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M/s Sikar Sahkari Bhoomi Vikas Bank Limited Versus Income Tax Officer, Ward-1, Sikar.

2015 (9) TMI 177 - ITAT JAIPUR

Denial of deduction made by the Society U/s 80P(2)(a)(i) - Held that:- After going through the case laws cited by the assessee as well as byelaws of society, revealed that the assessee is not a cooperative bank but cooperative society. The exclusive provision to Sub-section (4) of Section 80P is not applicable in the case of the assessee.

The department itself has allowed deduction U/s 80P(2)(a)(i) of the Act in A.Y. 2007-08, which has not been reopened U/s 148 and no order U/s 263 wa .....

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(2)(a)(i) of the Act. - Decided in favour of assessee. - ITA No. 177/JP/2013 - Dated:- 11-8-2015 - SHRI R. P. TOLANI AND SHRI T. R. MEENA, JJ. For The Assessee : Shri Mahendra Gargiya (Adv) For The Revenue : Mrs. Neena Jeph (JCIT) ORDER PER: T. R. MEENA, A. M. This is an appeal filed by the assessee against the order dated 27/11/2012 passed by the learned C. I. T.(A)-III, Jaipur for the A.Y. 2009-10. The respective grounds of assessee s appeal are as under:- 1.1 71,62,624/-: the ld. CIT(A) erred .....

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ety U/s 80P(2)(a)(i) of the Act. The claim of deduction so confirmed/denied, being totally contrary to the provisions of law and facts kindly be allowed as claimed. 2. The A. O. & ld. CIT(A) further erred in law as well as on the facts of the case in charging interest U/s 234A, 234B, 234C and 234D of the Act and as also in withdrawing interest U/s 244A of the Act. The appellant totally denies its liability of charging and withdrawal of any such interest. The interest so charged/withdrawn, be .....

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onsideration, the assessee earned income of ₹ 71,62,624/-. Against this income, the assessee cooperative society claimed deduction U/s 80P of the same amount and declared NIL income. The ld Assessing Officer further observed that the assessee claimed before him that the assessee is a primary agricultural credit society and primary cooperative agricultural and rural development bank. As per Section 80P(4) of the Act w.e.f. 01/4/2007 only primary agricultural credit society of primary cooper .....

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t vide letter dated 23/09/2011, it was claimed that the assessee is a primary agricultural credit society and is therefore entitled for deduction U/s 80P of the Act. The ld Assessing Officer considered the definition of primary agricultural credit society as given in Bank Regulation Act, 1949, which is reproduced as under:- (1) the primary object or principal business of which is to provide financial accommodation to its members for a agricultural purposes or for purposes connected with agricult .....

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. For granting long terms finance, the bank accept hypothecation of land/residential building or any immovable property of the borrower. The ld Assessing Officer concluded that the assessee is not a primary agricultural credit society. Secondly, a primary agricultural credit society s bye laws should not permit admission of any other cooperative society as a member but Section 12 of the bye laws of M/s Sikar Sahakari Bhoomi Vikas Bank Ltd. provide for four types of members. This provision also k .....

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is to provide long term finance for the development of land as per Section 67 of the Rajasthan Cooperative Society Act, 2001 and therefore, is not primarily engaged in providing loans for agricultural activities and rural development. The ld Assessing Officer also reproduced the Board s circular dated 20/09/2010 on page 4 of assessment order. It is further held that after insertion of Sub- Section (4) of Section 80P only primary agricultural credit society of primary cooperative agricultural an .....

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80P, therefore, the deduction of ₹ 71,62,624/- claimed by the assessee bank U/s 80P(2)(a)(i) of the Act is not allowable and same was added in the income of the assessee. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the learned CIT(A), who had upheld the order of the Assessing Officer by observing as under:- It is evident from records that identical issue in the case of the appellant was decided by CIT(A) for A.Y. 2008-09 in ITA No. 314/J .....

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xplicitly clear that if a co-operative society is engaged in carrying on the business of banking or providing credit facilities to its members and its gross total income includes any income therefrom, such co-operative society is entitled for the deduction U/s 80P(2)(a)(i) of the Act. The assessee is a cooperative society and is engaged in providing credit facility to its members and deduction U/s 80P(2) had all alone been granted on that basis only. The assessee is neither a cooperative bank no .....

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g Officer allowed the deduction U/s 80P(2)(a)(i) as claimed and argued that the assessee s case is covered from the scrutiny assessment for A.Y. 2007-08 vide order dated 30/03/2009. It is further argued that the doctrine of res judicata do not apply to income tax proceeding yet however, unless there is a change in the facts and circumstances, the view taken earlier should normally be taken consistently. He relied on the decision in the case of Sardar Kehar Singh Vs. CIT (1992) 195 ITR 769 (Raj.) .....

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at par with the other commercial bank, from getting the deduction. He has drawn our attention on Board s circular on it w.e.f. 01/4/2007. The definition of income U/s 2(24)(viia) also had been amended (including providing credit facilities) carried on by a cooperative society with its members. The assessee is a cooperative society and providing credit facilities to its members but not doing any banking business or is not a cooperative bank. In absence of banking license or otherwise still conti .....

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. 5006/2013 dated 05/02/2014 wherein assessee s status was cooperative society and not a cooperative bank and exemption from the payment of tax U/s 80P(2)(a)(i) was held justified by the Hon ble Court. The other case laws relied by the ld AR are as under:- (i) CIT Vs. Bangalore Credit Cooperative Society Ltd. in ITA No. 598/2013 (Kar.) (ii) Sagar Credit Cooperative Society Ltd. Vs. CIT (2014) 40 CCH 0036 (Bang Trib). (iii) CIT Vs. Surat Vankar Sahakari Sangh Ltd. in Tax appeal No. 1150 of 2013 ( .....

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in the case of CIT Vs. Jafari Momin Vikas Cooperative Credit Society Ltd. (supra) is squarely applicable. The Hon ble Gujarat High Court has held as under:- From the above clarification, it can be gathered that sub-section (4) of section 80P will not apply to an assessee which is not a cooperative bank. In the case clarified by CBDT, Delhi Coop Urban Thrift & Credit Society Ltd. was under consideration. Circular clarified that the said entity not being a cooperative bank, section 80P(4) of t .....

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