2018 (8) TMI 2059 - AT - Income Tax

Appellate Tribunal Upholds Deduction for Primary Agricultural Credit Society under Income Tax Act

The Appellate Tribunal, COCHIN, dismissed the Revenue's appeal and affirmed the entitlement of the primary agricultural credit society to deduction under ... Deduction u/s. 80P(2)(a)(i) - assessee is primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969 - assessee is primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969 - HELD THAT:- Admittedly, the assessee is primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969. The Hon'ble High Court of Kerala in the case of Chirakkal Service Co-op Bank Ltd.[2016 (4) TMI 826 - KERALA HIGH COURT] had held that a primary agricultural credit society, registered under the Kerala Cooperative Societies Act, 1969 is entitled to the benefit of deduction u/s. 80P(2) - Decided in favour of assessee. Issues Involved:- Whether the assessee is entitled to deduction u/s. 80P(2)(a)(i) of the I.T.Act.Analysis:1. The main issue in this appeal before the Appellate Tribunal ITAT COCHIN was whether the assessee, a primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969, is entitled to deduction under section 80P(2)(a)(i) of the Income Tax Act for the assessment year 2013-2014.2. The Assessing Officer had denied the deduction u/s. 80P of the Act, stating that the assessee was primarily engaged in the business of banking and hence not eligible for the deduction. However, the CIT(A) allowed the deduction relying on the judgment of the Jurisdictional High Court in a similar case.3. The Appellate Tribunal considered the judgment of the Hon'ble High Court of Kerala in the case of Chirakkal Service Co-operative Bank Ltd., which held that primary agricultural credit societies registered under the Kerala Cooperative Societies Act, 1969 are entitled to the benefit of deduction u/s. 80P(2) of the I.T. Act.4. The High Court emphasized 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 concurred with this interpretation and held that the assessee-society falls under this category, thus allowing the benefit of deduction u/s. 80P of the Act.5. Consequently, the Appellate Tribunal dismissed the appeal filed by the Revenue, affirming the entitlement of the assessee to the deduction u/s. 80P of the Income Tax Act for the relevant assessment year.This detailed analysis highlights the key legal arguments, interpretations of relevant provisions, and the application of precedent in determining the entitlement to the deduction under section 80P of the Income Tax Act for the primary agricultural credit society in question.