Case Law Details
Solitaire CHS Ltd. Vs PCIT (ITAT Mumbai)
Though the co-operative banks pursuant to the insertion of subsection (4) to Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a co-operative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under Sec.80P(2)(d) of the Act.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal filed by the assessee is directed against the order passed by the Pr. Commissioner of Income Tax-26, Mumbai, dated 14.03.2019 under Sec.263 of the Income Tax Act, 1961 (for short „Act‟). The assessee has assailed the impugned order on the following grounds of appeal before us:
“Being aggrieved by the order of the learned Principal Commissioner of Income-tax- 26, Mumbai, dated 15.03.2019, the Appellant prays to prefer the present appeal on the following ground:
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OFFHAND (to repeat and reiterate):
Assessee, a CHS, has claimed that interest earned on FDs with a co¬-operative bank, – which is a ‘co-operative society’ within its wider meaning of the law,- is deductible U/s.80P(2)(d). The ITAT has upheld the claim for tax exemption on the stated ground.
Be that as it may, in any view, in the case of a ‘housing association’ (including a ‘CHS’), by virtue of the well settled common law “Doctrine of Mutuality” , there is no scope for taxing it under the IT Act. For MORE look through the in-depth discussion HERE
https://taxguru.in/author/vswami/
6. Housing Association & ‘’Mutuality”- (Supplement II)
7. HOUSING ASSOCIATION -Mutuality Principle- Supplement I
8. “Mutuality’ – Doctrine of- A Critical Study
Also, suggest going through the plethora of case law cited therein.