The Tax Publishers2020 TaxPub(DT) 3386 (Mum-Trib)

INCOME TAX ACT, 1961

Section 80P(2)(a)(i)

Where assessee, a co-operative credit society, had not undertaken any of banking business and was providing credit facilities to its members only and not to general public, it would not hit by provisions of section 80P(4) and thus, entitled for deduction under section 80P(2)(a)(i) on interest and dividend earned from investments with other cooperative banks/societies.

Deduction under section 80P(2)(a)(i) - Allowability - Interest and dividend earned from investments with other cooperative banks/societies - Assessee had not undertaken any of banking business and was providing credit facilities to its members

Assessee was a registered credit co-operative society. Issue was as regards allowability of deduction under section 80P(2)(a)(i) on interest and dividend earned from investments with other cooperative banks/societies. Held: Issue involved was squarely covered in favour of assessee by decision in case of Quepem Urban Credit Society Ltd., where under identical set of facts, High Court held that interest and dividend earned from investments with other cooperative banks/societies is entitled for deductions under section 80P(2)(a)(i). In Mahapalika Kshetra Madhyamik Shikshak Sahakari Patsanstha Maryadit, it was held that where assessee, a co-operative credit society had not undertaken any of banking business and was providing credit facilities to its members only and not to general public, it would not hit by provisions of section 80P(4) and thus, entitled for deduction under section 80P(2)(a)(i). There was no dispute with regard to fact that assessee had not carried out any banking business to public at large, but was engaged in the providing credit facilities to its members only. Income earned by assessee, including interest and dividend received from investments with other co-operative society/co-operative banks was entitled for deduction under section 80P(2)(a)(i).

Followed:Quepem Urban Co-operative Credit Society Ltd. v. ACIT (2015) 377 ITR 272 (Bom) : 2015 TaxPub(DT) 2592 (Bom-HC) Mahapalika Kshetra Madhyamik Shikshak Sahakari Patsanstha Maryadit v. ITO & (Vice-Versa) (2019) 112 taxxman.com 165 (Mum) : 2019 TaxPub(DT) 7552 (Mum-Trib)Distinguished:The Totgars´ Cooperative Sale Society Limited v. ITO (2010) 188 taxmann.282 (SC) : 2010 TaxPub(DT) 1466 (SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2014-15

INCOME TAX ACT, 1961

Section 80P(2)(a)(i)

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