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2018 (3) TMI 1793 - AT - Income TaxDeduction u/s 80P(2)(a)(i) - assessee would be eligible for relief only if it falls within two categories of co-operative banks i.e., 'primary agricultural cooperative society' and 'primary co- operative aqricultural and rural development bank' - AO examined the books of accounts and found that the society had advanced loans to non-voting/non-profit sharing members and earned profit from them, however, the profit was shared only with the voting members/shareholding members and hence, principles of mutuality did not exist among all the classes of members - HELD THAT:- When the profits of the assessees are not shared with Associate Members as is done with the Members, it is clear that these assessees cases fail on the principles of mutuality. In THE CITIZEN CO-OPERATIVE SOCIETY LIMITED, THROUGH ITS MANAGING DIRECTOR, HYDERABAD [2017 (8) TMI 536 - SUPREME COURT] Hon’ble Supreme Court rejected the above assessees claim holding that the principles of mutuality was missing in that case. Although, both the Members to the transactions of these assessees are the contributors towards surplus, however, the Associate Members are not entitled to the benefits of surplus of these assessees and hence, the principles of mutuality is missing in these cases. These assessee’s cannot be treated as a Co-operative Society meant only for its Members and providing credit facility to its Members and hence they are not entitled to the benefit of section 80P(2)(a)(i) - Decided in favour of revenue
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