9911796707
TMI Blog2012 (11) TMI 1279X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act, 1961 amounting to ₹ 16,55,500/-. 3. The assessee is a Primary Agriculture Co-op Society Ltd. (PACS) registered under the Co-op Society Act, Haryana. It is engaged in carrying out banking activities like borrowing, raising or taking up of money and lending or advancing of money for the purpose of agriculture, sale and purchase of seeds and urea etc. The assessee society is financed by District Central Co-op Bank to provide further credit facilities in its area on behalf of State Govt. to facilitate the farmers of the villages for their credit requirement as well as to fulfill seed, urea etc. requirement. The assessee society received loans from Co-op Bank and advance the same to the farmers/ villagers situated in rur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a)(iv). It was further submitted that the assessee is accepting some deposits for short term basis from non members also which is only in the nature of banking activity; that it is not possible for the assessee to bifurcate the expenditure incurred towards deposits received from members and non members; that no credit facility or supply of seeds etc. was provided to any non members. 3.3 The Assessing Officer was not satisfied. He held that exemption u/s. 80P(2)(a)(i) and u/s. 80P(2)(a)(iv) is not available to the assessee. 3.4 Assessing Officer observed that acceptance of deposits from non members tantamount to providing banking facilities to persons other than members; that if a society is accepting deposits from non members, that mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the submissions made by the Authorised Representative. It is not in dispute that the credit facilities and supply of seeds, urea etc. were given only to the members of the appellant society. Only with regard to the deposits, the appellant accepted from non-members also. Acceptance of deposits from non members does not in any way affect the revenue generated by the appellant in providing credit facilities and supply of seeds, urea etc. to the members. Further, merely because the appellant is unable to bifurcate the expenditure for the deposits from the members and non members, deduction u/s. 80P(2)(a)(i) and u/s. 80O(2)(a)(iv) cannot be disallowed. The ratio of case laws relied upon by the Assessing Officer are distinguishable on facts. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on claimed u/s. 80P can be restricted to that extent. Assessing Officer has further held that acceptance of deposits from non members tantamount to providing banking facilities to persons other than members. We find that the above is not acceptable proposition. It is undisputed that the credit facilities and supply of seeds, urea is only given to the members of society. Only with regard to the deposits, the assessee accepted from non members also. Acceptance of deposits from non-members does not in any way affect the revenue generated by the assessee in providing credit facilities and supply of seeds, area etc. to the members. We agree with the finding of the Ld. Commissioner of Income Tax (A) that merely because the assessee was unable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove provisions indicates that in the gross total income of a co-operative society, if any, income referred to in sub-section (2) is included then there shall be a deduction of such income if other conditions are fulfilled by the assessee society. The case of the assessee falls within the category (i) and (iv) i.e. assessee society is carrying on the business of banking and providing credit facilities to its members, to purchase agricultural implements seeds etc. To this extent, there is no dispute on facts. The case of the Assessing Officer is that in order to fulfill these objects, assessee gets the money in the shape of deposits from other co-operative banks who are not its members, therefore, it is not entitled for exemption. In assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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