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TMI Blog2019 (5) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... primary agricultural credit society under the Kerala Co-operative Societies Act, 1969. For the assessment year 2015-2016, the assessee's claim of deduction u/s 80P(2) of the I.T.Act was denied by the Assessing Officer. The Assessing Officer held that the assessee was doing the business of banking and loans disbursed by the assessee was for non-agricultural purpose. For these reasons the claim of deduction was denied. 4. Aggrieved by the denial of deduction u/s 80P(2) of the I.T.Act, the assessee preferred appeal to the first appellate authority. The learned CIT(A) allowed the claim of the assessee by following the judgment of the Hon'ble jurisdictional High Court in the case of Chirakkal Service Co-operative Bank Ltd.(384 ITR 490). The CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding. . The details of loans outstanding at the end of the year as per the Audit report of Registrar is as follows: 2015-2016 Particulars loans outstanding at the end of the year % Short Telm Agricultural Loan(KCC OlD) , Mid Term Agricultural Loan(MMT) Rs. 14,37,94,719/- 44.45% Ordinary Loans/ Gold Loans etc. Rs. 17,96,66,722/- 55.55% Grand Total Rs. 32,34,61,441/- This was clearly considered by the first appellate authority while deciding the case in favour of the assessee. In view of the above matter this Bench of the Tribunal may please uphold the order of the CIT (appeals) Thrissur and dismiss the second appeal of the department. ' 6. We have heard the rival submissions and perused the material on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the class of the society as per the certificate of registration issued under the Central or State Co-operative Societies Act and the Rules made thereunder. On such a claim for deduction under Section 80P of the IT Act, the Assessing Officer has to conduct an enquiry into the factual situation as to the activities of the assessee society and arrive at a conclusion whether benefits can be extended or not in the light of the provisions under sub-section (4) of Section 80P. 33. In Chirakkal [384 ITR 490] the Division Bench held that the appellant societies having been classified as Primary Agricultural Credit Societies by the competent authority under the KCS Act, it has necessarily to be held that the principal object of such societies is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 80P of the IT Act. In view of the law laid down by the Apex Court in Citizen Co-operative Society [397 ITR 1] the law laid down by the Division Bench Perinthalmanna [363 ITR 268] has to be affirmed and we do so. 35. In view of the law laid down by the Apex Court in Ace Multi Axes Systems' case (supra), since each assessment year is a separate unit, the intention of the legislature is in no manner defeated by not allowing deduction under Section 80P of the IT Act, by reason of sub-section (4) thereof, if the assessee society ceases to be the specified class of societies for which the deduction is provided, even if it was eligible in the initial years." 6.1 In view of the dictum laid down by the Full Bench of the Hon'ble High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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