TMI Blog2015 (9) TMI 1540X X X X Extracts X X X X X X X X Extracts X X X X ..... s, who are not normal Members of the society. We do not agree with the CIT(Appeals) on the issue. As in case M/s. SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd. Versus The Income Tax Officer [2014 (5) TMI 556 - ITAT CHENNAI] wherein held as evident from the definition of ‘member’ u/s 2(16) that the same includes an ‘associate member’ u/s 2(6) appended therein. In other words, the ‘nominal’ members also enjoy statutory recognition as per the Act. The net result is that once the ‘nominal’ members or non-voting members are themselves included in the definition of ‘members’, they satisfy the relevant condition imposed by the legislature u/s 80P(2)(a)(i). Under the very provision that for the purpose of impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of legislature is that associate member will not be treated as member. 4. The Commissioner of Income Tax (Appeals) ought to have considered that statutory auditor for co-op. society in his report discloses only share holder members as members and did not include the associated member in the report. 5. For the above reasons it is prayed that order of the Commissioner of Income Tax (Appeals) may be cancelled and that of Assessing Officer be restored. 3. Counsel for the assessee submits the issue in appeal has been decided by the co-ordinate bench in assessee s own case for the assessment year 2007-08 to 2009-10 in ITA No.904 to 906/Mds/2013 by order dated 6.5.2014, copy of which is placed on record. 4. Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred appeals before the CIT(Appeals). The CIT(Appeals) vide impugned orders held that the exemption u/s.80P is available to co-operative societies engaged in the business of providing credit facilities to its Members. But the assessee is providing credit facilities to Class B Members or associate Members who are not recognized as Members of the society. Therefore, the assessee is not entitled to deduction u/s.80P(2)(a)(i) of the Act. The CIT(Appeals) further observed that the profit motive cannot be denied considering the business activities of the assessee. The CIT(Appeals) dismissed the appeals of the assessee for all the three AYs. Aggrieved by the order of the CIT(Appeals), the assessee has come in second appeal before the Tribunal as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal had held that the activities of primary agricultural co-operative credit societies are not at par with co-operative banks. 4. On the other hand, Shri Anirudh Rai, appearing on behalf of the Revenue vehemently supported the impugned orders and prayed for the dismissal of the appeals of the assessee. 5. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below as well as the decisions of the co-ordinate bench of the Tribunal relied upon by the ld.AR of the assessee. In all the three appeals, the assessee has impugned the findings of the CIT(Appeals) for rejecting the claim of deduction u/s.80P(2)(a)(i) to the assessee. The CIT(Appeals) in his order h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s credit and various other loan facilities have been allowed to be availed by B class nominal members whose liability is limited, at the best; to the extent of loan repayable instead of A class members who have voting rights and dividend claim, and also that the latter members are jointly and severely liable. In this backdrop, when we peruse the relevant provisions of the State Co-operative Societies Act, 1983, governing the assessee-Society, it is evident from the definition of member u/s 2(16) that the same includes an associate member u/s 2(6) appended therein. In other words, the nominal members also enjoy statutory recognition as per the Act. The net result is that once the nominal members or non-voting members are themse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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