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The Income Tax Officer Ward 2 (2) , Range 2, Thiruvananthapuram Versus M/s. Balaramapuram Service Co-op Bank Ltd. And Vice-Versa

2017 (11) TMI 997 - ITAT COCHIN

Grant of deduction u/s 80P(2) to the assessee-society - Held that:- In the instant case, admittedly, the assessee has produced a certificate showing that it is registered as a Primary Agricultural Credit Society under the provisions of the Kerala Co-operative Societies Act, 1969. Since the Hon’ble Kerala High Court in case of M/s Chirakkal Service Co-operative Bank & Ors [2016 (4) TMI 826 - KERALA HIGH COURT] has categorically held that a Primary Agricultural Credit Society registered under the .....

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P. George, AM These appeals at the instance of the Revenue and Cross Objection at the instance of the assessee are directed against two orders of the CIT(A) dated 31.10.2016 and 05.12.2016. The relevant assessment years are 2008-2009, 2010-2011 and 2011-2012. 2. Since common issue is raised in these appeals, and they pertain to the same assessee, these appeals and cross objections were heard together and are being disposed off by this consolidated order, for the sake of convenience and brevity. .....

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a Kharid Vechar Sangh Ltd. V. CIT reported in 203 ITR 1027 (SC) had held that eligible deduction under section 81(1)(d) [substituted by section 80P by the Finance (No.2) Act, 1967 w.e.f. 01.04.1968] of the Income Tax Act, 1961 in respect of co-operative societies / banks doing both agricultural and nonagricultural activities should not be 100% of the gross profits and gains of business of such societies etc., but should be limited to the profits generated from agricultural activities alone perfo .....

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l credit society' by the competent authorities under the provisions or the Kerala Cooperative Societies Act,1969. 3. The learned CIT(Appeals) ought to have brought his attention to the decision of the honourable High Court in the case of Perinthalmanna Service Cooperative Bank Ltd, reported in (2014) 363 ITR 68 (Kerala) wherein it was held that 'with introduction of section 80P(4) necessarily, an enquiry has to be conducted into factual situation whether cooperative bank is conducting bu .....

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nourable Kerala High Court in the case of M/s Karakulam Service Cooperative Bank and (2) the honourable Karnataka High Court in the case of CIT v. Lokmanya Multipurpose Co-operative Society Ltd reported in Part 4 of 394 ITR (St.). 5. For these and other grounds that may be advanced at the time of hearing the order of the learned CIT(A), Trivandrum on the above points may be set aside and that of the Assessing Officer restored. 4. Briefly stated the facts of the case are as follow:- 4.1 The asses .....

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ion 80P(4), the cooperative society doing business of banking is not entitled to the benefit of deduction u/s. 80P(2) of the Act. 4.2 Aggrieved by the action of the Assessing Officer in denying the claim of deduction u/s. 80P(2) for the assessment years 2008-2009, 2010-2011 and 2011-2012, the assessee filed the appeals before the first appellate authority. The CIT(A) 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 a .....

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the memorandum of appeal. 4.4 The AR submitted the issue in question is squarely covered in favour of the assessee by the judgment of the Hon ble jurisdictional High Court reported in the case of Chirakkal Co-op Bank Ltd. V. CIT (supra). 5. We have heard the rival submissions and perused the material on record. The Hon ble jurisdictional High Court in the case of The Chirakkal Service Cooperative Bank Ltd & others (supra) has held that the primary agricultural credit society registered unde .....

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uestion of law, the Hon ble High Court rendered the following findings: 15. Appellants in these different appeals are indisputably societies registered under the Kerala co-operative societies Act, 1969, for sort, KCS Act and the bye-laws of each of them, as made available to this court as part of the paper books, clearly show that they have been classified as primary agricultural credit societies by the competent authority under the provisions of that Act. The parliament, having defined the term .....

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ognising 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 the competent authority under the KCS Act, it has necessarily to be held that the principal object of such societies is to undertake agricultural credit activities and to provide loans and advances for agricultural purposes, the rate 'of interest on such loans and advances to be at the rate fixed by the .....

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ltural credit societies in terms of clause (cciv) of section 5 of the BR Act, having regard to the primary object or principal business of each of the appellants. It is also clear from the materials on record that the bye-laws of each of the appellants do . not permit admission of any other co-operative society as member, except may be, in accordance with the proviso to sub-clause 2 of section 5(cciv) of the BR Act. The different orders of the Tribunal which are impeached in these appeals do not .....

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