Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 567 - AT - Income TaxDenial of deduction u/s 80P - assessee is a co-operative society registered under Karnataka co-operative societies act 1959 and is engaged in the business of providing credit facilities to its members and distribution of ration card - HELD THAT:- First part of Sec.80P(2)(a)(i) allows deduction in respect of income derived by a co-operative society from business of banking. Even claim of the assessee for deduction requires to be examined under first part of Sec.80P(2)(a)(i) - Hon'ble Supreme Court in case of Citizen Co- operative Society Ltd. [2017 (8) TMI 536 - SUPREME COURT] has held that, it is also important to ascertain as to what is the nature of income which is claimed as exempt, and as to how principle of mutuality is not violated in respect of such income. An examination of (i) memorandum of association, articles of association, (ii) byelaws and other documents explaining rules and regulations of the society is necessary, so as to clearly understand the purpose and the nature of business done by it. An examination of different categories of members of a society and what are the conditions attached to their being admitted as members and their rights as contributors of funds to the society and participants in surplus and the byelaws of the society is necessary. Deduction u/s.80P2(a)(i) is allowed only in respect of income arising out of transactions with members. The relevant law governing co-operative Society of State providing status of different categories of members, in so far as affairs of co- operative Society are concerned, is also required to be examined. It is only income which arises from dealing with members and which is either in the nature of banking or providing credit facilities to members that would be allowed as deduction. All these aspects requires examination. Ld.AO will allow opportunity of being heard to the Assessee and filing appropriate evidence, if desired, by the Assessee to substantiate its case, before deciding the issue. - Assessee appeal stands allowed for statistical purposes.
|