2014 (9) TMI 1280 - AT - Income Tax

Tribunal Upholds Co-op Credit Society Deductions for 2010-11; Reverses Prior Decision for 2009-10 on Investment Deductions.

The Tribunal dismissed the revenue's appeal for A.Y. 2010-11, upholding the Co-operative Credit Society's claim for deduction under section 80P(2)(a)(i) ... Deduction u/s 80P(2)(a)(i) - assessee, is a Co-operative Credit Society in terms of Banking Regulation Act, 1949, and is engaged in providing credit facilities to its members - AO has treated the assessee society as a Agricultural Rural Development Bank and after applying Explanation appended to Section 80P(4) has disallowed deduction claimed, as exempt u/s 80P(2)(a)(i) - HELD THAT:- D.R. has relied on the order of Jaipur Bench rendered in the case of Kekri Sahakari Bhumi Vikas Bank Ltd. Vs ITO [2012 (6) TMI 407 - ITAT JAIPUR] a copy of which has been filed on record. We have carefully treaded through this order. In that case the facts indicated that it was involved in lending activities and, therefore, the matter was restored back to the file of ld. CIT(A). Therefore, no specific ratio decidendi is revealed from this order. To the contrary, apart from assessee’s own case orders in other similar cases passed by this very Bench are available. In the case of Jodhpur Sahakari Bhoomi Vikas Bank Ltd., Mandore Road, Jodhpur Vs ITO [2014 (8) TMI 1238 - ITAT JODHPUR] the view favourable to the assessee has been taken. In assessee’s own case for other years the A.O. himself has allowed similar claim. Accordingly, we allow assessee’s claim, by following our earlier orders and in the consistency of finding by the A.O. and dismiss revenue’s appeal. Issues Involved:- Disallowance of deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 for A.Y. 2010-11.- Denial of claim of deduction under section 80P(2)(d) of the Income Tax Act for A.Y. 2009-10.Analysis:Issue 1: Disallowance of deduction under section 80P(2)(a)(i) for A.Y. 2010-11:The case involved an appeal by the revenue against the order of the ld. CIT(A) for A.Y. 2010-11. The assessee, a Co-operative Credit Society, claimed deduction under section 80P(2)(a)(i) of the Act, declaring NIL income. The Assessing Officer (A.O.) treated the society as an Agricultural Rural Development Bank and disallowed the deduction claimed. The ld. CIT(A) deleted the addition, citing consistency with previous orders and decisions of other benches. The revenue appealed the decision, arguing that the deduction should not have been allowed. The Tribunal, after considering the submissions, upheld the assessee's claim based on the principle of consistency and previous favorable orders, dismissing the revenue's appeal.Issue 2: Denial of claim of deduction under section 80P(2)(d) for A.Y. 2009-10:In A.Y. 2009-10, the assessee raised grounds regarding the denial of deduction under section 80P(2)(d) of the Act. The issues raised included whether a Co-operative Society engaged in banking activities could invest surplus funds in other societies for earning interest/dividends and claim deduction under section 80P(2)(d). The Tribunal examined the submissions and referred to previous orders, including a case involving a similar society. The Tribunal observed that the A.O. had allowed similar claims in the past for the assessee and other cases. Consequently, the Tribunal allowed the assessee's appeal for A.Y. 2009-10, reversing the decision of the ld. CIT(A) based on the consistency of findings and earlier orders.In conclusion, the Tribunal dismissed the revenue's appeal for A.Y. 2010-11 and allowed the assessee's appeal for A.Y. 2009-10, emphasizing consistency with previous decisions and findings. The judgment provided clarity on the application of deductions under section 80P of the Income Tax Act, 1961 for Co-operative Credit Societies engaged in various activities, ensuring fair treatment based on established principles and precedents.