The DCIT, 1(1), Bhopal v. M/s. M.P. State Co-op Housing Federation Limited, Bhopal

ITA 560/IND/2014 | 2010-2011
Pronouncement Date: 04-10-2016 | Result: Dismissed

Appeal Details

RSA Number 56022714 RSA 2014
Assessee PAN AAAAM1593M
Bench Indore
Appeal Number ITA 560/IND/2014
Duration Of Justice 2 year(s) 1 month(s) 10 day(s)
Appellant The DCIT, 1(1), Bhopal
Respondent M/s. M.P. State Co-op Housing Federation Limited, Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 04-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 04-10-2016
Date Of Final Hearing 04-10-2016
Next Hearing Date 04-10-2016
Assessment Year 2010-2011
Appeal Filed On 25-08-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE .. .. % BEFORE SHRI D.T. GARASIA JUDICIAL MEMBER AND SHRI O.P. MEENA ACCOUNTANT MEMBER DY. CIT 1(1) BHOPAL VS. M/S. M.P.STATE CO-OP. HOUSING FEDERATION LIMITED BHOPAL .. ./ PAN: AAAAM1593M / APPELLANT / RESPONDENT / APPELLANT BY SHRI MOHD. JAVED DR / RESPONDENT BY SHRI S. S. DESHPANDE CA DATE OF HEARING 04.10.2016 DATE OF PRONOUNCEMENT 04.10.2016 / O R D E R PER O.P. MEENA ACCOUTANT MEMEBR. THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)- I BHOPAL .. . / I.T.A. NOS. 560 607/IND/2014 AND 02/IND/2016 %' ' / ASSESSMENT YEAR: 2010-11 2011-12 AND 2012-13 DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 2 OF 14 [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 20.06 .2014 03.07.2014 AND 27.10.2015 AND PERTAIN TO ASSESSMENT YEARS 2010-11 2011-12 AND 2012-13. 2. THE FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE :- I.T.A.NO. 560/IND/2014 A.Y. 2010-11: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1 79 33 133/- MADE ON ACCOUNT OF INTEREST OF FDRS A ND SAVING BANK ACCOUNTS WHEN THE SAID INTEREST INCOME WA S NOT ATTRIBUTABLE TO THE BUSINESS OF THE ASSESSEE OF PROVIDING CREDIT FACILITIES TO THE MEMBERS AND WAS NOT PROVIDING CREDIT FACILITIES TO THE MEMBERS AND WAS NOT EXEMPT BY VIRTUE OF PROVISIONS OF SECTION 80P(2)(A) 9I) AND SECTION 80P(2)(D) OF THE INCOME-TAX ACT 1961. I.T.A.NO. 607/IND/2014 A.Y. 2011-12 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING DISALLOWANCE OF INTEREST INCOME OF RS. 33 12 622/- FOR THE ASSESSMENT YEAR 2011-12 U/S 80P(2)(A)(I) OF THE INCOME-TAX ACT 1961 WHEN IT WAS NOT THE INCOME ATTRIBUTABLE TO THE BUSINESS OF THE ASSESSEE OF PROVIDING CREDIT FACILITY TO ITS MEMBERS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING DISALLOWANCE OF R S. 33 12 622/- RELYING ON THE DECISION OF HON'BLE I.T.A.T. INDORE IN ASSESSES CASE FOR ASSESSMENT YEAR 2003-04 2006-07 2007-08 AND 2009-10 EVEN WHEN THE DEPARTMENT IS IN APPEAL BEFORE HON'BLE DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 3 OF 14 HIGH COURT JABALPUR. FOR ASSESSMENT YEAR 2003-04 AND THE SAME IS PENDING FOR ADJUDICATION. I.T.A.NO. 02/IND/2016 A.Y. 2012-13 : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION FO R S. 87 98 824/- MADE ONA CCOUANT OF INTEREST ON FDRS AND SAVING BANK ACCOUNTS WHEN THE SAID INTEREST INCOME WAS NOT ATTRIBUTABLE TO THE BUSINESS OF THE ASSESSEE OF PROVIDING CREDIT FACILITIES TO THE MEMBERS OF SECTION 80P(2)(A)(I) AND SECTION 80P(2)(D) OF THE INCOME-TAX ACT. 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET CONTENDED THAT THESE APPEALS ARE COVERED BY THE DE CISION DATED 9.5.2013 OF I.T.A.T. INDORE BENCH IN THE CA SE OF THE ASSESSEE ITSELF PASSED IN I.T.A.NO. 7/IND/2013 FOR THE ASSESSMENT YEAR 2009-10. 4. THE LD. SR. DEPARTMENTAL REPRESENTATIVE AGREED TO I T. 5. THE I.T.A.T. IN THE ABOVE DECISION HELD AS UNDER :- THIS IS AN APPEAL BY THE REVENUE CHALLENGING THE OR DER DATED 19.10.2012 OF THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS)-1 BHOPAL. THE FIRST GROUND RAISED IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.1 56 62 291/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST BEING COVERED U/S 80P(2)(A)(I) OF THE I.T. ACT 1961. 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SHR I V.K. KARAN LEARNED CIT/DR AND SHRI S.S. DESHPANDE DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 4 OF 14 LEARNED COUNSEL FOR THE ASSESSEE. AT THE OUTSET TH E LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT TH E IMPUGNED ISSUE IS COVERED BY THE DECISION OF TRIBUN AL THAT TOO IN THE CASE OF ASSESSEE ITSELF VIDE ORDER IN I TA NO.41/IND/2007 (AY 2003-04) DATED 16.5.2008 AND ITA NO.54/IND/2011 (AY 2007-08) DATED 4.11.2011. THIS ASSERTION OF THE ASSESSEE WAS NOT CONTROVERTED BY T HE REVENUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON FILE. IN VIEW OF THE ABOVE WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION OF THE AFORESAID ORDER DATED 4.11.2011: THIS IS AN APPEAL BY THE REVENUE CHALLENGING THE ORDER DATED 12.1.2011 OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. FIRST APPELLATE AUTHORITY ERRED IN DE LETING THE ADDITION OF RS.14 66 113/- MADE BY THE ASSESSING OFFICER TO THE INCOME OF THE ASSESSEE AS IT IS NOT COVERED U/S 80P(2)(A)(I) OF THE I.T. ACT 19 61. 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SHRI ARUN DEWAN LEARNED SR. DR AND SHRI S.S. DESHPANDE LEARNED COUNSEL FOR THE ASSESSEE. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF TRIBUNAL THAT TOO IN THE CASE OF ASSE SSEE ITSELF VIDE ORDER IN ITA NO.41/IND/2007 DATED 16.5.2008. THIS ASSERTION OF THE ASSESSEE WAS NOT CONTROVERTED BY THE REVENUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON FILE. IN VIEW OF THE ABOVE WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE AFORESAID ORDER DATED 16.5.2008: THIS APPEAL ARISES AGAINST THE ORDER OF CIT(A)-I BHOPAL DATED 18.10.2006 FOR THE ASSESSMENT YEAR 2003-04. DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 5 OF 14 2.IN TOTAL THERE ARE FOUR GROUNDS OF APPEAL. THE BASIC QUESTION INVOLVED IS REGARDING ALLOWABILITY O F PROVISIONS OF SECTION 80-P(2)(A)(I) OF THE INCOME-T AX ACT 1961. 3.THE BRIEF FACTS OF THE CASE ARE AS UNDER. 4. THE ASSESSEE IS A CO-OPERATIVE SOCIETY AND THE APEX BODY OF PRIMARY HOUSING CO-OPERATIVE SOCIETIES ESTABLISHED UNDER THE M.P. CO-OPERATIVE SOCIETIES ACT. THE MAIN OBJECTS OF THE SOCIETY IS T O PROVIDE HOUSING FACILITIES IN THE STATE OF M.P. THROUGH THE HOUSE CONSTRUCTION INSITUTIONS AND TO FULFIL THIS OBJECT THE ASSESSEE WAS PROVIDING LOAN S AND ADVANCES TO THE MEMBER INSTITUTES AND MAKE INDIVIDUALS AGAINST THE MORTGAGE OF IMMOVABLE PROPERTY AND OTHER SECURITIES. THE MAIN SOURCES OF THE INCOME OF THE ASSESSEE WERE FOUND TO BE INTEREST FROM VARIOUS SOCIETIES TO WHOM LOAN/ADVANCES HAS BEEN MADE. THE OTHER INCOMES ARE RENT FROM THE PROPERTY OWNED BY THE ASSESSEE INTEREST ON UTI AND BANK DEPOSITS INTEREST ON ADVANCES TO EMPLOYEES AND INSTITUTE MEMBERS AND MISCELLANEOUS INCOME. 5.WHILE PLEADING ON BEHALF OF THE ASSESSEE THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE A.O.S ORDER FOR NOT CONSIDERING THE INTEREST INCOME OF RS . 20 43 750/- AND MISC. INCOME OF RS. 51 783/- FOR DEDUCTION U/S 80-P. ASSESSEE IS ENTITLED FOR SPECIAL DEDUCTION U/S 80P(2)(A)(I) OF THE INCOME-TA X ACT 1961. THE AMOUNT OF RS. 20 43 750/- IS INTEREST ON THE FDR IN BANKS INTEREST ON DEPOSITS WITH UTI INTEREST ON SB A/C BALANCES INTEREST AS HAVING LOAN TO EMPLOYEES INTEREST AS VEHICLE LOAN COMPUTER LOAN GRAIN ADVANCES OTHER ADVANCES TO EMPLOYEE INTEREST AS ADVANCES TO MEMBERS OF FEDERATION AND INTEREST ON I.T. REFUNDS. THE MISC. INCOME INCLUDES RS. 40 000/- AS INCENTIVE FROM UTI AND INCOME FROM GUEST HOUSE OF RS. 11 783/-. DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 6 OF 14 6. THE LD. AUTHORIZED REPRESENTATIVE RELIED ON VARIOUS DECISIONS OF SUPREME COURT AND HIGH COURTS AND ALSO THE DECISION OF I.T.A.T. INDORE BENCH. HE PLEADED THAT I.T.A.T. INDORE BENCH IN I.T.A.NOS. 394/IND/2000 AND 3/IND/2003 IN THE CASE OF JT. CIT VS. INDORE PARASPAR SAHKARI BANK ORDER DATED 23.1.2003 THE I.T.A.T. HAS HELD AS UNDER :- 4.4 WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF THE MATERIAL AVAILABLE ON RECORD AND HAVE GONE THROUGH THE ORDER IMPUGNED AS WELL AS THE JUDGMENTS RELIED ON BY THE LD. AUTHORIZ ED REPRESENTATIVE. IN THE CASE OF CIT V. KARNATAKA STA TE CO.OP. APEX BANK (SUPRA) THE HON'BLE SUPREME COURT WAS PLEASED TO HOLD THAT THE INTEREST ARISING FROM THE INVESTMENT MADE IN COMPLIANCE WITH STATUTORY PROVISIONS TO ENABLE IT TO CARRY ON BANKING BUSINES S OUT OF RESERVE FUND BY A COOPERATIVE SOCIETY ENGAGE D IN BANKING BUSINESS IS EXEMPT U/S 80P(2)(A)(I) OF T HE INCOME-TAX ACT 1961. THE PLACEMENT OF SUCH FUNDS BEING IMPERATIVE FOR THE PURPOSE OF CARRYING ON BANKING BUSINESS THE INCOME THEREFROM WOULD BE INCOME FROM THE ASSESSEES BUSINESS. THERE IS NOTHING IN PHRASEOLOGY OF SECTION 80P(2)(A)(I) WHIC H MAKES IT APPLICABLE ONLY TO INCOME DERIVED FROM WORKING OR CIRCULATING CAPITALS. THE HON'BLE SUPREM E COURT IN THE CASES OF MAHSANA DISTT. CENTRAL CO-OP . BANK LIMITED V. CIT (SUPRA) AND IN CIT V. RAMNATH- PURAM DISTT. CO-OP. CENTRAL BANK LIMITED (SUPRA) HA S BEEN PLEASED TO FOLLOW THE DECISION TAKEN IN THE CA SE OF KARNATAKA STATE CO-OP. APEX COURT (SUPRA). THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. RATNAGIRI DISTT. CENTRAL CO-OP BANK LIMITED AND OTHERS (SUPRA) HAS BEEN PLEASED TO HOLD THAT THE ASSESSEES WERE ENTITLED TO THE DEDUCTION U/S 80P(2)(A)(I) IN RELATION TO THE INCOME FROM INDIRA VIKAS PATRA. RESPECTFULLY FOLLOWING THE RATIO OF THE DECI SION OF THE HON'BLE SUPREME COURT AND THE HONBLE DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 7 OF 14 BOMBAY HIGH COURT IN THE ABOVE CASES WE DECIDE THE GROUND AND THE ADDITIONAL GROUNDS UNDER CONSIDERATION IN FAVOUR OF THE ASSESSEE. HE FURTHER PLEADED THAT HONBLE ALLAHABAD HIGH COURT IN THE CASE OF GORAKHPUR KSHETRIYA GRAMIN BANK V. CIT (2007) 292 ITR 205 (ALL) HAS HELD AS UNDER :- HELD THAT THE BUSINESS OF BANKING COULD NOT BE CARRIED OUT WITHOUT THE AID OF THE EMPLOYEES AND THEREFORE WHATEVER AMOUNT THE ASSESSEE HAD RECEIVED EITHER TOWARDS THE EXCESS PROVISION OF PAY RECOVERED FROM RESIGNED STAFF TRAINING COST RECOV ERY AND FORFEITURE OF SECURITY OF EMPLOYEES WAS ATTRIBUTABLE TO THE ACTIVITY OF CARRYING ON THE BUS INESS OF BANKING. IT WAS NOT THE CASE OF THE REVENUE THAT APART FROM CARRYING ON THE BUSINESS OF BANKING TH E ASSESSEE WAS ALSO RUNNING THE TRAINING INSTITUTE FO R TRAINING PERSONS IN THE BANKING INDUSTRY FOR PROVID ING SERVICES OF TRAINED PERSONS TO OTHER BANKS. .. XX XX RECEIPT ON ACCOUNT OF PAY RECOVERED FROM RESIGNED STAFF RECOVERY OF TRAINING COST AND SECUR ITY FORFEITURE WERE ALLOWABLE AS DEDUCTION. HE ALSO RELIED ON THE ORDER OF THE HONBLE KARNATAK A HIGH COURT IN THE CASE OF CIT VS. GRAIN MERCHANTS C O- OP. BANK LIMITED (2004) 267 ITR 742 WHEREIN THE HONBLE HIGH COURT HELD AS UNDER : 1. THAT THE INCOME RECEIVED OUT OF THE RESERVE FUND WAS EXEMPTED FROM PAYMENT OF TAX. 2. THAT THE HOUSING SOCIETY REFERRED TO IN CLAUSE (F) OF SECTION 80P(2) MUST BE UNDERSTOOD AS A SOCIETY WHICH IS NOT CARRYING ON BANKING BUSINESS OR PROVIDING CREDIT FACILITIES WHICH IS INCLUDED U/S 80-P(2)(A)(I) OF THE ACT. IT WAS NOT IN DISPUTE THAT THE ASSESSEE WAS CARRYING ON THE BUSINESS OF BANKING. UNDER THESE CIRCUMSTANCES THE PROVISIONS OF CLAUSE (F) OF DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 8 OF 14 SECTION 80P(2) COULD NOT CONTROL THE BENEFIT OF EXEMPTION EXTENDED TO THE ASSESSEE FROM PAYMENT OF TAX. THE ASSESSEE WAS ENTITLED TO EXEMPTION IN RESPECT OF THE RENTAL INCOME RECEIVED BY IT. HE ALSO RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. AHMEDNAGAR DISTRICT CENTRAL CO-OP. BANK LIMITED & OTHERS (2003) 264 ITR 38 (BOM) WHERE THE HONBLE HIGH COURT HAS HELD THAT INCOME BY WAY OF COMMISSION FROM M.S.E.B. AND M.P.C.S. WAS ATTRIBUTABLE TO THE BUSINESS OF BANKING AS THE RELIEF U/S 80-P(1) READ WITH SECTION 80-P(2)(A)(I) OF THE INCOME-TAX ACT 1 961 WAS ALLOWABLE TO THE ASSESSEE. HE PLEADED THAT THE HONBLE APEX COURT IN THE CASE OF CAMBAY ELECTRIC SUPPLY CO.LTD. VS. CIT 113 ITR 84 HAS HELD THAT EXPRESSION ATTRIBUTED HAS TO BE GIVEN A VERY WIDE MEANING. THEREFORE THE INTEREST EARNED ON FDR ETC. QUALIFY FOR SPECIAL DEDUCTION U/S 80P(2) OF THE INCOME-TAX ACT 1961. THE AMOUNT OF RS. 20 43 750/- IS INTEREST ON THE FDR IN BANKS INTEREST ON DEPOSI TS WITH UTI INTEREST ON SB A/C BALANCES ON LOAN TO EMPLOYEES INTEREST ON VEHICLE LOAN COMPUTER LOAN GRAIN ADVANCES OTHER ADVANCES TO EMPLOYEE INTERES T AS ADVANCES TO MEMBERS OF FEDERATION AND INTEREST ON I.T. REFUNDS. THE MISC. INCOME INCLUDES RS. 40 000/- AS INCENTIVE FROM UTI AND INCOME FROM GUEST HOUSE OF RS. 11 783/-. 7. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 8. AFTER HEARING THE RIVAL SUBMISSIONS AND GOING THROUGH THE FACTS OF THE CASE WE FIND THAT THE MAIN OBJECT OF THE SOCIETY IS TO PROVIDE RESIDENTIA L FACILITIES THROUGH THE HOUSE CONSTRUCTION ACTIVITIE S THROUGH THE INSTITUTIONS. TO FULFIL THIS AIM THE ASSESSEE WAS TO PROVIDE LOAN AND ADVANCES TO THE INSTITUTION AND INDIVIDUALS AGAINST THE IMMOVABLE PROPERTY AND OTHER SECURITIES IN ADDITION TO THE DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 9 OF 14 INTEREST RECEIVED FROM THE INSTITUTIONS AND THE INDIVIDUALS TO WHOM THE LOAN WAS ADVANCED THE ASSESSEE WAS HAVING INCOME ON THE DEPOSITS WITH BANK U.T.I. THESE DEPOSITS WERE MADE OUT OF THE SURPLUS FUND AVAILABLE WITH THE ASSESSEE IN THE INTERVENING PERIOD OF MAKING THE ADVANCES AND RECOVERY OF THE LOANS. THE I.T.A.T. INDORE BENCH HAS DECIDED IN THE CASE CITED SUPRA THAT INTEREST ON IDBI BONDS AND FDRS QUALIFY FOR DEDUCTION U/S 80-P. EVEN IN THE CASE OF CIT VS. KARNATA COOP. BANK LIMITED (SUPRA) THE INTEREST ON INDIRA VIKAS PATRAS KISAN VIKAS PATRAS UTI AND IDBI BONDS WAS FOUND QUALIFIED FOR DEDUCTION U/S 80-P. THE HON'BLE SUPREME COURT IN THE CASE OF MEHSANA DISTRICT CENTRAL COOP. BANK LIMITED VS. ITO HAS HELD THAT THERE IS NOTHING IN PHRASEOLOGY OF SECTIO N 80-P(2)(A)(I) WHICH MAKES IT APPLICABLE ONLY TO INCOME DERIVED FROM WORKING OR CIRCULATING CAPITAL. EVEN INTEREST INCOME FROM IVPS HAS ALSO HELD ELIGIBLE FOR DEDUCTION. RESPECTFULLY FOLLOWING THE RATIO OF THE HON'BLE SUPREME COURT AND HONBLE HIGH COURTS AND ALSO I.T.A.T. WE HOLD THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-P(2)(A)(I) OF THE ACT ON THE INTEREST INCOME FR OM FIXED DEPOSITS WITH THE BANKS AND INTEREST FROM S. B. ACCOUNT INTEREST ON DEPOSITS WITH U.T.I. INTEREST ON LOAN TO EMPLOYEES INTEREST ON ADVANCES TO EMPLOYEES AND INTEREST ON ADVANCES MADE TO MEMBERS OF THE FEDERATION. HOWEVER INTEREST RECEIVED FROM THE INCOME TAX DEPARTMENT ON THE REFUND SHALL NOT QUALIFY FOR THE SAME AS IT CANNOT BE SAID AS ATTRIBUTABLE TO THE BUSINESS OF THE ASSESSEE. 9. REGARDING MISCELLANEOUS INCOME INCOME FROM GUEST HOUSE WE ALSO HOLD THAT THIS INCOME ALSO QUALIFY FOR DEDUCTION U/S 80-P(2)(A)(I) IN VIEW OF THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. GRAIN MERCHANTS CO-OP. BANK DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 10 OF 14 LIMITED (SUPRA) WHERE THE HONBLE HIGH COURT HAS HELD THAT FROM LETTING OUT A PART OF THE PROPERTY WAS TREATED AS INCOME FROM BANKING BUSINESS AND HELD TO BE QUALIFIED FOR DEDUCTION U/S 80-P(2)(A)(I ). WE ALSO GET STRENGTH ON THIS ISSUE FROM THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. AHMEDNAGAR DISTRICT CENTRAL CO-OP. BANK LIMITED & OTHERS ( CITED SUPRA) WHERE THE HONBLE HIGH COURT HAS HELD THAT THE COMMISSION COLLECTED FROM ELECTRICITY BILLS WAS HELD TOBE INCO ME QUALIFYING FOR DEDUCTION U/S 80-P(2)(A)(I). 10. THE INCENTIVE FROM U.T.I. OF RS. 40 000/- SHALL NO T QUALIFY FOR THE DEDUCTION U/S 80-P AS IT IS NOT IN ANY WAY ATTRIBUTABLE TO THE BUSINESS OF ASSESSEE. 11. IN VIEW OF THESE FACTS WE DIRECT THE A.O. TO ALLO W THE DEDUCTION U/S 80-P(2)(A)(I) OF THE INCOME-TAX ACT 1961 AS DIRECTED ABOVE. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER HAS BEEN PRONOUNCED ON 16 TH MAY 2008 . IF THE AFORESAID ORDER OF THE TRIBUNAL IS KEPT IN JUXTAPOSITION WITH THE FACTS OF THE PRESENT APPEAL WE FIND THAT IDENTICALLY AFTER PLACING RELIANCE UPON VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING FROM HONBLE APEX COURT AND ANOTHER DECISION OF THE TRIBUNAL IT HAS BEEN CONCLUDED THAT THE INTEREST ARISING FROM INVESTMENT MADE IN COMPLIANCE WITH STATUTORY PROVISIONS TO ENABLE THE ASSESSEE BANK/FEDERATION TO CARRY ON BANKING BUSINESS OUT OF RESERVED FUNDS IS EXEMPT U/S 80P(2)(A)(I) OF THE I. T. ACT 1961. THE DECISION IN THE CASE OF MEHSANA DISTRICT CENTRAL CO-OPERATIVE BANK LTD. (SUPRA) AND KARNATAKA STATE CO-OPERATIVE APEX BANK (SUPRA) HAVE ALREADY BEEN DISCUSSED WHEREIN IDENTICAL RATIO WAS LAID DOWN. THE DECISION IN GORAKHPUR KSHETRIYA GRAMIN BANK (292 ITR 205) (ALL) ALSO HELD IDENTICAL LY. DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 11 OF 14 THEREFORE RESPECTFULLY FOLLOWING THE SAME WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ESPECIALLY WHEN THE INTEREST INCOME ON FIXED DEPOSI TS AND SAVING BANK ACCOUNT IS VERY MUCH PART OF BANKING ACTIVITY/BUSINESS OF THE ASSESSEE. THE RATI O LAID DOWN IN THE CASE OF CIT VS. RATNAGIRI DISTRICT CENTRAL CO-OPERATIVE BANK LTD. (254 ITR 697) (BOM) FURTHER SUPPORTS THE CASE OF THE ASSESSEE. EXEMPTIO N OF INTEREST INCOME WILL BE AVAILABLE ONLY IF IT HAS ARISEN IN THE COURSE OF BUSINESS OF BANKING AND NOT OTHERWISE AS WAS HELD BY THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF A.P. COOPERATIVE CENTRAL LAND MORTGAGE BANK LTD. VS. CIT (100 ITR 472). FINALLY THE APPEAL OF THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSION OF THE HEARING. 3.1 THE LD. CIT(A) HAS ALSO CONSIDERED THE FOLLOWIN G DECISIONS ALONG WITH THE DECISION MENTIONED IN THE AFORESAID ORDER OF THE TRIBUNAL: 1. ADDL.CIT VS. AHMEDABAD DISTRICT CO-OP. BANK LTD. (1975) 101 ITR 733 (GUJ); 2. SURAT DISTRICT CO-OP. BANK LTD. VS. ITO & ORS. (2003) 85 ITD (AHD) (SB) : (203) 78 TTJ (AHD) (SB) 1; 3. CIT VS. RAJASTHAN STATE CO-OP. BANK (2004) 186 CTR (RAJ) 266 : (2004) 135 TAXMAN 504 (RAJ/204) 136 TAXMAN 458 (RAJ); 4. BIHAR STATE CO-OP. BANK LTD. VS. CIT (1960) 39 ITR 114 (SC) RELIED ON T & ANR. VS. SRI RAM SAHAKARI BANK LTD. (2004) 186 CTR (KAR) 734; DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 12 OF 14 5. ELECTO URBAN CO-OP. CREDIT SOCIETY LTD. VS. ITO ITAT CALCUTTA A THIRD MEMBER BENCH (2001) 70 TTJ (CAL) (TM) 441; 6. ITO VS. ZILA SAHAKARI BANK LTD. (1980) 9 TTJ (ALL) 505; 7. CIT VS. RAMANATHPURAM DISTT. CO-OP. CENTRAL BANK LTD. (2002) 175 CTR (SC) 297; 8. CIT VS. BANGALORE DISTT. CO-OP. CENTRAL BANK LTD. (1998) 148 CTR (SC) 226; 9. MALABAR CO-OP. CENTRAL BANK LTD. VS. CIT (1975) 101 ITR 87 (KAR.); 10. CIT VS. ORISA STATE CO-OP. HOUSING CORPORATION LTD. (1976) 104 ITR 157 (ORI); 11. KERALA CO-OP. CONSUMERS FEDERATION LTD. VS. CIT (1988) 170 ITR 455; 12. CIT VS. KARNATAKA STATE CO-OP. APEX BANK (2001) 251 ITR 13 (SC); 13. MADHYA PRADESH CO-OP. BANK LTD. VS. ADDL. CIT (1996) 134 CTR (SC) 92; 14. PUNJAB CO-OP. BANK VS. CIT (1940) 8 ITR 635 (PC); 15. CIT VS. BOMBAY STATE CO-OP. BANK LTD. VS. CIT (1975) 101 ITR 87 (KER). IN THE LIGHT OF THE ABOVE SINCE THE FACTS AND THE ISSUE ARE IDENTICAL THEREFORE FOLLOWING THE AFORESAID O RDER WE FIND NO MERIT ON THIS ISSUE IN THE APPEAL OF T HE REVENUE MORE SPECIFICALLY WHEN THE LD. FIRST APPELLATE AUTHORITY HAS FOLLOWED THE AFORESAID DECISIONS OF THE TRIBUNAL. NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE BY THE REVENUE. 4. THE LAST GROUND RELATES TO DELETION OF ADDITION OF RS.9 59 516/- OUT OF RS.12 58 019/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PF CONTRIBUTION OF EMPLOYEES. THE CIT/DR SUPPORTED THE ASSESSMENT DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 13 OF 14 ORDER WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. 4.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT THE LD. ASSESSING OFFICER DURIN G ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE HAD NOT DEPOSITED THE EMPLOYEES CONTRIBUTION TOWARDS PF ON OR BEFORE DUE DATES THUS THE EMPLOYEES CONTRIBUTION OF RS.12 58 019/- WAS TREATED AS INCOME OF THE ASSESSEE THEREFORE THE CLAIMED DEDUCTION U/S 36(1)(VA) OF THE ACT WAS NOT ALLOWED. ON APPEAL BEFORE THE LD. CIT(A) THE DETAI LS OF THE CONTRIBUTION WERE EXAMINED AS HAS BEEN MENTIONED IN PARA 6.2 (PAGE 6) OF THE IMPUGNED ORDER. ULTIMATELY IT WAS FOUND BY THE LD. CIT(A) T HAT THE TOTAL AMOUNT OF RS.2 98 503/- WAS NOT DEPOSITED TOWARDS PF ON OR BEFORE DUE DATES INCLUDING THE GRACE PERIOD THUS THE LD. CIT(A) MAINTAINED THE ADDITION TO THE EXTENT OF RS.2 98 503/- AND THE REMAINING AMOUNT OF RS.9 59 516/- WAS FOUND TO BE WITHIN THE PRESCRIBED PERIOD. AS PER THE PROVISIONS OF SEC. 36(1)(VA) OF THE ACT THE EMPLOYEES CONTRIBUT ION TOWARDS PF IS ALLOWABLE IN CASE THE ASSESSEE DEPOSITS SUCH CONTRIBUTION IN THE FUND ON OR BEFORE THE DUE DATE AS DEFINED IN EXPLANATION BELOW SEC. 36(1)(VA) OF THE ACT MORE SPECIFICALLY WHEN NO AMENDMENT HAS BEEN MADE IN THE DEFINITION OF DUE DATE PROVIDED IN THE EXPLANATION IN SEC. 43B OF TH E ACT. WHEREVER THE LD. CIT(A) FOUND THAT ANY PARTICU LAR CONTRIBUTION WAS NOT DEPOSITED WITHIN THE PRESCRIBE D PERIOD THE SAME HAS ALREADY BEEN DISALLOWED AS DISCUSSED HEREINABOVE. THE FACTUAL MATRIX THAT THE AMOUNT OF RS.9 58 516/- WAS DEPOSITED WITHIN PRESCRIBED LIMIT WAS NOT CONTROVERTED BY THE REVENUE WITH THE HELP OF ANY POSITIVE MATERIAL CONTRADICTING THE CONCLUSION DRAWN IN THE IMPUGNED ORDER THEREFORE WE FIND NO JUSTIFICATION TO INTER FERE WITH THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. DY. CIT 1(1) BHOPAL VS. M.P. STATE COOP. HOUSING FEDERATION LIMITED I.T.A.NOS. 560 & 607/I/2014 & 0 2/IND/2016 PAGE 14 OF 14 THIS GROUND OF THE REVENUE IS ALSO HAVING NO MERIT CONSEQUENTLY DISMISSED. FINALLY THE APPEAL OF THE REVENUE IS DISMISSED. 6. WE RESPECTFULLY FOLLOWING THE DECISION OF I.T.A. T. INDORE BENCH (SUPRA) DISMISS THE APPEALS OF THE REVENUE. 7. IN THE RESULT THE APPEALS OF THE REVENUE ARE DISMI SSED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 4 TH OCTOBER 2016. SD/- (..) (D.T.GARASIA) JUDICIAL MEMBER SD/- (..) (O.P.MEENA) ACCOUNTANT MEMBER * / DATED : 4 TH OCTOBER 2016. CPU*