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| The Tax Publishers2019 TaxPub(DT) 0254 (Mad-HC) : (2020) 426 ITR 0244 INCOME TAX ACT, 1961
Section 80P(2)(a)(i)
Where AO himself found that associate members were also admitted as members of the society and he fell into an error in not granting any relief to assessee society, which was rightly granted by CIT(A) as confirmed by Tribunal, therefore, deduction under section 80P was allowed to assessee.
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Deduction under section 80P(2)(a)(i) - Providing credit facility to its members and associate members - Allowability -
Assessee was a co-operative society carrying on the business of providing credit facilities and claimed deduction under section 80P. AO held that deduction in respect of income of co-operative societies under section 80P was not admissible as the benefit of deduction was admissible only to those co-operative societies which carry on business of banking or providing credit facilities to its members. On the contrary, assessee-society was carrying on the banking business for public at large and its operation was not confined to its members but outsiders as well. However CIT(A) and Tribunal allowed the claim of assessee Held: AO himself found that associate members were also admitted as members of the society. In such circumstances, AO fell into an error in not granting any relief to the assessee society, which was rightly granted by CIT(A) as confirmed by Tribunal. In addition to that, AO had not pointed out that loans have been disbursed to all and in terms of Clause (b) to sub-section (4) of section 80P, society had an area of operation, operates within the taluk and will provide long term credit for agricultural and rural development activities as well. CIT(A) rightly granted the relief to assessee as confirmed by Tribunal.
REFERRED : Citizen Co-operative Society Ltd. v. Asstt. CIT (2017) 84 Taxmann.com 114 (SC) : 2017 TaxPub(DT) 2053 (SC), CIT v. M/s. Goa Staff Co-Operative Housing Finance and Federation Ltd. (2016) 73 Taxmann.com 400 (SC) : 2016 TaxPub(DT) 4360 (SC) UP Co-operative Cane Union Federation Ltd. v. CIT (1999) 237 ITR 574 (SC) : 1999 TaxPub(DT) 0090 (SC) CIT v. Tiruchengode Agricultural Producers Cooperative Marketing Society Ltd. [TCA No. 490 of 2016, dt. 2-8-2016], CIT v. M/s. Veerakeralam Primary Agricultural Co-operative Credit Society [TCA. Nos. 735 and 755 of 2014 & 460 of 2015, dt. 5-7-2016] : 2016 TaxPub(DT) 3633 (Mad-HC) CIT v. Kribhco (2012) 349 ITR 618 (Del) : 2012 TaxPub(DT) 2742 (Del-HC) and ITO v. M/s. S-1308, Ammapet Primary Agricultural Co-operative Bank Ltd. [I.T.A. No. 2338/Mds/2017, dt. 28-2-2018]
FAVOUR : In assessee's favour.
A.Y. :
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