TMI Blog2018 (12) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT Act to the appellant/assessee. - Decided in favour of assessee - Tax Case Appeal No.571 of 2011 - - - Dated:- 1-11-2018 - Mr. Justice T.S. Sivagnanam And Mrs. Justice V. Bhavani Subbaroyan For the Appellant : Mr.Niranranjagopalan for M/s.G.R.Associates For the Respondent : Mr.T.R.Senthilkumar JUDGMENT T.S.SIVAGNANAM, J. This appeal is filed by the assessee against the order passed by the Income Tax Appellate Tribunal Madras 'B' Bench, dated 18.07.2011 in ITA No.618/Mds/2011 for the Assessment year 2007- 08. 2. Heard Mr.Niranjan Rajagopalan for the appellant and Mr.T.R.Senthilkumar, the learned Counsel for the Revenue. 3.This Appeal has been admitted on 22.11.2011, on the following Substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer included this income for consideration in the overall deduction allowable under Section 80P(2)(c)(ii) of the IT Act amounting to ₹ 50,000/-. 5.Aggrieved by such order, the assessee preferred an appeal to the Commissioner of Income Tax (Appeals) [for short, the CIT (A)] contending that the assessee is a registered society as per Sections 2(22) and 2(13) of the TNCS Act, 1983 and that there was a direction by the Government of Tamil Nadu/Collector to set up fair price shops under the PDS of the Government of Tamil Nadu. The assessee also contended that they are entitled to deduction under Section 80P(2)(a) of the IT Act in respect of income from the PDS sales in terms of the provisions of Sections 2(22) and 2(13) of the TNCS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds raised before the CIT (A), written submissions were filed by the assessee wherein the assessee produced copies of sample sales bills to prove that the assessee sold fertilizers only to members and they contended that in view of the same, they are entitled to deduction in terms of Section 80P(2)(iv) of the IT Act. 10.Further, it is relevant to note that the TNCS Act, 1983 defines the expression 'credit society' under Section 2(13) to mean a registered society as defined under Section 2(22), which has its principal object of raising funds to be lent to its members for the purposes of agriculture, animal husbandry, etc., or for such other purposes as the Government may, by notification, specify in this behalf. Thus, a credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Government of Tamil Nadu, as communicated by the Registrar of Cooperative Societies, are binding on the appellant society. Hence, it cannot be said that the appellant carried on an activity, which was not authorized to be conducted by a credit society. 14.One more argument is advanced by the learned Senior Standing Counsel for the Revenue by contending that there were two categories of people, to whom the items under the PDS were sold. 15.We find that this argument is wholly unsubstantiated and factually incorrect. In this regard, we have earlier referred to the grounds of appeal as well as the written submissions given by the appellant/assessee before the CIT (A) wherein the appellant had produced sample sales bills to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission was not income from business and held that the assessee was not entitled to exemption under Section 80P(2)(a)(i) of the IT Act. The assessee filed an appeal before the Tribunal and it was allowed. On appeal by the Revenue to the High Court, the question, which was referred to the Court for consideration, was as to whether the income earned by way of commission from the Electricity Board and other organizations is attributable to business of banking and as such, the relief under Section 80P(1) read with Section 80P(2)(a)(i) of the IT Act was allowable to the assessee. The Division Bench of the Bombay High Court pointed out that the word 'banking' was not restricted only to accepting deposits from the customers for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble Supreme Court in the case of Citizen Cooperative Society Limited Vs. ACIT, Circle 9(1), Hyderabad [reported in (2017) 88 Taxmann.com 279] . By the said order, the review petition filed by the said society to review the judgment reported in (2017) 84 Taxmann.com 114 was rejected. 19.From the facts given in the copy of the judgment handed over to us by the learned Senior Standing Counsel for the Revenue, we find that in the decision in Citizen Cooperative Society Limited , the assessee was engaged in granting loans to general public without any approval from the Registrar of Societies. Therefore, the Court held that the assessee could not be treated as a cooperative society meant only for providing credit facilities to its me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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