Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (11) TMI 1283 - ITAT CHANDIGARHDisallowance of Deduction u/s 80P(a)(i) of Income Tax Act,1961 – Conditions u/s 80P(4) - Revenue was of the view that the assessee didnot satisfied the conditions mentioned in the Explanation below Section 80P(4)to be eligible for deduction u/s 80P(2)(a)(i) - Held that:- Following Khamano Primary Cooperative Agricultural Development Bank Ltd.[ 2013 (9) TMI 558 - ITAT CHANDIGARH ] and Commissioner Of Income-Tax Versus Pondicherry Co-operative Housing Society Limited [1990 (11) TMI 132 - MADRAS High Court] - The assessee was primary co-op agriculture and rural development bank, entitled to benefit of deduction u/s 80P(2)(a)(i) of the Act - Merely because certain deficiencies were noted in not holding the meetings on periodic intervals or the membership number of members were not available in particular list, etc., does not make the activities under taken by the assessee society to be not in the nature of providing credit facilities to its members - The basic activity carried on the assessee society as enshrined in its bye laws was to provide long term loans to its members for specified purposes and the assessee admittedly was doing so - Once the primary activity of providing loans to its members had been undertaken by the assessee society, its entitlement for exemption u/s 80P(2)(a)(i) of the Act merits to be allowed. Section 80P of the Act exempted certain categories of income of co-operative societies - The income arising from the specified activities were exempt from tax and not the whole receipts of the previous year - In order to avail the exemption provided u/s 80P of the Act, onus was upon the assessee to prove that it was engaged in carrying on of one or more of the activities specified in 80P(2) of the Act - The exemption u/s 80P of the Act was not to be denied where the society was carrying on certain other activities - The underlying principle of granting exemption to a society was whether it was engaged in any of the activities falling under 80P(2) of the Act. The assessee was allowed exemption u/s 80P (2)(a)(i) of the Act on income arising from providing credit facilities to its members - However, because of the amendment by Finance Act, 2006, the insertion of section 80P(4) of the Act comes into play and its provisions are applicable to the year under appeal i.e. A.Y, 2007-08 - The subsequent amendment to section 2(24) of the Act entails that such income is includible as 'income' where the assessee is engaged in banking activities - the amended provisions of 80P of the Act come into play in respect of co-op societies, which are primary agricultural credit society or primary co-op agricultural and rural development bank - The explanation under section 80P of the Act, defined the societies - The claim of the assessee was that it was primary co-op agricultural and rural development bank i.e. society having an area of operation confined to a taluka and providing long term credit for agricultural and rural development activities - The assessee was admittedly not engaged in the banking activities and hence was not hit by the amendment by Finance Act, 2006 - Decided against Revenue.
|