Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (5) TMI 55 - ITAT COCHINDeduction u/s. 80P(2)(a)(i) - denial of deduction as assessee being, in substance, not a PACS inasmuch as the bulk of it’s lending is not for agriculture and allied purposes - as submitted assessee, that it is, registered as a Primary Agricultural Credit Society (PACS) under the Kerala Cooperative Societies Act, 1969 (Kerala Act), is admittedly in the business of banking - HELD THAT:- As explained therein, where and to the extent the assessee-society accepts deposits from non-members; rather, is entitled to, being permitted by it’s bye-laws, it is in the business of banking notwithstanding the area restrictions for it’s operations inasmuch as the same are applicable only qua it’s members. Rather, in such a case, being in the business of banking, even income on provision of credit to non-members would stand to be deductible u/s. 80P(2)(a)(i). The bye-laws of the assessee-society are not on record, neither stand referred to in their orders by the Revenue authorities. It is only with reference thereto would it stand to be determined as to if: (a) the assessee is a co-operative bank; and (b) the assessee is in the business of banking. The matter, accordingly, is restored to the file of AO for, on a perusal of it’s bye-laws, and after affording due opportunity of hearing to the assessee, issue specific finding/s on the two aspects afore-stated, and decide accordingly, allowing or, as the case may be, disallowing – wholly or partly, the assessee’s claim for deduction u/s. 80P(1) r/w s. 80P(2)(a)(i) of the Act. We make it clear that the assessee shall be allowed deduction u/s. 80P only if it is not a cooperative bank, i.e., as per the definition provided in Explanation below s. 80P(4). Two, where it’s bye-laws permit it to accept deposit from non-members, it is by definition in the business of banking and, accordingly, entitled to deduction on it’s profit in full, as opposed to that attributable to the provision of credit to it’s members. Assessee appeal allowed.
|