2014 (5) TMI 813

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.... up together for adjudication. 2. The assessee is a primary agriculture co-operative society registered under the Tamil Nadu Co-operative Societies Act, 1983 (herein after referred to as 'the Societies Act'). The society for the AYs under consideration in its return of income claimed deduction u/s.80P(2) of the Income Tax Act, 1961 (herein after referred to as 'the Act'). The Assessing Officer in scrutiny assessment proceedings held that although the assessee is registered as primary agriculture society but the assessee is engaged in the activities akin to commercial banking and has earned income at par with other commercial banks. The Assessing Officer held that the assessee is not eligible to claim deduction u/s.80P of the Act. Aggrieved....

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....bers. Both Class-A and Class-B Members are shareholders of the society. Section 2(16) of the Tamil Nadu Cooperative Societies Act, 1983 defines 'Member' which includes Associate Member. The ld.AR further submitted that the case of the assessee is squarely covered by the decision of the coordinate bench of the Tribunal in ITA No.292/Mds/2014 in the case of M/s.SL(SPL) 151, Karkudalpatty Primary Agricultural Cooperative Credit Society Ltd., Vs. ITO decided on 17-03-2014. In the said case, the Tribunal has held that for availing deduction u/s.80P, classification of Members in 'A' and 'B' is irrelevant. The ld.AR also placed on record a copy of the order of the Tribunal in ITA No.197/Mds/2013 in the case of ITO Vs. M/s.Veerakeralam Primary Agri....

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....rm 'Member' includes 'Associate Member'. The reference of class 'B' Members by CIT(Appeals) is with respect to Associate Members. The CIT(Appeals) has denied deduction to the assessee only for the reason, that credit facilities have been extended to a particular class of Members, who are not normal Members of the society. We do not agree with the CIT(Appeals) on the issue. The coordinate bench of Tribunal in the case of M/s.SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd., Vs. ITO (supra) has dealt with this issue. The findings of the Tribunal are as under: "7. We have heard both parties and gone through the case file. As stated in the preceding paragraphs, the CIT(A) has proceeded to enhance the assessment(....