9911796707
TMI Blog2016 (11) TMI 1603X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act? ii) Whether the authorities below are justified in disallowing the contribution made to unrecognized Superannuation Fund. i) Whether the assessee is entitled to the benefit of deduction u/s. 80P(2)(a)(i) of the Act. 5. The Assessing Officer had denied the benefit of deduction u/s. 80P(2) of the Act for the assessment years 2010-11 and 2011-12. The Assessing Officer held that the assessee is engaged in the business of banking and in view of section 80P(4), since the assessee is not a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank, it is not entitled to deduction u/s. 80P(2) of the Act. The relevant finding of the Assessing Officer for the assessment year 2010-11 reads as follows: "(3) As per return of income the assessee claimed a deduction of Rs. 70,70,11,107/- u/s. 80P(2)(a)(i). The allowability of the above mentioned deduction is discussed due to the change in amendment of section 80P by insertion of sub-section 4 with effect from the assessment year 2007-08. Assessee's authorized representative Shri V. Devarajan vide letter dated 19/12/2012 stated that" U/s. 80P(2)(a)(i), the whole of the amount of profits a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80P given as under, "Primary cooperative agricultural and rural development bank is a society having area of operation confined to taluk and principal object of which is to provide long term credit for agricultural and rural development activities." The definition of primary agricultural credit society is with reference to part V of Banking Regulations Act, 1949. As per part V of Banking Regulations Act, 1949. As per Part V of Banking Regulations Act, 1949 primary agricultural credit society means a cooperative society:- (1)The primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes for purposes connected with agricultural activities (including market of crops), and (2The bye-laws of which do not permit admission of any other cooperative society as a member: Provided that this sub-clause shall not apply to the admission of a cooperative society out of funds provided by the State Government for the purpose." (5) Thus considering the definitions of the above mentioned two primary units, the assessee does not fit into the definition of the above mentioned two primary units. It is an apex co-operativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of section 80P of the IT Act. 15. Having held as aforesaid, the question for further consideration is as to whether the appellant is also a primary agricultural credit society. We proceed to decide that issue. 16. In terms of Clause (a) of the Explanation to section 80P(4), "primary agricultural credit society" takes the meaning assigned to it in Part V of the BR Act. Clause (cciv) of Section 5 of BR Act defines the term 'primary agricultural credit society'. It reads as follows:- (cciv) "primary agricultural credit society" means a co-operative society,- (1) The primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including the marketing of crops); and (2) The bye-laws of which do not permit admission of any other co-operative society as member: Provided that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State government for the purpose. To fall under the aforesaid de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibution to the staff retirement benefit fund cannot be entertained and need be rejected. My predecessor vide order in I.T.A. No. 12/T/R- 2/11-12 passed on 7.3.2013 in the appellant's own case for the A.Y. 2009-10 has also taken the same stand and rejected the appellant's claim for deduction. Meticulously following the stand taken by my predecessor, I hereby confirm the addition of Rs. 1,96,60,612/- made by the Assessing Officer. Thus, appeal on this ground is dismissed." 6.1 Aggrieved by the order of the CIT(A), the assessee has filed the present appeals before us. 6.2 The Ld. Counsel for the assessee stated that the contribution made by the assessee in the unrecognized provident fund or superannuation fund can be disallowed. However, it was submitted that when the employees withdraw the amount from such fund, to the extent of withdrawals, it should be allowed as deduction u/s. 37(1) of the Act. 6.3 The Ld. DR present was duly heard. 6.4 We have heard the rival contentions and perused the material on record. We notice that for the assessment year 2009-10 the assessee has accepted the CIT(A)'s order and no further appeal was preferred to the Tribunal. The assessee's contention t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows: The assessee is a State Level Agricultural Rural Development Bank registered under the Kerala Cooperative Societies Act. For both the assessment years, the Assessing Officer had denied the benefit of deduction u/s 80P(2) of the Act by holding that in view of introduction of section 80P(4), the assessee society is not entitled to the benefit of section 80P(2) since it is doing the business of banking and it is neither a primary agricultural credit society nor a primary cooperative agricultural and rural development bank. 7.2 Aggrieved by the order of assessment, for both the assessment years 2010-11 and 2011-12, the assessee preferred appeals to the first appellate authority. The CIT(A), following the order of the Tribunal in assessee's own case for the AY 2007-08 in ITA No. 506/Coch/2010 (order dated 23.2.2011) held that the Assessing Officer is justified in denying the benefit of deduction u/s 80P(2) of the Act to the assessee society. However, the CIT(A) held that the assessee should be granted the claim of deduction u/s 80 P(2)(a)(i) to the extend the assessee is acting as a state land development bank and for determining the deduction, the matter was remitted to the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edge about the result of the order giving effect to the ITAT's order for the Assessment year 2007-08. 7.6 The Hon'ble Kerala High Court for the AY 2007-08, while holding that the assessee is a cooperative bank, had also found that the assessee is not a primary cooperative agricultural and rural development bank. The relevant finding of the Hon'ble High Court read as follows: "8 For the purpose of section 80P(4), the term 'primary cooperative agricultural and rural development bank, is defined in clause (b) in the Explanation thereto. Apart from its principal object activities, an assessee can fall under that Explanation only if it is a society having is area of operation confined to a Taluk. The appellant does not have a case that its area of operation is confined to a Taluk. Therefore, the appellant does not belong to that category." 7.7 When the Tribunal, for the Asst Year 2007-08, had specifically directed that the activities of the assessee as a rural land development bank, is to be granted benefit of deduction u/s 80P(2), the revenue ought to have challenged the above findings of the Tribunal before the Hon'ble High Court. There is no clarify as regards the benefit of dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
