TMI Blog2015 (10) TMI 1380X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax (Appeals) has denied deduction to the assessees only for the reason, that credit facilities have been extended to a particular class of members, who are not normal members of the society. We do not agree with the Commissioner of Income-tax (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 the Tribunal in the case of SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd. v. ITO [2014 (5) TMI 556 - ITAT CHENNAI] has held held under the very provision that for the purpose of impugned deduction, it is irrelevant so far as classification of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red whether they are correct in making the claim for deduction under section 80P(2)(a)(i) of the Act. The learned Commissioner of Income-tax (Appeals) held that the assessees is a primary agricultural credit society and its claim is allowable under section 80P(2)(a)(i) of the Act. However, the Commissioner of Income-tax (Appeals) held that the assessees are not engaged in the business of providing credit facilities to its members only but extending loans to class B members who are all nominal members and not recognising them as members for audit. Hence, the assessees does not qualify for deduction under section 80P(2)(a)(i) of the Act. 3. Counsel for the assessees reiterating the submissions made before the Commissioner of Income-tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth sides. Perused orders of the lower authorities and the decisions relied on. The co-ordinate Bench of this Tribunal in the case of S6608 Narasingapuram PACB Ltd. v. ITO in I. T. A. No. 919/Mds/2013 dated May 23, 2014 considered a similar issue and allowed the claim of the assessees under section 80P(2)(a)(i) of the Act holding as under (page 247) : 3. Shri M. Narayanan, appearing on behalf of the assessees submitted that, the Commissioner of Income-tax (Appeals) has disallowed deduction under section 80P(2)(a)(i) on the ground that the assessees has extended credit facilities to associate members, i.e., 'class B' members and the income earned from them is not eligible for deduction. The learned authorised represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mently supported the impugned order and prayed for the dismissal of the appeal of the assessees. 5. We have heard the submissions made by the representatives of both sides and have perused the orders of the authorities below as well as the decisions of the co-ordinate Bench of the Tribunal relied upon by the learned authorised representative of the assessees. In appeal, the assessees has impugned the findings of the Commissioner of Income-tax (Appeals) for rejecting the claim of deduction under section 80P(2)(a)(i) to the assessees. The Commissioner of Income- tax (Appeals) in his order has held that the assessee-society is not a co-operative bank, therefore, the provisions of section 80P(4) are not attracted. However, the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith 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 Commissioner of Income-tax (Appeals) 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 liability is limited, at the best ; to the extent of loan repayable instead of A class members who have voting rights and dividend claim, and also that the latter members are jointly and severally liable. In this backdrop, when we peruse the relevant provisions of the State Co-operative Societies Act, 1983, governing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue in favour of the assessees. The learned Departmental representative has not been able to controvert the contentions of the authorised representative. 8. The issue in appeal is similar to the one adjudicated by the coordinate Bench in the case of SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd. v. ITO (supra). Accordingly, we hold that the assessees are eligible to claim benefit of deduction under section 80P(2)(a)(i) and (iv) of the Act. In the result, the appeal of the assessees are allowed. 6. As the issue is identical, respectfully following the decision of the coordinate Bench of this Tribunal, we hold that the assessees are entitled for deduction under section 80P(2)(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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