9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 382 - AT - Income TaxDisallowance u/s 80P(2)(a)(i) - assessee is an AOP - whether assessee who is a co-operative credit society is entitled for deduction u/s 80P(2)(a)(i) or the assessee is a co-operative bank which is hit by provisions of Section 80P(4) ? - HELD THAT - Assessee is co-operative credit society and is only dealing with its members in providing credit facilities on which interest is charged and the assessee is also accepting deposits from its members on which interest is paid by the assessee. We have observed that the assessee is not dealing with outside public and had confined its dealings with members only as per the facts emerging from records and as stated by learned counsel for the assessee before the Bench. We have observed that in assesse s own case for AY 2012-13 and 2013-14, the tribunal has taken a consistent view that the assessee is entitled for deduction u/s. 80P(2)(a)(i) - As decided in assessee's own case 2016 (11) TMI 1630 - ITAT MUMBAI relying on decision of Hon ble jurisdictional High Court in Quepem Urban Co-operative Credit Society Ltd 2015 (6) TMI 573 - BOMBAY HIGH COURT and further the decision of Kalpadi Cooperative Township Ltd 2016 (9) TMI 952 - MADRAS HIGH COURT is squarely applicable upon the facts of the present case and the assessee was entitled for the deductions claimed u/s 80P(2)((a) (i). Also see assessee's own case for AY 2013-14 2018 (10) TMI 1690 - ITAT MUMBAI - Decided in favour of assessee.
Issues Involved:
1. Entitlement of the assessee to deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961. 2. Classification of the assessee as a co-operative credit society or a co-operative bank under Section 80P(4) of the Income-tax Act, 1961. Detailed Analysis: Issue 1: Entitlement to Deduction under Section 80P(2)(a)(i) The primary issue in this appeal is whether the assessee, a co-operative credit society, is entitled to deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961. The Assessing Officer (AO) disallowed the deduction of ?71,30,500 claimed by the assessee under this section, invoking Section 80P(4), which excludes co-operative banks from such benefits. The AO's decision was based on the premise that the assessee's activities of accepting deposits and providing credit facilities to its members are akin to the primary activities of a bank. However, the Commissioner of Income Tax (Appeals) [CIT(A)] reversed the AO's decision, allowing the deduction by following the tribunal's decisions in the assessee's own cases for assessment years (AY) 2012-13 and 2013-14. The CIT(A) concluded that the assessee is a primary co-operative credit society and not a co-operative bank, as its activities were limited to its members only, thus qualifying for the deduction under Section 80P(2)(a)(i). Issue 2: Classification as Co-operative Credit Society or Co-operative Bank The AO classified the assessee as a co-operative bank based on the definition provided in the Banking Regulation Act, 1949, arguing that the assessee's activities of accepting deposits and providing credit facilities are similar to those of a bank. The AO also noted that the department had not accepted the Bombay High Court's decision in the case of Quepem Urban Co-op Credit Societies Ltd and had filed an SLP before the Supreme Court. The CIT(A) and the tribunal, however, disagreed with the AO's classification. They relied on the Bombay High Court's decision in Quepem Urban Co-op Credit Societies Ltd, which held that a co-operative society engaged in providing credit facilities to its members is not a co-operative bank if it does not accept deposits from the public and its bye-laws do not prohibit the admission of other co-operative societies as members. The tribunal observed that the assessee's activities were confined to its members and did not involve the general public, thus not meeting the criteria of a co-operative bank under Section 80P(4). Tribunal's Decision: The tribunal upheld the CIT(A)'s order, granting the deduction under Section 80P(2)(a)(i) to the assessee. It emphasized that the assessee's activities were limited to its members, making it a co-operative credit society rather than a co-operative bank. The tribunal also noted that the issue had been consistently decided in favor of the assessee in previous years (AY 2012-13 and 2013-14) and that there was no change in the factual matrix for the year under consideration (AY 2014-15). Conclusion: The tribunal dismissed the Revenue's appeal, confirming that the assessee is entitled to the deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961, as it is a co-operative credit society and not a co-operative bank. The tribunal's decision aligns with the precedent set by the Bombay High Court in the case of Quepem Urban Co-op Credit Societies Ltd and the consistent rulings in the assessee's own cases for previous assessment years.
|
