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2018 (6) TMI 1746 - AT - Income TaxDeduction under section 80P - denial of deduction as assessee carries on the banking business and other business in the name of a cooperative credit society - CIT-A allowed deduction - HELD THAT - There is not dispute that the assessee is a cooperative society of the employees of KEM Hospital and Seth GSM Collage and also registered under the Maharashtra State Cooperative Society Act. The assessee is providing credit facilities to its members only. The Tribunal has already considered the factual as well as legal position and followed the decision from Hon ble jurisdictional High Court in Quepem Urban Co-op. Credit Society Ltd. 2015 (6) TMI 573 - BOMBAY HIGH COURT 2015 377 ITR 272 (Bom) and various other decisions therefore following the aforesaid order we find no infirmity in the conclusion of the First Appellate Authority resultantly the appeal of the Revenue is dismissed.
Issues:
- Allowance of deduction under section 80P of the Income Tax Act to the assessee society. - Classification of the assessee as a Cooperative Bank. - Eligibility of the assessee for deduction under section 80P(2)(a)(i) of the Act. Analysis: 1. Deduction under section 80P: The Revenue contested the order allowing deduction under section 80P for the assessee society, arguing that the society was engaged in banking business. The Revenue relied on section 80P(4)(viia) and the decision in the case of Totgar Co.op. Sales Society Ltd. The Tribunal noted that the assessee is a Cooperative Credit Society providing credit facilities to its members. The Ld. CIT(A) granted the deduction, emphasizing that the society did not meet the criteria to be classified as a Cooperative Bank. The Tribunal upheld this decision based on legal and factual analysis, citing relevant precedents and the absence of contrary decisions. 2. Classification as a Cooperative Bank: The Assessing Officer initially denied the deduction under section 80P(2)(a)(i) by classifying the assessee as a Cooperative Bank. However, the Ld. CIT(A) and the Tribunal disagreed, highlighting that the society lacked a license under the Banking Regulation Act and did not engage in banking business as defined. The Tribunal referenced decisions from the jurisdictional High Court and other tribunals to support the classification of the assessee as a Cooperative Credit Society, not a bank, thus justifying the allowance of the deduction. 3. Eligibility for deduction under section 80P(2)(a)(i): The core issue revolved around whether the assessee was entitled to the deduction under section 80P(2)(a)(i) of the Act. The Assessing Officer treated a portion of the income as Income from Other Sources, leading to the dispute. The Ld. AR of the assessee argued that the society was not a Cooperative Bank and, therefore, eligible for the deduction. The Tribunal concurred with this argument, emphasizing the nature of the society's activities and its compliance with the Maharashtra State Co-operative Societies Act. The decision was supported by relevant legal provisions and precedents, ultimately resulting in the dismissal of the Revenue's appeal. In conclusion, the Tribunal's detailed analysis and consideration of legal provisions, factual circumstances, and precedents led to the dismissal of the Revenue's appeal. The judgment reaffirmed the classification of the assessee as a Cooperative Credit Society, thereby upholding the allowance of the deduction under section 80P of the Income Tax Act.
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