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Deesa Mercantile Co. Op. Soc. Ltd Versus A.C.I.T.,B.K. Circle, Palanpur

2015 (10) TMI 593 - ITAT AHMEDABAD

Eligibility of deduction u/s. 80P - Held that:- Revenue has not placed any material on record to demonstrate that Assessee is a Co-Op. Bank and is not a Credit Co-op. Society nor has placed any contrary binding decision in its support. Assessee is eligible for deduction u/s. 80P - Decided in favour of assessee. - I.T. A. No. 1108/AHD/2011 - Dated:- 28-8-2015 - SHRI ANIL CHATURVEDI AND SHRI KUL BHARAT, JJ. For The Appellant : Shri T.P. Hemani, A.R. For The Respondent : Shri Narendra Singh, Sr. D. .....

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y and thereafter the assessment was framed under section 143(3) vide order dated 24.12.2009 and the total income was determined at ₹ 5,35,780/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 09.12.2010 dismissed the appeal of the Assessee. Aggrieved by the order of ld. CIT(A), Assessee is now in appeal before us and has raised the following grounds:- 1. The Ld. CIT(A) has grossly erred in law and on the facts of the case in confirming th .....

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laim deduction u/s 80P(2)(a)(i) of the Act. 4. Both the lower authorities have erred in law and on facts in passing the orders without properly appreciating the fact and that he further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of both the authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to .....

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edings and on the basis of scrutiny of the accounts, A.O concluded that since the Assessee was carrying out business of banking it was not eligible for deduction u/s. 80P(2) of the Act in view of the amendment made to sub-section 4 in Section 80P with effect from 01.04.2007 as he was of the view that after the amendment the benefit of Section 80P was restricted only to Primary Agricultural Credit Society and Primary Co-op. Agricultural and Rural Development Bank. According to the A.O, since the .....

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P, It is only seen that Shri Sobhan Kar, Under Secretary has written that "if the Delhi Co.Op.Urhan T &, C Society Ltd. does not fall within the meaning of "Cooperative Bank" as defined in part V of the Banking Regulation Act,1949, Sub-Section) of section 80P will not apply in its case " Thus the CBDT was not given any direction as to the fact whether deduction u/s. 80Pshall be available to the assessee. It is seen that as per definition of the Co.Op. Bank mention in clau .....

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39;co-operative society means a society registered or deemed to have been registered under any Central Act for the time being in force relating to the multi state co-operative societies for the time being in force," 4.3(i) In view of the above definition, it is clear that the appellant comes under the definition of Co-operative Bank. Hence, section 80P(4) is clearly applicable to the appellant. In view of the above, the action of the AO in denying the deduction u/s,80P to the appellant is j .....

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d. (2014) 362 ITR 331 (Guj). He therefore submitted that Assessee be granted deduction u/s. 80P. The ld. D.R. on the other hand supported the order of A.O and ld. CIT(A). 8. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to allowability of deduction u/s. 80P. The Assessee was denied the deduction for the reason that it was held that Assessee being a co-operative bank and by virtue of sub section 4 of Section 80P, Assessee is .....

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dit Society Ltd. (ITA No. 647/Ahd/2011). We find that in that case also the ld. CIT(A) for exactly same reasons had denied the claim of deduction to Assessee. We find that in that case the issue was decided in favour of the Assessee by the Tribunal holding as under:- 6.Before us, at the outset the ld. A.R. submitted that the issue in the present case is directly covered by the decision of Hon ble Gujarat High Court in the case of CIT vs. Surat Vankar Sahakari Sangh Ltd. (Tax Appeal No. 1150 of 2 .....

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e have heard the rival submissions and perused the material on record. We find that ld. CIT(A) upheld the order of A.O after considering the definition of Co- Op. Bank mentioned in clause (cci) of Section 56(5) of part-V of Banking Regulation Act, 1949. We however find that the Hon ble Gujarat High Court in the case of CIT vs. Surat Vankar Sahakari Sangh Ltd. (supra). after considering the clarification issued by CBDT vide Circular No. 133 of 2007 dated 09.05.2007, decided the issue in favour of .....

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n 80P(4), the respondent assessee would not be entitled to benefits of deduction under section 80P. CIT(Appeals) as well as the Tribunal reversed the decision of the Assessing Officer on the premise that the respondent assessee not being a bank, exclusion provided in sub-section(4) of section 80P would not apply. This, irrespective of the fact that the respondent would not fall within the expression primary agricultural credit society. 6. Had this been the plain statutory provisions under consid .....

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words, continued to hold such entity as eligible for deduction. However, the issue has been considerably simplified by virtue of CBDT circular No. 133 of 2007 dated 9.5.2007. Circular provides as under:- Subject: Clarification regarding admissibly of deduction under section 80P of the Income-Tax Act, 1961. 1. Please refer to your letter no. DCUS/30688/2007, dated 28.03.2007 addressed to Chairman, Central Board of Direct Taxes, on the above given subject. 2. In this regard, I have been directed .....

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ral Co-operative Bank and a primary Co-operative bank. 4. Thus, if the Delhi Co op Urban T & C Society Ltd. does not fall within the meaning of Co-operative Bank as defined in part V of the Banking Regulation Act, 1949, sub-section(4) of section 80P will not apply in this case. 5. The issues with the approval of Chairman, Central Board of Direct Taxes. 7. 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 co-operat .....

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