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TMI Blog2014 (6) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... ein after referred to as 'the Act'). 2. The assessees are primary agriculture co-operative credit societies registered under the Tamil Nadu Co-operative Societies Act, 1983 (herein after referred to as 'the Societies Act'). The societies for the Assessment Years (AYs) under consideration in their respective return of income claimed deduction u/s.80P(2) of the Act. The Assessing Officer in scrutiny assessment proceedings held that although the assessees are registered as primary agriculture society but the assessees are engaged in the activities akin to commercial banking and have earned income at par with commercial banks. The Assessing Officer held that since the assessees are extending loan for non-agricultural activities, they are not e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholders of the society. Section 2(16) of the Tamil Nadu Co-operative Societies Act, 1983 defines 'Member' which includes Associate Member. The ld.AR further submitted that the case of the assessees is squarely covered by the decision of the co-ordinate bench of the Tribunal in ITA No.292/Mds/2014 in the case of M/s.SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd., Vs. ITO decided on 17-03-2014. In the said case, the Tribunal has held that for availing deduction u/s.80P, classification of Members as 'A' and/or 'B' is irrelevant. 4. On the other hand, Shri Guru Bhashyam, appearing on behalf of the Revenue vehemently supported the impugned orders and prayed for the dismissal of the appeals of the assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iety. We do not agree with the CIT(Appeals) on the issue. The authorities under the Act cannot go beyond their jurisdiction and make classification within a classification of members to deny the benefit of deduction. The co-ordinate bench of Tribunal in the case of M/s.SL(SPL) 151, Karkudalpatty Primary Agricultural Cooperative Credit Society Ltd., Vs. ITO (supra) has dealt with this issue. The findings of the Tribunal are as under: "7. We have heard both parties and gone through the case file. As stated in the preceding paragraphs, the CIT(A) has proceeded to enhance the assessment(supra) only on the ground that the assessee's credit and various other loan facilities have been allowed to be availed by 'B' class 'nominal' members whose lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entions of the assessee". 7. Similar issue had come up before the Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Punjab State CoITA. operative Bank Ltd., reported as 300 ITR 24, wherein the Hon'ble High Court had decided the issue in favour of the assessee. 8. The issue in present set of appeals is similar to the one adjudicated by the co-ordinate bench in the case of M/s.SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd., Vs. ITO (supra). Accordingly, we hold that the assessees are eligible to claim benefit of deduction u/s.80P(2)(a)(i) of the Act. In the result, the appeals of the assessees are allowed. Order pronounced in the open court at the time of hearing on Monday, the 9th June, 2014 at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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