INCOME TAX ACT, 1961

Section 80P

Deduction under section 80P - Allowability - Gold loans whether disbursed for purpose of agricultural purposes or not by assessee-co-operative societies -

Assessee was co-operative societies registered under Kerala Co-operative Societies Act, 1969. Issue was as regards disallowance of claim of deduction as assessee was essentially doing business of banking, and in view of insertion of section 80P(4) with effect from 01.04.2007, assessee was held to be not entitled to deduction under section 80P. Held: Gold loans may or may not be disbursed for agricultural purposes. Necessarily, AO had to examine details of each loan disbursement and determine purpose for which loans were disbursed, i.e., whether it was for agricultural purpose or non-agricultural purpose. Such a detailed examination was not by AO. AO was directed to list out instances where loans were disbursed for non-agricultural purposes and accordingly conclude that assessee's activities were not in compliance with activities of primary agricultural credit society functioning under Kerala Co-operative Societies Act, 1969, before denying claim of deduction under section 80P(2).

Followed:The Mavilayi Service Co-Operative Bank Ltd. v. CIT (2019) 414 ITR 67 (Ker.) (FB) (HC) : 2019 TaxPub(DT) 4909 (Ker-HC)

REFERRED : DCIT v. Ace Multi Axes Systems Ltd. 2017 TaxPub(DT) 5071 (SC) The Citizen Co-Operative Society Limited v. ACIT (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC) The Chirakkal Service Co-Operative Bank Ltd. v. CIT (2016) 384 ITR 490 (Ker.) : 2016 TaxPub(DT) 1770 (Ker-HC) Perinthalmanna Service Co-Operative Bank Limited v. ITO (2014) 363 ITR 268 (Ker) : 2014 TaxPub(DT) 1572 (Ker-HC) Antony Pattukulangara v. E.N. Appukuttan Nair & Ors. [2012 (3) KHC 726]

FAVOUR : In assessee's favour

A.Y. : 2011-12

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