TMI BlogThe Taxation of Cooperative Societies: A Legal Analysis of Deduction Eligibility U/s 80PX X X X Extracts X X X X X X X X Extracts X X X X ..... o-operative Societies Act, primarily engaged in banking and providing credit facilities to its members. The central legal issue revolves around the interpretation and application of Section 80P of the Income Tax Act, 1961 , particularly subsections (2)(a)(i) and (2)(d). This case offers a rich narrative on the nuances of tax law concerning co-operative societies, their classification, and eligi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st income received from cooperative banks and other cooperative societies should be eligible for deduction. Principle of Mutuality: The AO's initial decision was based on the principle that the society s activities were not in accordance with the principles of mutuality. This principle essentially states that income generated within a mutual association, where the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inction Between Cooperative Society and Cooperative Bank: A critical aspect of this case is the distinction between a cooperative society and a cooperative bank. The Hon ble Supreme Court and various High Courts have held that a cooperative society would not be entitled to claim deduction under Section 80P(2)(d) if it functions as a cooperative bank as defined under the Banking Regulation Act&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory interpretation, the principle of mutuality, and the classification of entities for tax purposes. The decision contributes to the evolving jurisprudence on the taxation of cooperative societies and provides guidance on interpreting Section 80P in the context of cooperative banking activities. Full Text : 2023 (12) TMI 1025 - ITAT BANGALORE - FAQ - Frequently Asked Questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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