TMI Blog2017 (8) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... e Societies Act, 1969. Since the Hon’ble Kerala High Court [Supra] has categorically held that a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969 is entitled to the benefit of deduction u/s. 80P(2) of the Act, we are of the view that the CIT(A) is justified in directing the Assessing Officer to grant the benefit of deduction u/s. 80P(2) of the Act. - Decided against revenue - I.T.A. Nos. 430 to 432/Coch/2016, C.O. Nos. 33 to 35/Coch/16 - - - Dated:- 24-7-2017 - Shri Abraham P. George, AM And George George K., JM Revenue by : Shri A. Dhanaraj, Sr. DR Assessee by : Shri C.A. Jojo ORDER Per Bench These appeals at the instance of the Revenue and the Cross Objections prefe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be conducted into the factual situation whether co-operative bank is conducting the business as Primary Agricultural Credit Society or a Primary Co-operative agricultural and rural development bank and depending upon the transactions, the Assessing Officer has to extend the benefits available and not merely looking at the registration certificate by the Kerala Co-operative Societies Act or the nomenclature . 5. In view of the above, the reliance placed by the CIT(A) in the decision of the Hon ble High Court of Kerala in the case of M/s. Chirakkal Service Co-operative Bank and others in I.T.A. No. 212 of 2013 is not correct, especially when a contrary view was taken by another division bench of the High Court in the case of M/s. Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction u/s. 80P(2) of the Act was that the assessee was primarily engaged in the business of banking and in view of the provisions of section 80P(4), the co-operative society doing business of banking is not entitled to the benefit of deduction u/s. 80P(2) of the Act. 5. Aggrieved by the action of the Assessing Officer in denying the claim of deduction u/s. 80P(2) for the assessment years 2009-10 to 2011-12, the assessee filed the appeals before the first appellate authority. The CIT(A) partly allowed the appeals of the assessee. The CIT(A) directed the Assessing Officer to grant deduction u/s. 80P(2) of the Act for the assessment years 2009-10 to 2011-12. The CIT(A), In taking the above view, relied on the judgment of the Hon ble Kerala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace on the Hon. Supreme Court judgment reported in 203 ITR 1027 case of Sabarkanthe Zilla Kharid Vechan Sangh vs. CIT (held what was deductible u/s. 80P(1) was only that portion of said amount as can be called total income attributable to activities defined in clause (5) of 80B i.e. deduction from tax available only in relation to net profit and not gross profit). 2. Further in view of the provisions of 80P(4) of the I.T. Act and amendment made to S-2(v) in the Kerala Co-op Societies Act (Amendment) Act 2010, Act 7 of 2010, order of AO CIT(A) be upheld and appeal filed by assessee be dismissed. 3. As may be seen from para 1 above, appellant assessee has filed return of income for the AY 2007-08 to 2010-11 beyond limit give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of that Act. The parliament, having defined the term 'co-operative society' for the purposes of the BR Act with reference to, among other things, the registration of a society under any State law relating to co-operative societies for the time being; it cannot but be taken that the purpose of the societies so registered under the State Law and its objects have to be understood as those which have been approved by the competent authority under such State law. This, we visualise as due reciprocative legislative exercise by the Parliament recognising the predominance of decisions rendered under the relevant State Law. In this view of the matter, all the appellants having been classified as primary agricultural credit societies by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have stated herein above. For this reason, it cannot but be held that the appellants are entitled to exemption from the provisions of section 80P of the IT Act by virtue of sub- section 4 of that sect; on. In this view of the matter, the appeals succeed. 17. In the light of the aforesaid, we answer substantia1 question 'A' in favour of the appellants and hold that the Tribunal erred in law in deciding the issue regarding the entitlement of exemption under section 80P against the appellants. We hold that the primary agricultural credit societies, registered as such under the KCS Act; and classified so, under that Act, including the appellants are entitled to such exemption. 8.2 In the instant case, admittedly, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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