ITAT Cochin Judgments — February 2018

The Tribunal held that the issue of corpus donations needs to be re-examined by the Assessing Officer with the newly filed donor certificates. However, the claim for contribution to other institutions was rejected due to the absence of their Section 12A registration certificates.

The Tribunal noted that while accounting standards require MTM losses to be recognized, the Income Tax Act allows deductions for crystallized liabilities. The issue was remitted to the Assessing Officer for re-examination.

The Tribunal noted that while accounting standards require MTM losses to be recognized, the Income Tax Act allows deductions for crystallized liabilities. The issue was remitted to the Assessing Officer for re-examination.

The Tribunal held that while the assessee's explanation for cash deposits was not fully substantiated, credit should be given for VDIS declarations and cash withdrawals. Therefore, a portion of the addition was deleted.

The Tribunal held that a primary agricultural credit society registered under the Kerala Co-operative Societies Act is entitled to the benefit of deduction under Section 80P(2). This decision was based on the jurisdictional High Court's ruling in a similar case.

The Tribunal held that the assessee, being registered as a primary agricultural credit society under the Kerala Co-operative Societies Act, is entitled to the deduction under Section 80P(2). The Supreme Court judgment relied upon by the Revenue was deemed not applicable.

The Tribunal noted that the appeal had already been heard and disposed of previously, and the assessee was not interested in pursuing it further. Therefore, the grounds of appeal were dismissed as not pressed.

The Tribunal held that the deduction under Section 10B is to be computed on a standalone basis, before setting off carried forward business losses and unabsorbed depreciation. This followed a Supreme Court judgment which reversed the Kerala High Court's decision.

The Tribunal dismissed the appeal in limine due to the assessee's non-appearance and lack of interest in pursuing the appeal. However, the appeal could be recalled if the assessee provides a satisfactory explanation for their absence.

The Tribunal held that grants received for setting up business or completing projects are capital in nature and not taxable as revenue. The unspent balance of such grants cannot be brought to tax as revenue receipts.

The Tribunal dismissed the appeal filed by the Revenue. The Tribunal noted that an identical issue was considered in its own previous decision in the case of Edanad-Kannur Service Co-operative Bank Ltd. and others, which followed the judgment of the Hon'ble High Court of Kerala in Chirakkal Service Co-operative Bank Ltd. The Tribunal held that the Supreme Court's judgment in The Citizens Co-Operative Society Limited was not applicable to the facts of the present case. The reasoning was that the jurisdictional High Court in Chirakkal Service Co-operative Bank Ltd. had categorically held that when a primary agricultural credit society is registered as such under the Kerala Co-operative Societies Act, 1969, it is entitled to the benefit of deduction under Section 80P(2). The Tribunal further elaborated that the definition of 'member' under the relevant State Co-operative Societies Act should be considered, and that Section 3 of the Banking Regulation Act, 1949, exempts Primary Agricultural Credit Societies from its provisions. The Reserve Bank of India also treats such societies as Primary Agricultural Credit Societies. Therefore, the Assessing Officer was not competent to decide whether the assessee was a 'Primary Agricultural Credit Society' or a 'Co-operative Bank' under the Banking Regulation Act. The Tribunal upheld the CIT(A)'s order allowing the deduction under Section 80P(2).

The Tribunal dismissed the appeals filed by the Revenue. The Tribunal noted that an identical issue was considered in its own previous decision in the case of Edanad-Kannur Service Co-operative Bank Ltd. and others, dated 10/01/2018. In that decision, the Tribunal followed the judgment of the Hon'ble High Court of Kerala in Chirakkal Service Co-operative Bank Ltd. and held that the Supreme Court's judgment in The Citizens Co-Operative Society Limited was not applicable to the facts of that case. The Tribunal reiterated the reasoning from its previous order, emphasizing that when a primary agricultural credit society is registered as such under the Kerala Co-operative Societies Act, 1969, it is entitled to the benefit of deduction under Section 80P(2) of the Income-tax Act. The Tribunal further held that the Assessing Officer was not competent to decide whether the assessee was a Primary Agricultural Credit Society or a Co-operative Bank within the meaning of the Banking Regulation Act, especially in view of the explanation to Section 80P(4) and the Reserve Bank of India's classification of such societies. Therefore, the Tribunal upheld the orders of the CIT(A) which had correctly allowed the claim of deduction.

The Tribunal dismissed the appeals filed by the Revenue. The Tribunal noted that an identical issue was considered in its own previous decision in the case of Edanad-Kannur Service Co-operative Bank Ltd. and others, dated 10/01/2018. In that decision, the Tribunal followed the judgment of the Hon'ble High Court of Kerala in Chirakkal Service Co-operative Bank Ltd. and held that the Supreme Court's judgment in The Citizens Co-Operative Society Limited was not applicable to the facts of that case. The Tribunal reiterated the reasoning from its previous order, emphasizing that when a primary agricultural credit society is registered as such under the Kerala Co-operative Societies Act, 1969, it is entitled to the benefit of deduction under Section 80P(2) of the Income-tax Act. The Tribunal further held that the Assessing Officer was not competent to decide whether the assessee was a Primary Agricultural Credit Society or a Co-operative Bank within the meaning of the Banking Regulation Act, especially in view of the explanation to Section 80P(4) and the Reserve Bank of India's classification of such societies. Therefore, the Tribunal upheld the orders of the CIT(A) which had correctly allowed the claim of deduction.

The Tribunal held that grants received for setting up business or completing projects are capital in nature and not taxable as revenue. The unspent balance of such grants cannot be brought to tax as revenue receipts.