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TMI Blog2016 (2) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee Rejection of claim of the assessee u/s 80(P)(2)(d) - interest on deposits with other Coop. Societies being Coop. Banks. - Held that:- Honble Supreme Court in the case of Totagar’s Co-operative Sale Society Ltd.(2010 (2) TMI 3 - SUPREME COURT ) held that a society has surplus funds which are invested in short term deposits where the society is engaged in the business of banking or providing credit facilities to its members in that case the said income from short term deposits shall be treated and assessed as income from other sources and deduction u/s 80(P)(2)(a)(i) would not be available meaning thereby that deduction u/s 80(P)(2)(a)(i) is available only in respect of income which is assessable as business income and not as income from other sources. Whereas in distinction to this , the provisions of section 80(P)(2)(d) of the Act provides for deduction in respect of income of a coop society by way of interest or dividend from its investments with other coop society if such income is included in the gross total income of the such coop society. In view these facts and circumstances we are of the considered view that the assessee is entitled to the deduction of ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8. The appellant prays that the receipts on account of transfer fees amounting to ₹ 11,00,000/- , Non-Occupancy Charges amounting to ₹ 6,04,800/- Car parking Charges amounting to ₹ 2,06,400/- and Temporary Car Parking Charges amounting to ₹ 37,290/- shall not be treated as Taxable Income in the hands of the Appellant Society. 9. Appellant also prays that it be allowed to take the deduction u/s 80P(2)(d) on interest received from Co-operative banks amounting to ₹ 14,88,107/- 2. Ground No.01 and 02 are against the confirmation of addition on account of transfer fee of ₹ 11,00,000/- received by the appellant society. The brief facts are that the assessee was formed to look after the maintenance of the flats owned by its members. The society had its own byelaws providing for various types of charges and fees etc. During the year the assessee received ₹ 11 lakhs from Ashok M. Bajaj on 10.04.2008 in respect of Flat No.3-D by way of transfer fee / contribution to amenities fund which was credited to the Common Amenities Fund. During the course of scrutiny proceedings AO added the same to the income of the assessee on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is essentially utilized for the benefit of common members and thus principles of mutuality are attracted. Facts not being in dispute, in the light of the decision of the ITAT (supra), we accept the plea of the assessee and hold that the impugned amount received in the form of contribution to common amenities fund is exempt from tax since principles of mutuality applied to the instant receipts. Under the circumstances, appeal filed by the assessee is allowed. Pronounced accordingly in the open court on the date of hearing i.e. on 10.1.2011. In view of the earlier order of this Tribunal the amount of ₹ 16,50,000/- towards common amenities fund is not taxable on the principle of mutuality as decided by this Tribunal is the assessee s own case. As regards the receipt towards share premium and entrance fee from incoming members if the said amount is received for the prupose of utilizing for the common amenities of the society then the same falls under the category of the contribution of common amenities fund and the conept of mutuality will be applicable. Accordingly, the AO to verify the same and then decide as per our observation. We also find that Jurisdictional High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer 320 ITR 414 the Hon ble High Court held that the bye-laws themselves provided for non-occupation charges. The contribution, therefore, was by the members for the purpose of mutual benefit. The object of the contribution was the purpose of increasing the society s funds, which could be used for fulfilling the objects of the society. The object of the society was to provide service, amenities and facilities to its members. In these circumstances, the principle of mutuality would apply and therefore non-occupancy charges were not taxable. In our opinion the case of the assessee case is squarely covered by the aforesaid decision. We, therefore, respectfully following the decision of the Juridictional High Court delete the addition of ₹ 6,04,500/- on account of non-occupancy charges. The AO is directed accordingly. 8. Ground No. 5 is against the enhancement of assessment by the CIT(A) by rejecting the claim of the assessee u/s 80(P)(2)(d) of the Act of ₹ 14,88,107/- being interest on deposits with other Coop. Societies being Coop. Banks. 8.1 The brief facts of the case are that the assessee had claimed deduction u/s 80P(2)(d) of the Act in respect of interest of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment with other cooperative society including co-operative bank which is included in or part of the gross total income. It was argued that the pre-condition for claiming and allowing deduction u/s 80P(2)(a)(i) is that it should be assessable under the head Income from business and not as income assessable under the head Income from Other Sources whereas the position is different for the purpose of 80(P)(2)(d) of the Act i.e the assessee should be Coop. Society and it should have income by way of dividend and interest on deposits with other Coop. Societies including banks and the heads of income under which the income is assessable are immaterial for the purpose of claiming the deduction under this section. The ld AR submitted that, therefore, the principle laid down by the Hon ble Supreme Court in the above decision is not applicable to the assessee s case as the said decision was on different provisions and therefore, the said judgement is distinguishable on facts and not applicable to the assessee. The ld. Counsel strongly relied on the decision of the Hon ble High Court of Himachal Pradesh in the case of CIT Vs. Kangra Co-operative Bank Ltd. (309 ITR 106) in which and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ety engaged in- (i) Carrying on the business of banking or providing credit facilities to its members. The whole of the amount of profits and gains of business attributable to any one or more of much attributes. (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. 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-operative society carrying on business of banking or providing credit 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 if it carries on business of the banking or providing credit facilities to its members and has income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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