2015 (10) TMI 593 - AT - Income Tax

Eligibility of deduction u/s. 80P - Held that - Revenue has not placed any material on record to demonstrate that Assessee is a Co-Op. Bank and is not a Credit Co-op. Society nor has placed any contrary binding decision in its support. Assessee is eligible for deduction u/s. 80P - Decided in favour of assessee.

Summary

Issues:
Allowability of deduction under section 80P of the Income Tax Act for a Co-operative Society engaged in providing credit facilities to its members.

Analysis:
The appeal was filed against the order of the CIT(A) confirming the denial of deduction under section 80P for the Assessee, who is a Co-operative Society. The Assessing Officer (AO) held that since the Assessee was carrying out banking business, it was not eligible for the deduction under section 80P(2) due to an amendment made to sub-section 4 in Section 80P. The AO concluded that the Assessee fell under the definition of a Co-operative Bank and thus was not eligible for the deduction. The CIT(A) upheld the AO's decision, stating that the Assessee indeed qualified as a Co-operative Bank and therefore, section 80P(4) was applicable, justifying the denial of the deduction.

In the appeal before the ITAT, the Assessee argued that it was a Co-operative Credit Society and not a bank, thus challenging the denial of deduction under section 80P. The Assessee relied on a decision of the Hon'ble Gujarat High Court in a similar case to support its claim for the deduction. The ITAT observed that the issue revolved around whether the Assessee was a Co-operative Bank or a Co-operative Society. The ITAT noted that the Revenue failed to provide evidence demonstrating that the Assessee was a bank and not a society. Referring to a previous decision of a Co-ordinate Bench, the ITAT concluded that the Assessee was eligible for the deduction under section 80P. The ITAT held that the Assessee, being a credit Co-operative Society and not a bank, was entitled to the deduction under section 80P, in line with the decision of the Hon'ble Gujarat High Court. As a result, the ITAT allowed the Assessee's appeal, directing the allowance of the deduction under section 80P.

In summary, the ITAT ruled in favor of the Assessee, allowing the appeal and granting the deduction under section 80P, as the Assessee was determined to be a Co-operative Society and not a Co-operative Bank, in accordance with the decision of the Hon'ble Gujarat High Court and the absence of evidence presented by the Revenue to the contrary.