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| The Tax Publishers2020 TaxPub(DT) 3330 (Coch-Trib) : (2020) 081 ITR (Trib) 0013 INCOME TAX ACT, 1961
Section 80P(2)
As decided in the case of Mavilayi Service Co-operative Bank Ltd. V. CIT [[ITA No. 97/2016] : 2019 TaxPub(DT) 4909 (Ker-HC)] that AO had to conduct an inquiry into factual situation as to activities of assessee society to determine the eligibility of deduction under section 80P and should examine the activities of assessee and determine whether activities are in compliance with activities of a co-operative society, therefore, AO was directed to examine the activities of assessee-society before granting deduction under section 80P on interest income.
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Deduction under section 80P(2) - Allowability of deduction - Allegation that assessee was doing business of banking -
Assessee, a co-operative bank, had claimed deduction under section 80P. AO denied the deduction claimed alleging that assessee was primarily engaged in business of banking and therefore, in view of provisions of section 80P(4) which was inserted with effect from 1-4-2007, assessee was not entitled to deduction under section 80P. Held: High Court in case of Mavilayi Service Co-operative Bank Ltd. V. CIT [[ITA No. 97/2016, Order dated 19-3-2019] : 2019 TaxPub(DT) 4909 (Ker-HC)] had held that AO had to conduct an inquiry into the factual situation as to activities of assessee society to determine the eligibility of deduction under section 80P. AO should examine the activities of assessee and determine whether the activities are in compliance with the activities of a co-operative society and accordingly grant deduction under section 80P(2). Therefore, AO should follow the law laid down by High Court in case of The Mavilayi Service Co-operative Bank Ltd. v. CIT (supra) and examine the activities of the assessee-society before granting deduction under section 80P on such interest income.
Followed:Dy. CIT v. M/s. Ace Multi Axes Systems Ltd. 2017 TaxPub(DT) 5071 (SC) The Citizen Co-Operative Society Ltd. v. Asstt. CIT (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC) Mepco Industries Ltd., v. CIT & Anr. (2009) 319 ITR 208 (SC) : 2009 TaxPub(DT) 2105 (SC) TS Balaram, ITO v. Volkart Brothers & Ors. (1971) 82 ITR 50 (SC) : 1971 TaxPub(DT) 0355 (SC) The Mavilayi Service Co-Operative Bank Ltd. v. CIT [ITA No. 97/2016 Order, dated 19-3-2019] : 2019 TaxPub(DT) 4909 (Ker-HC) 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 Ltd. 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 Kil Kotagiri Tea & Coffee Estates Company Ltd. v. ITAT & Ors. (1988) 174 ITR 579 (Ker) : 1988 TaxPub(DT) 1273 (Ker-HC) The Kizhathadiyoor Service Co-op. Bank Ltd. v. ITO [ITA No. 525/Coch/2014, Order, dated 20-7-2016]
REFERRED :
FAVOUR : Matter remanded
A.Y. : 2010-11
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