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Facts
The appeals were filed by an assessee, a Primary Agricultural Cooperative Society, against orders denying deduction under Section 80P of the Income Tax Act for Assessment Years 2015-16 and 2017-18. The primary contention was whether the society, engaged in banking and providing credit facilities, qualified for the deduction.
Held
The Tribunal held that the assessee society is eligible for deduction under Section 80P(2)(a)(i) of the Act, but only to the extent of income earned from facilities extended to its members. The matter was directed to be verified by the Assessing Officer with regard to activities and member status.
Key Issues
Whether a Primary Agricultural Cooperative Society is eligible for deduction under Section 80P on income from providing credit facilities to members and non-members, and whether disallowance of gratuity provision was justified.
Sections Cited
250, 143(3), 80P, 40A(7), 270A, 288A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
order
: March 18th, 2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
The captioned appeals filed by the assessee are against separate orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2015-16 & 2017-18 respectively dated 09.06.2023, which have been passed Page 2 of 17 Page 4 of 17 Page 5 of 17 Page 9 of 17 The above income (Excluding Rs. 3,00,000.00) Rs. 18,12,400.00 is normal Business Income of assessee, as the assessee has engaged in business of Fertilizers, seeds and providing credit to member and Banking activities by maintaining all rules and regulations as mentioned in Co-operative Society's Bye-laws. Hence whole income of the assessee society should be allowed as deduction as per the Section 80P(2)(a)(i) and 80P(2)(iv) of the Income Tax act 1961. The sentence "Carrying on business of banking or providing credit facilities to its members " the whole of the amount of profit and gains from such business is clearly allowed as deduction under section 80P(2)(a)(i) of the Income Tax act 1961.The word "business of banking" covers everything i.e. member as well as non-member. The credit facilities in terms of KCC loan etc. provided to members only. Therefore, the assessee is eligible for claiming deduction u/s 80P(2)(a)(i) and 80P(2)(a)(iv). Being aggrieved the assessee lodges this appeal on grounds herein after mentioned.”