2012 (12) TMI 1147 - AT - Income Tax

Summary

Issues involved: The judgment involves the issue of whether the appellant is entitled to deduction under section 80P(2)(a)(i) of the Income Tax Act.

Brief facts: The appellant, a credit cooperative society, filed a return of income for the assessment year 2008-09 claiming exemption under section 80P. The Assessing Officer rejected the claim for deduction under section 80P(2)(a)(i) and brought the declared income to tax.

Appellant's appeal: The appellant appealed to the CIT(A) challenging the denial of deduction under section 80P(2)(a)(i) of the Act.

CIT(A)'s decision: The CIT(A) held that the appellant, being a cooperative credit society and not a cooperative bank, was entitled to deduction under section 80P(2)(a)(i) of the Act. The CIT(A) distinguished between cooperative banks and cooperative credit societies, concluding that the appellant fell under the latter category and was eligible for the deduction.

Revenue's appeal: The revenue, aggrieved by the CIT(A)'s decision, appealed before the Appellate Tribunal, arguing that the appellant's activities constituted banking transactions falling under section 80P(2)(a)(i) of the Act.

Tribunal's analysis: The Tribunal examined the definitions of cooperative bank and cooperative credit society under the Banking Regulation Act, 1949, and concluded that the appellant, providing credit facilities to its members and not to the general public, was a cooperative credit society. Referring to a previous Tribunal order, the Tribunal upheld the CIT(A)'s decision, stating that the appellant was entitled to deduction under section 80P(2)(a)(i) of the Act.

Decision: The Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s order directing the Assessing Officer to grant deduction under section 80P(2)(a)(i) to the appellant.