Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (12) TMI 387 - AT - Income TaxEntitlement for deduction u/s 80P – Assessee is a co-operative society registered under the Goa Co-operative Societies Act, 2001 - Whether the Assessee is entitled for deduction u/s 80P(2)(a)(i) and whether the Assessee is hit by the provisions of Sec. 80P(4) which was introduced in the statute by the Finance Act, 2006 w.e.f. 1.4.2007 - Held that:- If the co-operative society is engaged in carrying of business of banking or providing credit facilities to its members, the co-operative society is entitled for deduction on whole of the income relating to any one or more of such business - the provisions of Sec. 80P(4) mandates that the provisions of Sec. 80P will not apply to any co-operative bank other than a primary agricultural credit society or primary co-operative agricultural and rural development bank but as per the provisions of Sec. 80P(2)(a)(i), a co-operative society engaged in carrying on the business of banking or providing credit facilities to its members is entitled for deduction. Whether the Assessee is a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank – Held that:- Once the Assessee will not fall within the provisions of Sec. 80P(4), the Assessee, will be eligible to get deduction u/s 80P(2)(a)(i) in respect of whole of the income which the Assessee derives from carrying on the business of banking or providing credit facilities to its members - the assessee can receive the deposits from any person - The bye-law does not restrict the assessee for receiving the deposit only from members - the Assessee society was carrying on banking business as it was accepting deposits from the persons who were not members and was advancing loans to the non-members - the paid up share capital and reserves in the case of the Assessee is more than ₹ 1 lac - therefore, the Assessee satisfies the second condition. Sec. 21 of The Goa Co-operative Societies Act, 2001 permits admission of any other co-operative society as a member - only society registered can become the member not the co-operative society. Section 5 clause (CCV) of Banking Regulation Act, 1949 requires that the bye-laws should not permit any co-operative society to become member - The society and the co-operative societies both are different and are being registered and regulated by the different statute - Thus the third condition for becoming primary co-operative bank is also complied with - Since the assessee society does complies with all the three conditions, therefore, the assessee society does become a primary co-operative bank and in view of explanation (a) of section 80P(4) it has to be regarded as a co-operative bank and is hit by section 80P(4). The Assessee has to be regarded to be a primary co-operative bank as all the three basic conditions are complied with, therefore, it is a primary co-operative bank and the provisions of Sec. 80P(4) are applicable in the case of the Assessee and Assessee is entitled for deduction u/s 80P(2)(a)(i) – thus, the order of the CIT(A) is set aside and the AO is directed not to allow the deduction to the assessee u/s 80P(2)(a)(i) – Decided in favour of revenue. Deletion of disallowance u/s 43B – Held that:- The AO invoked section 43B in respect of audit fee payable - audit fees cannot be regarded to be a tax, duty, cess or fee or the expenditure the deduction of which is restricted u/s 43B – the order of the CIT(A) is upheld – Decided against revenue.
|