TaxTMI 
TaxTMI 
2021 (1) TMI 1277
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....vestments made with Jaipur Central Co-operative Bank is eligible for deduction u/s 80-P(2)(d) of the I.T Act, 1961 and thereby justified in allowing relief of Rs. 1,49,40,834/-." 3. It was submitted that the Tribunal has passed order dated 02.09.2019 in ITA No.512/JP/2019 (Assessee's appeal) and 633/JP/2019 (Department appeal) for A.Y. 2011-12 in the case of M/s. Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd., Jaipur, which was received in the office of Pr. CIT-2, Jaipur on 25.10.2019. The Tribunal while deciding the grounds of the appeal filed by the department, in para 14 of the order, has decided the issue in the combined order for AY 2011-12 and 2012-13 by holding as under:- "In the instant case for the purposes of section of the Act, Jaipur Central Cooperative Bank Ltd shall be treated as a cooperative society. Therefore, interest on FDRs placed by the assessee society with such cooperative society shall be eligible for deduction u/s 80P(2)(d) of the Act." 4. It was further submitted that in assessee's own case for A.Y. 2016-17 (ITA No. 1243/JP/2019 dated 4.03.2020), the Tribunal has set aside the issue of calculating interest u/s 80P(2)(d) to the CIT(A) s....
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....ffice of Pr. CIT- 2, Jaipur on 25.10.2019. The Tribunal while deciding the grounds of the appeal filed by the department, in para 14 of the order, has decided the issue in the combined order for AY 2011-12 and 2012-13 by holding as under:- "In the instant case for the purposes of section of the Act, Jaipur Central Cooperative Bank Ltd shall be treated as a co-operative society. Therefore, interest on FDRs placed by the assessee society with such cooperative society shall be eligible for deduction u/s 80P(2)(d) of the Act." 8. On the other hand, in assessee's own case for A.Y. 2016-17 (ITA No. 1243/JP/2019) the Tribunal has set aside the issue of calculating interest u/s 80P(2)(d) to the CIT(A) stating that it needs to be determined whether the assessee has incurred any interest expenditure in earning the interest income. The Tribunal in this case stated that: "14. The legal proposition thus laid down by the Hon'ble High Court is that the income exempted under section 80P(2) has to be arrived at separately in order to determine the income under section 80P(2) and it can never be envisaged that the total income which has been so received could be allowed ....
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....ent, have decided the issue following the combined order of the Coordinate bench for AY 2011-12 and 2012-13 also wherein it was held that for the purposes of section 80P(2)(d) of the Act, Jaipur Central Cooperative Bank Ltd shall be treated as a co-operative society. Therefore, interest on FDRs placed by the assessee society with such cooperative society shall be eligible for deduction u/s 80P(2)(d) of the Act. It further held that :- " We thus in the backdrop of our aforesaid observations are unable to persuade ourselves to be in agreement with the view taken by the lower authorities that the assessee would not be entitled for claim of deduction under Sec. 80P(2)(d), in respect of the interest income on the investments made with the co-operative bank. We thus set aside the order of the lower authorities and conclude that the interest income of Rs. 27,48,553/-earned by the assessee on the investments held with the co-operative bank would be entitled for claim of deduction under Sec. 80P(2)(d). 17. In light of above, by virtue of provisions of Section 80P(4) of the Act, the claim of the assessee under section 80(P)(2)(d) cannot be denied to the assessee society. ....
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...., in ITA No.22/JP/20 (Assessee's appeal) and 187/JP/2019(Department appeal) for A.Y. 2014-15. 14. We now refer to the contentions advanced by the ld AR. In this regard, the ld. AR submitted that the Tribunal has decided the cross appeal filed by the department and the assessee for AY 2011-12 & 2012- 13 vide order dt. 02.09.19 and for AY 2014-15 vide order dt. 30.09.2019 whereby the appeal of the assessee was allowed and appeal of the department was dismissed. Against the dismissal of departmental appeal, present misc. application has been filed. It may be noted that the department has filed appeal before ITAT for these years by taking the following Grounds of Appeal: Asstt. Year 2011-12: "Whether in the facts & circumstances of the case and in law, the CIT(A) is correct in holding that the income received from investment made with Jaipur Central Co-Operative Bank is eligible for deduction u/s 80P(2)(d) of the Income tax Act, 1961 and thereby justified in allowing relief of Rs. 1,49,40,834/-" Asstt. Year 2012-13 "Whether in the facts & circumstances of the case and in law, the CIT(A) is correct in holding that the income received from inves....
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....urt which has been brought to its notice by Ld. CIT was not considered and this being the decision of jurisdictional High Court the same is binding on the Tribunal. Accordingly, in Para 14 it held that deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure and according set aside this issue to the file of Ld. CIT(A) to examine the same afresh. 18. Now the department has filed an Misc. Application stating that in AY 2016-17, the Tribunal has set aside the issue of calculating of eligible deduction of interest u/s 80P(2)(d) to the society by referring para 14 of the order dt. 04.03.2020 in ITA No. 1243/JP/2019 (Departmental Appeal) where it was held that deduction can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt interest income but the same is not adjudicated upon by the Tribunal for AY 2011-12, 2012-13 & 2014-15 and thus there is mistake apparent on record. 19. In this regard, it was submitted that the issue raised in the Misc. Application filed by the department is not arising from the ground taken by it before the Tribunal in as much as department has filed the appeal challenging the....
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....sidered. Further in the later decision of Hon'ble Gujarat High Court, the earlier decision of Hon'ble Rajasthan High Court has been referred & considered. Thus when the Tribunal has relied on later decision of Hon'ble Gujarat High Court and in AY 2014-15 again relied on the same decision even after taking note of the decision of Rajasthan High Court and thereafter given a finding on the issue, the same cannot be considered as a mistake apparent on record solely for the reason that in AY 2016-17, the Tribunal has set aside the matter to CIT(A) on this issue. 22. Without prejudice to above, it was submitted that in AY 2011-12 & 2012-13, the assessee has also challenged the validity of the order passed by AO u/s 147 of the Act. However in para 20 of the order, it is observed since the revenue appeal is dismissed and the ground no. 2 of the assessee's cross appeal is allowed, legal ground raised by the assessee challenging the validity of the proceeding u/s 147 has become infructuous and is dismissed. Therefore, in case the Misc. Application of the department is allowed (though not arising from the ground of the department), the legal ground raised by the assessee be also recalled a....
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....come) 1022699 1214259 1220756 902765 Deduction u/s 80P(2)(d) of the Act as per return 1027719 1045298 1223026 943736 Disallowed by Assessing Officer 477863 640219 641273 76116 Deduction granted u/s 80P(2)(d) of the Act by Assessing Officer 549856 405079 581753 867618 8. We have considered the decisions cited by learned advocate for the assessee as well as the revenue. We feel that the decisions cited by the learned advocate for the assessee shall be applicable on the facts of the present case. In the case of K. Nandakumar v. ITO [1993] 204 ITR 856/[1994] 72 Taxman 223 (Ker.), the Kerala High Court has held as under: '4. The effect of Section 80AB is that, for the purpose of computing the deduction under Section 80L, the amount of income of that nature as computed in accordance with the provisions of the Act shall alone be deemed to be the amount of income of that nature. What the section means is that the net income by way of interest computed in the manner provided by the provisions of the Act shall alone be taken into account for computing the benefit. But it must be noted that payment of inte....
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....0P. (2)(d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co- operative society, the whole of such income." 6. So far as the principle of interpretation applicable to a taxing statute is concerned, we can do no better than to quote the by-now classic words of Rowlatt J., in Cape Brandy Syndicate v. IRC [1921] 1 KB 64, 71 : "...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," 7. The principle laid down by Rowlatt J., has also been time and again approved and applied by the Supreme Court in different cases including the one, Hansraj Gordhandas v. H. H. Dave, Assistant Collector of Central Excise and Customs, AIR 1970 SC 755, 759. 8. Section 80P(2)(d) of the Act allows whole deduction of an income by way of interest or dividends derived by the cooperative society from its investment with any other cooperative society. This provision does not ....
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.... assessee and against the revenue. The order passed by the Tribunal is accordingly quashed and set aside." 19. In light of above discussion and respectfully following the decisions referred supra, the assessee society is held eligible for deduction under section 80P(2)(d) in case of interest income of Rs. 1,49,40,834 on FDRs placed with Jaipur Central Cooperative Bank Ltd. 20. In the result, the sole ground of Revenue's appeal is dismissed and ground no. 2 in assessee's cross appeal is allowed. Having decided the matter on merits, the legal ground raised by the assessee challenging the validity of the proceedings u/s 147 has become infructous and is dismissed." 25. For A.Y 2014-15 (in ITA no. 22 & 187/JP/2019 dated 30.09.2019), the relevant findings of the Tribunal read as under: "2.5 At the outset of the hearing, the ld. AR of the assessee submitted that the Ground No. 1 & 1.1 of the assessee and Ground No. 2 of the Revenue raised in the respective appeals are squarely covered by the decision dated 2.09.2019 of Coordinate Bench in assessee's own case in ITA No. 512 & 513/JP/2015 for the Assessment Year 2011-12 and 2012-13 and Revenue's appeal....
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.... case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra) which has been brought to our notice by the ld. CIT DR was not considered and being the decision of the Jurisdictional High Court, the same is binding on the Tribunal and therefore, to this extent the decision rendered by the Co-ordinate Bench for earlier years stand distinguishable. In the case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra), the Hon'ble Rajasthan High Court has held as under:- "3. We have considered the arguments of the learned counsel for the revenue. The provisions of section 80P contemplate the deduction of income of co-operative societies. It is provided under sub-section (1) that where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in subsection (2), there shall be deducted, in accordance with and subject to the provisions of that section, the sums specified in sub-section (2) in computing the total income of the assessee. Sub-section (2)(d) refers to the sum in respect of income by way of interest or dividends derived by the cooperative society from its investments with any other cooperative society, the whole of such ....
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....der section 80P(2) and it can never be envisaged that the total income which has been so received could be allowed without deducting the expenditure incurred in earning the income. The use of the words 'the whole of the amount of profits and gains of business attributable to any one or more of such activities' appearing at the end of sub-section (2) of section 80P could be only for such income which is attributable to the activities which are exempted. In order to ascertain the real profit, the expenses incurred in earning the said income has to be deducted. In the present case, the Tribunal has found that allowing the deduction for commission at 50 per cent of the receipts is justified. The Tribunal has relied upon the decision in the case of Cloth Traders (P.) Ltd. v. Addl CIT [1979] 118 ITR 243 (SC), which was overruled by the Apex Court in the case of Distributors (Baroda) (P.) Ltd. v. Union of India [1985] 155 ITR 120. Following the decision of this Court in the case of CIT v. Loonkar Tools (P.) Ltd. [1995] 213 ITR 721, DBITR Application No. 1 of 1987, decided at Jodhpur on 21-7-1994, we are of the view that the Tribunal was not justified in holding that the a....
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....t was made and not at the beginning or at the end of the year. In the instant case, merely stating that the assessee has interest free funds by way of share capital and accumulated profits at the yearend will not help the case of the assessee as the same reflect the position subsequent to deployment of funds in FDRs which were placed sometime during the year and not at the end of the year. Further, whether such interest free funds at the yearend are liquid funds or are represented by fixed assets and other currents. In case, there are no liquid funds and all the funds are deployed in fixed and current assets, then the said theory of interest free funds doesn't support the case of the assessee. Though the ld AR has submitted some figures, however, we find that the matter require further information and verification and in absence of findings of the lower authorities, for the limited purposes of verification of the aforesaid contention, the matter is set-aside to the file of the ld CIT(A) to examine the same afresh. In the result, the respective grounds of appeal are disposed off." 27. We therefore find that the issue of quantum of deduction u/s 80P(2)(d) i.e, wh....
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....dated 4.03.2020 held that in the earlier decisions so rendered for A.Y 2011-12, AY 2012-13 and A.Y 2014-15, the Coordinate Benches have relied on the Hon'ble Gujarat High Court decision in case of Surat Vankar Sahakari Sangh Ltd vs ACIT (supra) and the decision of the Hon'ble Rajsthan High Court in case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra), which has been brought to its notice by the ld. CIT DR, was not considered and being the decision of the Jurisdictional High Court, the same is binding on the Tribunal and therefore, to this extent the decision rendered by the Co-ordinate Bench for earlier years stand distinguishable. And following the decision of the Hon'ble Rajasthan High Court in case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra), it held as under: "14. The legal proposition thus laid down by the Hon'ble High Court is that the income exempted under section 80P(2) has to be arrived at separately in order to determine the income under section 80P(2) and it can never be envisaged that the total income which has been so received could be allowed without deducting the expenditure incurred in earning the income. In light of the same, the deduction ....
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....n our considered view, the orders so passed by the Coordinate Benches thus need to be recalled for limited purposes of adjudication of the said matter afresh taking into consideration the decision rendered by the Hon'ble Rajasthan High Court way back on 12.01.1995 much prior to the two decisions rendered by the Co-ordinate Benches. 32. Further, we agree with the contention advanced by the ld AR that the legal issue challenging the validity of order passed u/s 147 was earlier dismissed as infructious for A.Y 2011-12 and A.Y 2012-13 as the matter was only decided on merits and the same should be also be recalled and decided afresh. 33. In the entirety of facts and circumstances of the case, we hereby recall the earlier orders so passed by the Coordinate Benches in ITA No. 633/JP/19 & 512/JP/19 for A.Y 2011-12 and 634/JP/19 & 513/JP/2019 dated 02.09.2019 and subsequent order passed by the Tribunal in ITA Nos. 187/JP/19 & 22/JP/19 dated 30.09.2019 for A.Y 2014-15 for the limited purposes of adjudication of matter relating to quantum of deduction eligible for deduction u/s 80P(2)(d) as to whether the deduction should be allowed on gross interest or net interest income afresh takin....