2016 (8) TMI 1507

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....so they are being disposed of by common order for the sake of convenience. 2. In ITA No.7203/Mum/2013 for A.Y. 2009-10, assessee has filed appeal on following grounds: 1. "The Learned Commissioner of Income Tax (Appeals) - 32 erred in confirming the order of the Assessing Officer charging to tax contribution received from members aggregating to Rs. 64,00,000/- incidental to sale of plot ["Transfer Fees"] which was exempt on the Principle of Mutuality. 2. The Learned Commissioner of Income Tax (Appeals) - 32 erred in confirming the order of the Assessing Officer charging to tax Rs. 25,20,000/- being contribution received by the Society from a member on the occasion of the use of TDR by the member and which was exempt on the Principle of....

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....me of the assessee by rejecting the deduction u/s. 80P(2)(d) of the Act of Rs. 14,88,107/- being interest on investment with other Coop. banks by following the decision in the case of Bancira Samruddihi Co-operative Housing Society Ltd.(Supra) which was passed on the basis of the decision passed by the Hon'b!e Supreme Court in the case of Totagar's Co-operative Sale Society Ltd. In the case of Totagar's Co-operative Sale Society Ltd v/s. ITAT (supra) the Hon'ble Supreme Court while interpreting the section 80P(2)(a)(1) of the Act held that surplus funds not immediately required in the business and invested in the short term deposit would be assessable under the head "income from other sources" where the Cooperative society i....

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....ociety, the whole of such income." From the close perusal of the provisions of u/s 80P(2)(a)(i) and 80P(2)(d) it is clear that the former deals with deduction in respect of profits and gain of business in case of the co-operat ive society carrying on business of banking or providing credi t facilities to its members if the said income is assessable as income from business whereas latter provides for deduction in respect of income by way interest and dividend derived by assessee from its investments with other cooperative society. Thus it is amply clear that a cooperative society can only avail deduction u/s 80P(2)(d)(i) in respect of its income assessable as business income and not as income from other sources i f it carries on business o....

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....e considered view that the assessee is entitled to the deduction of Rs. 14,88,107/- in respect of interest received/derived by it on deposits with coop. banks and therefore the appeal of the assessee is allowed by reversing the order of the CIT(A). The AO is directed accordingly." 3.2 Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so, following same reasoning, we are not inclined to concur with the finding of CIT(A) and Assessing Officer is directed to allow assessee's claim accordingly. In view of above discussions, issue regarding contribution by the members and allowability deduction u/s.80P(2)(d) is also decided in favour of the assessee because same is exempt on principles of mutuality. 4. Th....