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2019 (3) TMI 1776 - AT - Income TaxGranting of deduction u/s 80P(2) - principal business carried out by the society is not according to the objectives of the primary agricultural credit society - AO had also observed that the interest income received by the as sfrom other Banks and Treasury is not eligible for deduction u/s. 80(P)(2) (d) as the interest income was received from other than co-operative society - HELD THAT:- Similar issue was considered by the Jurisdictional High Court in the case of Chirakkal Service Co-operative Bank Ltd. [2016 (4) TMI 826 - KERALA HIGH COURT] wherein bye-laws of each of the appellants do not permit admission of any other co-operative society as member, except may be, in accordance with the proviso to sub-clause 2 of section 5(cciv) of the BR Act. The different orders of the Tribunal which are impeached in these appeals do not contain any finding of fact to the effect that the bye-laws of any of the appellant or its classification by the competent authority under the KCS Act is anything different from what we have stated herein above. It cannot but be held that the appellants are entitled to exemption from the provisions of section 80P by virtue of sub-section 4 of that section. In this view of the matter, the appeals succeed. We answer substantial question 'A' in favour of the appellants and hold that the Tribunal erred in law in deciding the issue regarding the entitlement of exemption under section 80P against the appellants. We hold that the primary agricultural credit societies, registered as such under the KCS Act; and classified so, under that Act, including the appellants are entitled to such exemption. Interest income from other Banks and Treasury - AO held that the interest income received by the assessee from other Banks and Treasury is not eligible for deduction u/s. 80(P)(2) (d) as the interest income was received from other than co-operative society - HELD THAT:- We find that the issue whether the interest income earned by the PACS from other Banks and Treasury is eligible for deduction u/s. 80P is covered in favour of the assessee by the decision of this Tribunal in the case of Kizhathadiyoor Service Co-operative Bank Ltd. [2016 (7) TMI 1405 - ITAT COCHIN]. In view of the above order of the Tribunal, we are inclined to dismiss this ground of appeals of the Revenue.
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