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2017 (8) TMI 842 - AT - Income Tax


Issues:
- Whether the assessee is eligible for claiming deduction u/s. 80P of the Income Tax Act when the principal objective of providing agricultural credits to members is not fulfilled?
- Whether the decision of the CIT(A) is against law in view of the Kerala Co-operative Societies Act?
- Whether the reliance placed by the CIT(A) on certain judgments is correct?
- Whether the assessee is entitled to the benefit of deduction u/s. 80P(2) of the Act for the assessment years 2009-10 to 2011-12?
- Whether the order of the CIT(A) in granting the benefit of deduction u/s. 80P(2) of the Act is justified?

Analysis:
1. The appeals by the Revenue and Cross Objections by the assessee were heard together concerning the consolidated order of the CIT(A)-III, Kochi for the assessment years 2009-10 to 2011-12.
2. The Revenue's appeals raised common issues regarding the eligibility of the assessee for deduction u/s. 80P. The Assessing Officer had denied the deduction based on the primary engagement in banking activities, invoking section 80P(4) of the Act.
3. The CIT(A) partially allowed the assessee's appeals, directing the Assessing Officer to grant deduction u/s. 80P(2) for the mentioned assessment years, relying on relevant case law.
4. The Revenue challenged the CIT(A)'s decision, arguing that the benefit of deduction was wrongly granted. The Ld. DR highlighted the negligible percentage of loans sanctioned for agricultural purposes and cited relevant case laws to support the Revenue's position.
5. The Ld. AR supported the CIT(A)'s decision on granting deduction u/s. 80P(2) of the Act.
6. The Tribunal referred to the judgment of the Hon'ble Kerala High Court, which held that a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969, is entitled to deduction u/s. 80P(2).
7. The Tribunal upheld the CIT(A)'s order, emphasizing the classification of the assessee as a Primary Agricultural Credit Society and the High Court's precedent.
8. The Tribunal dismissed the Revenue's appeals and the Cross Objections by the assessee, affirming the grant of deduction u/s. 80P(2) for the assessment years in question.

 

 

 

 

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