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2022 (8) TMI 292 - AT - Income TaxDeduction u/s.80P(2)(a)(i) - whether the Assessee can be said to be a co-operative Bank? - HELD THAT:- Section 80P being a benevolent provision must be read liberally and reasonably and in case of any ambiguity it must be interpreted in favour of the assessee. Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd.. [2021 (1) TMI 488 - SUPREME COURT] observed that section 80P(2)(a)(i) which covers a co-operative society engaged in the business of banking or providing credit facilities to its members does not require that the assessee has to be a primary agricultural credit society. The Hon'ble Supreme Court noted that section 80P(2)(a)(i) does not require that the society has to give agricultural credit only. It further observed that once the co-operative society provides credit facility to its members, the fact that it also provides credit facility to non-members does not disentitle the society from availing of deduction. Supreme Court observed that the object of section 80P(4) was to exclude co-operative banks that function at par with other commercial banks and noted that as primary agricultural credit societies are not entitled for obtaining a banking license would not be hit by this provision. Assessee is entitled to deduction u/s.80P(2)(a)(i) of the Act as claimed and the same is directed to be allowed. Non deduction of tax at source on payment to pigmy agents - disallowance of those payments as expenses were made by the AO u/s.40(a)(ia) - plea of the Assessee before the Tribunal, that the said disallowance will only go to increase the income of the Assessee that is eligible for deduction u/s.80P(2)(a)(i) of the Act and deduction on the said enhanced income should be allowed - HELD THAT:- As revenue authorities erred in not allowing deduction u/s.80-P(2)(a)(i) of the Act on the income derived by the Assessee from providing credit facilities to its members as enhanced by the sum disallowed u/s.40(a)(ia) of the Act. The claim of the assessee in this regard is accepted and the AO is directed the give necessary relief to the assessee in this regard. Whether the rent income received by the Assessee from letting of Godowns is entitled to deduction u/s.80P(2)(e) of the Act? - HELD THAT:- AO/CIT(A) did not consider the plea of the Assessee in the light of the provisions of Sec.80P(2)(e) of the Act which provides that income derived by co-operative society from letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, is eligible for deduction but examined the said claim as one made u/s.80P(2)(a) of the Act. We therefore deem it fit and proper to direct the AO to examine this issue afresh and for this purpose the issue is set aside to the AO.
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