GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (1) TMI 573 - ITAT MUMBAI

2016 (1) TMI 573 - ITAT MUMBAI - TMI - Deduction u/s 80P - CIT(A) allowed the claim even thought the assessee carries on banking business/other business in the name of credit co-operative society - Held that:- Commissioner of Income Tax (Appeals) has already examined the expenditure account of the assessee. The assessee received interest of ₹ 16,74,584/- on fixed deposits and no other interest income from FDs was credited. In the balance sheet, the accrued interest, as on 31/03/2010, on FD .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessee for its day to day activities including granting of loan to its members, meaning thereby, such reserve funds has to be invested only for the highly restricted purposed as mentioned in the bye laws of the assessee society. - Decided against revenue - ITA NO.2937/Mum/2014 - Dated:- 27-10-2015 - Shri Joginder Singh, Judicial Member, and Shri Rajesh Kumar, Accountant Member For The Revenue : Shri Randhir Gupta For The Assessee : Shri Nishit Gandhi ORDER Per Joginder Singh (Judicial Member) Th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of this appeal, at the outset, the ld. counsel for the assessee, Shri Nishit Gandhi, contended that the impugned issue is covered by the decision from Hon ble Gujarat High Court in the case of CIT vs Jafari Momin Vikas Co-op Credit Society Ltd. (Tax Appeal No.442, 443 and 863 of 2013) order dated 15/01/2014 and also the decision of the Tribunal in ITO vs M/s Bharat Petroleum Employees Co-op Credit Society Ltd. (ITA No.6905/Mum/2013) order dated 28/04/2015. This factual matrix was no consented to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Section 143(3) of the Income Tax Act, 1961 dated 16-01-2013. 2. In this appeal, the Revenue has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in allowing assessee's appeal and allowing relief u/s 8OP of the Act in the case of the assessee credit co-operative Society. 2. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred I n holding that the credit co-operative society is different f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

erative Societies Act, 1960. The society is run by the employees of Bharat Petroleum Corporation Ltd. and its main activity is providing credit facilities to its members only, who happen to be the employees of Bharat Petroleum Corporation Ltd. The society is giving loans to its members and also accepting deposits from its members. In the return of income filed for A.Y. 2010-11, it declared a gross total income of ₹ 80,98,490/- which was claimed as exempt in terms of Section 80P(2)(a)(i) of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pment bank. According to the A.O. sub clause (viia) was also inserted in clause (iv) of Section 2 to provide that the profits and gains of any business of banking (including providing credit facilities) carried by cooperative society with its members shall be included in the definition of expression income . On the basis of his combined reading of Sections of Section 2(24) (viia) and Section 80P of the Act after amendment by Finance Act, 2006, the A.O. concluded that even a cooperative society e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e assessee do not fall for consideration as banking activities as defined in Banking Regulation Act, 1949. In coming to such conclusion, the ld. CIT(A) has relied on the following decisions of the Tribunal:- (i) ITO, Wd 1(4) Pune v/ Jankalyan Nagri Sahakari Patsanstha Ltd 54 SOT 60(Pune)/24 taxmman.com 127(Pune) (2012) (ii) ITO v/s Jain Nagri patsanstha Ltd ITAT Pune Bench (2010) (iii) DCIT v/s Jayalakshmi Mahila Vivivdodeshagala Souharda Sahakari Ltd. 137 ITD 163(Panji) (2012) (iv) Sri Vasavi M .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ble Gujarat High Court in the case of CIT vs. Jafari Momin Vikas Co. Op. Credit Society Ltd. [2014] 362 ITR 331 (Guj). In this context thefollowing discussion in the judgment of Hon ble Gujarat High Court is relevant:- The Assessing Officer held that by virtue of section 80P(4), the respondent-assessee would not be entitled to the benefits of deduction under section 80P. The Commissioner (Appeals) as well as the Tribunal reversed the decision of the Assessing Officer on the premise that the res .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oned therein were meant to be excluded for the purpose of deduction under section 80P, a question would arise why then the Legislature specified primary agricultural credit societies along with primary co-operative agricultural and rural development banks for exclusion from such exclusion and, in other words, continued to hold such entity as eligible for deduction. However, the issue has been considerably Simplified by virtue of the Central Board of Direct Taxes Circular No. 133 of 2007, dated M .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

han a primary agricultural credit society or a primary co-operative agricultural and rural development bank. For the purpose of the said sub-section, cooperative bank shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949. 3. In Part V of the Banking Regulation Act, 'co-operative bank means a State co-operative bank, a Central co-operative bank and a primary cooperative bank. 4. Thus, if the Delhi Co-op. Urban Thrift and Credit Society Ltd. does not fall within t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Society Ltd. was under consideration. The circular clarified that the said entity not being a co-operative bank, section 80P(4) of the Act would not apply to it. In view of such clarification, we cannot entertain the Revenue's contention that section 80P(4) would exclude not only the cooperative banks other than those fulfilling the description contained therein but also credit societies, which are not co-operative banks. In the present case, the respondent-assessee is admittedly not a cred .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion 80P of the Act deals with the deduction of income of a society. In the case of any assessee being a Co-operative society, the whole of the amounts of profits and gains of business attributable to any of other activities referred to sub-section (2) of Section 80P shall be deducted in computing the total income of the assessee. In other words, the said income is not taxable. It is a benefit given to the Cooperative society. Section 80P(4) was introduced by Finance Act, 2006 with effect from 01 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

49); (b) "primary co-operative agricultural and rural development bank" means a society having its area of operation confined to a taluk and the principal object of which is to provide for long-term credit for agricultural and rural development activities." Therefore, the intention of the legislature is clear. If a Co-operative Bank is exclusively carrying on banking business, then the income derived from the said business cannot be deducted in computing the total income of the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

i.e. the purport of this amendment. Therefore, as the assessee is not a Co- operative bank carrying on exclusively banking business and as it does not possess a licence from Reserve Bank of India to carry on business, it is not a Co-operative bank. It is a Co-operative society which also carries on the business of lending money to its members which is covered under Section 80P(2)(a)(i) i.e. carrying on the business of banking for providing credit facilities to its members. The object of the afo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version