ITO, SALEM vs. S-1308 AMMAPET PRIMARY AGRICULTURAL CO-OPERATIVE CREDIT SOCIETY LTD., SALEM

This appeal of the revenue is directed against the order of the CIT(A), Salem dated 22.03.2016 and pertains to Assessment Year 2012- 13.

Shri Pathlavath Peerya, the learned representative for the department submitted that the assessee claimed deduction under Section 80P(2)(a)(i) of the Act to the extent of Rs.3,35,90,399/-. The Assessing Officer disallowed the claim of the assessee on the ground that the assessee had transaction with non members of the cooperative society. The learned department representative further pointed out that Tamil Nadu Co-operative Societies Act, 1983 refers only members who are shareholders in the society. There is no concept of associate members under the scheme of the co-operative societies Act. In the case before us, according to the learned department representative, the assessee had transaction of providing credit facilities, trading, etc. with both the members and non members. Therefore, the assessing officer disallowed the claim of the assessee under Section 80P(2)(a)(i) of the Act.

However, on appeal by the assessee, the CIT(A) by placing reliance on the decision of this Bench of the Tribunal in in the case of M/s.SL (SPL) 151, Karkudalpatty Primary Agricultural Cooperative Credit Society Ltd. Vs. ITO dated 17.03.2014 allowed the claim of the assessee. The learned Department representative further pointed out that the revenue has already filed an appeal before the High Court against the order of this Tribunal in M/s.SL (SPL) 151, Karkudalpatty Primary Agricultural Cooperative Credit Society Ltd. cited supra. Therefore, the CIT(A) is not justified in allowing the claim of the assessee.

On the contrary, Shri M.Balu, the learned representative for the assessee submitted that the assessee had transaction with the members and associate members. The associate members have no voting rights. Referring to the order of this Tribunal in dated 30.10.2015 in the case of ITO Vs. M/s.S-1308, Ammapet Primary Agricultural Cooperative Bank Ltd. the learned representative for the assessee submitted that the Tribunal has allowed the identical claim of the assessee. In fact this Tribunal in S-1308, Ammapet Primary Agricultural Cooperative Bank Ltd., placed reliance on the earlier decision in M/s.SL (SPL) 151, Karkudalpatty Primary Agricultural Cooperative Credit Society Ltd. cited supra.

We have considered the rival submissions on either side and also perused the material available on record. The only issue arises for consideration is that the claim of the assessee under Section 80P(2)(a)(i) of the Act. As rightly submitted by the learned department representative, the assessing officer disallowed the claim of the assessee on the ground that the assessee had transaction with the members and non members. The non members are classified as associate members. The CIT(A) by placing reliance on the order of this Tribunal in the case of M/s.SL (SPL) 151, Karkudalpatty Primary Agricultural Cooperative Credit Society Ltd. cited supra allowed the claim of the assessee. This order of this Tribunal was subsequently followed by another Division Bench in M/s.S-1308, Ammapet Primary Agricultural Cooperative Bank Ltd. cited supra. One of us, the Accountant Member is a party to the order dated 30.10.2015. It is not the case of the revenue that the order of this Tribunal in M/s. SL (SPL) 151, Karkudalpatty Primary Agricultural Cooperative Credit Society Ltd. cited supra was stayed by the High Court. This Tribunal is of the considered opinion that mere pendency of the appeal against the order of this Tribunal before the High Court cannot be a reason to take a different view. Therefore, by following the decision of the coordinate bench of this Tribunal in M/s.SL (SPL) 151, Karkudalpatty Primary Agricultural Cooperative Credit Society Ltd. and M/s.S-1308, Ammapet Primary Agricultural Cooperative Bank Ltd. cited supra., this Tribunal do not find any reason to interfere with the order o the lower authority. Accordingly, the same is confirmed.