAGED IN CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS THE WHOLE OF THE AMOUNT OF PROFITS & GAINS OF BUSINESS ATTRIBUTABLE TO ANY ONE OR MORE OF SUCH ACTIVITIES SHALL QUALIFY FOR DEDUCTION. FROM THE DE SCRIPTION OF ITEMS NOTICED ABOVE IT IS CLEAR THAT ALL OF THEM FALL WITHIN THE AMBIT OF PROFITS AND GAINS OF BUSINESS ATTRIBUTABLE TO CARRYING ON BUSINESS OF BANKING AN D PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE LD. CIT(A) HAS RIGHTLY RELIED ON T HE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MEHSANA DIST. CENTRAL CO-OP. BANK LTD. VS. ITO (2001) 251 ITR 522 (SC) AND THE PROVISIONS OF SEC. 6(1) OF THE BANKING REGULATION ACT FOR COMING TO THE CONCLUSION THAT TH ESE ARE THE AMOUNTS ATTRIBUTABLE TO CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS. WE THEREFORE UPHOLD THE IMPUGNED ORD ER ON THIS ISSUE. 7. IN THE RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THE 07TH DAY OF SEPTEMBER 2011. SD/- SD/- (VIJAY PAL RAO) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 07TH SEPTEMBER 2011. NG: COPY TO : 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-XXVII MUMBAI. 4 CIT CITY-3 MUMBAI. ITA NO.5292/MUM/2010 BOMBAY MERCANTILE CO-OP. BANK LTD. 4 5.DR B BENCH MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER ASST.REGISTRAR ITAT MUMBAI. ITA NO.5292/MUM/2010 BOMBAY MERCANTILE CO-OP. BANK LTD. 5 DETAILS DATE INITIALS DESIGN ATION 1. DRAFT DICTATED ON 30-08- 2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 30-08- 2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON 07-09-11 SR.PS/ 7. FILE SENT TO THE BENCH CLERK 07-09-11 SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 07-09-11 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *