Tribunal affirms deduction for agricultural credit societies under IT Act

The Tribunal upheld the CIT(A) orders allowing deduction u/s 80P(2) for the assessment year 2015-16, based on the High Court judgment that primary agricultural credit societies are entitled to exemption under section 80P of the IT Act. The Tribunal also affirmed the eligibility of interest income from other Banks and Treasury for deduction u/s 80P(2)(d), dismissing the Revenue's appeals. The Cross Objection filed by the assessee was rendered infructuous. Both Revenue's appeals and the assessee's Cross objection were dismissed, confirming the CIT(A) decisions.

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Issues:
- Appeal against orders of CIT(A) related to deduction u/s 80P(2) of the Income-tax Act, 1961.
- Eligibility of interest income from other Banks and Treasury for deduction u/s 80P(2)(d) of the Act.

Analysis:
1. Deduction u/s 80P(2):
- The appeals by the Revenue challenged CIT(A) orders regarding deduction u/s 80P(2) for the assessment year 2015-16.
- The Assessing Officer disallowed the deduction claimed by the assessee stating that the principal business did not align with the objectives of a primary agricultural credit society.
- CIT(A) allowed the deduction based on the judgment of the Jurisdictional High Court in a similar case.
- The Jurisdictional High Court held that societies classified as primary agricultural credit societies under the State law are entitled to the exemption under section 80P of the IT Act.
- The Tribunal found the issue covered in favor of the assessee by the High Court judgment and upheld the CIT(A) order, dismissing the Revenue's appeal.

2. Interest Income Eligibility:
- The Revenue disputed the eligibility of interest income from other Banks and Treasury for deduction u/s 80P(2)(d) of the Act.
- CIT(A) ruled in favor of the assessee, citing a Tribunal decision that interest income from investments in Treasury and Banks is part of banking activity and qualifies for deduction u/s 80P(2)(a)(i).
- The Tribunal, considering the precedent, upheld the CIT(A) decision, dismissing the Revenue's appeal on this ground as well.

3. Cross Objection:
- The Cross Objection filed by the assessee became infructuous due to the dismissal of the Revenue's appeals.

4. Final Decision:
- Both the appeals of the Revenue and the Cross objection by the assessee were dismissed, affirming the orders of the CIT(A) regarding deduction u/s 80P(2) and eligibility of interest income for deduction u/s 80P(2)(d).

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