THE HOOSEINI CO OPERATIVE CREDIT SOCIETY LTD,MUMBAI vs. ITO 15(1)(4), MUMBAI

The assessee is a Co-operative Society and Registered under the Co- operative Societies Act, 1960. The object of the Society is to enable its members to sale their earning and to obtain loan from the Society.

The issue contested by the revenue relates to the claim for deduction u/s 80P of the Act. The assessee claimed deduction u/s 80P((2)(a)(i) of the Act. The AO took the view that the assessee falls under the category of “Co-operative Bank” and accordingly by following the provisions of section 80P(4) rejected the claim for deduction u/s 80P of the Act. The ld. CIT(A), however, allowed the claim of the assessee and hence the revenue has filed this appeal before us.

We have heard the parties on this issue and perused the record. The ld. AR placed reliance on the decision of the Hon’ble Bombay High Court in the case of Quepem Urban Co-operative Credit Society Ltd V/s ACIT reported in (2015) 377 ITR 272 (Bom) and submitted that a Co- operative Society transacting mainly with its members cannot be treated as Co-operative Bank. The ld. AR further submitted that in the case before the Hon’ble Bombay High Court, the assessee therein was providing credit mainly to its members and transaction with non-members was insignificant. Despite this fact, the Hon’ble Bombay High Court has held that the assessee therein could not be treated as Co-operative Bank and accordingly allowed the deduction u/s 80P of the Act to the said assessee. The ld. AR further submitted that the assessee before us was providing a credit only to its members and hence, the case of the assessee stands in stronger footing. The ld. AR further placed reliance on the decision rendered by the SMC Bench of Mumbai Tribunal, in M/s Jaoli Taluka Sahakari Patpedhi Maryadit V/s ITO in (AY-2010- 11) dated 10.8.2015, wherein the Tribunal, by following the decision of Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda