TaxTMI 
TaxTMI 
2025 (6) TMI 2087
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....vailing law regarding deduction under Chapter VIA vis-a-vis the precedents set by the Supreme Court and High Courts passed the Assessment Order. 3. The Appellate craves the permission to add, amend, modify, alter, revise, substitute delete any or all grounds at the time of hearing of appeal." Findings & Analysis : 2. We have heard both the parties and perused the records. Admittedly, Assessee is a Co-operative Credit Society registered under Maharashtra Co-operative Societies Act, carrying on the business of providing credit facility to its members. Copy of the Certificate issued under Maharashtra Co-operative Societies Act, 1960 by Assistant Registrar-Co-operative Societies, Pune dated 24.04.1972 is on record and was also filed by assessee during Assessment Proceedings. 2.1 Assessee filed Return of Income for A.Y. 2020-21 declaring total income at Rs. NIL and claimed exemption under section 80P of the Act. The assessee's case was selected for scrutiny to verify the Chapter-VIA deductions. The Assessing Officer issued notices u/s. 142(1) of the Act and Assessee filed reply, copies of documents in response to the said notices. Assessing Officer assessed the inc....
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.... grants loans to its members. Interest is collected on the said loans granted to its members & interest is paid on said deposits kept by its members. Surplus, if any is being utilized as per the provisions of the Maharashtra Co-operative Societies Act and for the benefit of its members. An audit under the Maharashtra Co-operative Societies Act is conducted by the Co-operative Department of Maharashtra each year to ensure the proper working of the society Since the society is working for the benefit of its members and under the concept of mutuality, its entire income is deductible u/s 80P of the Income Tax Act, 1961. Following these principles the assessee has claimed deduction amounting to Rs.46218330/- u/s 80P(2)(a)(i) of the Income Tax Act, 1961. 4. Details of Bank accounts held in the name of Society during FY 19-20: Sr. No. Bank Name Account No. 1 Dombivali Nagari Sahakari Bank Ltd. 50010100001212 2 Pune Peoples Co-operative Bank Ltd. 100210001020875 3 Pune Peoples Co-operative Bank Ltd 100220601000056 4 Janata Sahakari Bank 1539/00000065 5 Janata Sahakari Bank 15220100024782 6 Udyam Vikas Bank 23/690 7 ....
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....o-operative credit society, which was also marketing the agricultural produce of its members. As seen from the facts disclosed in the decision of the Karnataka High Court in Totgars, from out of which the decision of the Supreme Court arose, the assessee was carrying on the business of marketing agricultural produce of the members of the society. It is also found from paragraph-3 of the decision of the Karnataka High Court in Totgar's Co-operative Sale Society Ltd.'s case (supra) that the business activity other than marketing of the agricultural produce actually resulted in net loss to the society. Therefore, it appears that the assessee in Totgars was carrying on some of the activities listed in clause (a) along with other activities. This is perhaps the reason that the assessee did not pay to its members the proceeds of the sale of their produce, but invested the same in banks. As a consequence, the investments were shown as liabilities, as they represented the money belonging to the members. The income derived from the investments made by retaining the monies belonging to the members cannot certainly be termed as profits and gains of business. This is why Totgar's s....
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....ibutable to any one or more of its activities. Thus, all amounts as can be attributable to the conduct of the specified businesses by a Co-operative Society will be eligible for the deduction envisaged under the statutory provision. The question that arises therefore is whether, merely because the assessee chooses to deposit its surplus profit in a permitted bank or financial institution, and earns interest on such deposits, such interest would cease to form part of its profits and gains attributable to its business of providing credit facilities to its members? In our view that question must be answered in the negative, since we cannot accept the contention of the Revenue that the interest earned on those deposits loses its character as profits/gains attributable to the main business of the assessee. It is not as though the assessee in the instant case had used the surplus amount [the profit earned by it] for an investment or activity that was unrelated to its main business, and earned additional income by way of interest or gain through such activity. The assessee had only deposited the profit earned by it in the manner mandated under Section 63 of the Multi-State Co-operative So....
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....f an appellate power in the revisional authority. This is a course of action that must be desisted from. " 9. The Hon'ble Jurisdictional High Court in the case of CIT v/s Mepco Industries Ltd. 294 ITR 121 (Madras) held as under : Quote, "8. Therefore, on the facts of the case, when two views are possible and it is not the case of the Revenue that the view taken by the Assessing Officer is not permissible in law, the CIT is not justified in invoking the jurisdiction under section 263 of the Act. " Unquote. 10. The Hon'ble Bombay High Court in the case of CIT Vs. Future Corporate Resources Ltd., in IT Appeal No.1275 of 2017 vide order dated September 29, 2021 held as under : Quote," 7. In the order of PCIT it is stated "in paragraph 4.3 of the assessment order, the Assessing Officer has recorded that from the details submitted by the assessee and the explanation given by him, it was observed that assessee had regular business connection with the company in which investment had been made and also there was business income to the assessee from the same. Therefore, interest expense debited by the assessee has not been considered for the calculation of dis....
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....ax Act. 6. In view of the above and for the reasons stated hereinabove, the present appeal deserves to be dismissed and is accordingly dismissed, answering the question against the Revenue and in favour of the Assessee." Unquote 11.1 The above order of Hon'ble Supreme Court was rendered in the context of the appeal filed by the Revenue against the order dated 14-10-2019 passed by the Hon'ble High Court of Judicature at Bombay in ITA No. 933/2017, by which the High Court has dismissed the said appeal preferred by the Revenue. 11.2 The Hon'ble Bombay High Court's order in ITA No. 933/2017 vide order dated 14.10.2019 in the case of Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd., emanates from the ITAT order in ITA No. 2515/MUM/2014 dated 20.05.2016. The facts recorded in the ITAT order in ITA No. 2515/MUM/2014 are that Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd.,is a Co-operative CreditSociety registered under the Maharashtra Co-operative Society Act, had claimed deduction under section 80P(2)(d) of the Income Tax Act, 1961 as well as Rs. 5,85,57,676/- claimed under section 80P(2)(a)(i) of the Act. The Assessing Officer disallowed the cl....