ITO, CHENNAI vs. M/S. VEERAKERALAM PRIMARY AGRICULTURAL CO-OP. SOCEITY, COIMBATORE

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ITA 2882/CHNY/2016Status: DisposedITAT Chennai06 January 2017AY 2013-143 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Section 80P(4) applies only to cooperative banks and not to Primary Agricultural Credit Societies. Following its own prior decision in the assessee's case, the Tribunal found no reason to interfere with the CIT(A)'s order.

What were the facts?

The Revenue appealed against the CIT(A)'s decision to allow a deduction under Section 80P(2)(a)(i) to the assessee, a Primary Agricultural Cooperative Society. The Assessing Officer had denied this deduction, citing Section 80P(4) and arguing the assessee was conducting banking business.

What were the issues?

Whether a Primary Agricultural Credit Society is considered a cooperative bank for the purpose of disallowing deduction under Section 80P(4) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 80P(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH : CHENNAI

Before: SHRI ABRAHAM P. GEORGE & SHRI G. PAVAN KUMAR

आदेश / O R D E R

PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER:

In this appeal filed by the Revenue, it is aggrieved that ld.

Commissioner of Income Tax (Appeals) allowed claim of the assessee

1.

ITA No.2882/Mds/2016. :- 2 -: u/s.80 P(2)(a)(i) of the Income Tax Act, 1961 (herein after referred to as ‘the Act’).

Assessee was denied deduction of �5,08,85,733/- claimed by 2. it u/s. 80 P (2)(a)(i) of the Act by the ld. Assessing Officer relying on Sec. 80P(4) of the Act. As per ld. Assessing Officer, assessee though it claimed itself a Primary Agricultural Credit Society, it was doing banking business as defined in Section 5(b) of Banking Regulation Act, 1949. In the opinion of ld. Assessing Officer, there was a specific prohibition in Sec. 80P(4) of the Act, whereby Co-operative banks could not avail the deduction u/s.80P(2) of the Act. He denied the claim.

3.

When the matter reached the ld. Commissioner of Income Tax (Appeals), he held that assessee could not be considered as a cooperative Bank within the meaning of Sec. 80P(4) of the Act.

According to him, assessee was only a Primary Agricultural Credit Society which was eligible for deduction u/s.80 P(2)(a)(i) of the Act, for interest received from its members. In taking this view, the ld. Commissioner of Income Tax (Appeals) had followed this Tribunal order in assessee’s own case for assessment year 2008-2009 in dated 21.03.2014.

ITA No.2882/Mds/2016. :- 3 -:

4.

Now before us, ld. Departmental Representative was unable to bring up any case where a view in favour of the Revenue was taken. Application of Sec. 80P(4) of the Act is only on cooperative banks and not on Primary Agricultural Credit Society. Ld. Commissioner of Income Tax (Appeals) having followed the Tribunal order in assessee’s own case for earlier year, we do not find any reason to interfere with his order.

In the result, the appeal of the Revenue stands dismissed. 5.

Order pronounced on Friday, the 6th day of January, 2017, at Chennai.

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