2022 (3) TMI 721

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... society providing credit facilities to its members. A return was filed declaring Nil income after claiming deduction of Rs. 45,71,701/- u/s.80P of the Act. The Assessing Officer (AO) observed that the assessee was accepting deposits from its regular members and also nominal members. Considering the fact that there was a difference between the rights and obligations of the regular and nominal members, the AO held that the nominal members could not be considered as 'members' for the purpose of deduction u/s.80P. He also noted that the assessee earned interest income on deposits made with the banks, which was not eligible for deduction u/s.80P of the Act. In the ultimate analysis, he denied the benefit of deduction u/s.80P, which got echoed in .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... heavily relied on the judgment of Hon'ble Supreme Court in the case of Citizen Co-operative Society Ltd. vs. ACIT (supra). That was a case in which Andhra Pradesh Mutually Aided Co-operative Society Act, 1995 was under consideration, which did not admit `Nominal Member' within the ambit of the term 'Member'. Recently, the Hon'ble Supreme Court in Mavilayi Service Co- Operative Bank Ltd. vs. CIT (2021) 123 taxmann.com 161 (SC) considered its earlier judgment in Citizen Co-operative Society Ltd. vs. ACIT (supra) vide para 46 of its order. Taking note of the fact that the Citizen Co-operative Society Ltd. vs. ACIT (supra) judgment dealt with the Andhra Act wherein the term 'Member' did not include Nominal Member, the Hon'ble Suprem .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ahakari Pat Sanstha Maryadit Vs. ITO (ITA No.604/PN/2014) allowed similar deduction. In the said case, the Tribunal discussed the contrary views expressed by the Hon'ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 taxmann 309 (Kar.) allowing the deduction u/s. 80P on interest income and the Hon'ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT (2014) 110 DTR 89 (Delhi) not allowing deduction u/s.80P on interest income, earned from banks under similar circumstances. Both the Hon'ble High Courts have taken into consideration the ratio laid down in the case of Totgar's Cooperative Sale Society Ltd. 322 ITR 283 (SC). There being no direct judgment from the Hon'ble jur .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X