2016 (1) TMI 573

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.... co-operative society, without considering insertion of section 80P(4) and sub-caluse (viia) to section 2(24) introduced by Finance Act, 2006 w.e.f 01/04/2007. 2. During hearing of this appeal, at the outset, the ld. counsel for the assessee, Shri Nishit Gandhi, contended that the impugned issue is covered by the decision from Hon'ble Gujarat High Court in the case of CIT vs Jafari Momin Vikas Co-op Credit Society Ltd. (Tax Appeal No.442, 443 and 863 of 2013) order dated 15/01/2014 and also the decision of the Tribunal in ITO vs M/s Bharat Petroleum Employees Co-op Credit Society Ltd. (ITA No.6905/Mum/2013) order dated 28/04/2015. This factual matrix was no consented to be correct by the ld. DR, Shri Randhir Gupta. 2.1. We have considered....

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.... by the employees of Bharat Petroleum Corporation Ltd. and its main activity is providing credit facilities to its members only, who happen to be the employees of Bharat Petroleum Corporation Ltd. The society is giving loans to its members and also accepting deposits from its members. In the return of income filed for A.Y. 2010-11, it declared a gross total income of Rs. 80,98,490/- which was claimed as exempt in terms of Section 80P(2)(a)(i) of the Income Tax Act, 1961. The A.O. denied the claim of the assessee for exemption under Section 80P(2)(a)(i) of the Act on the basis of the provisions of Section 80P(4) of the Act, which was inserted by Finance Act 2006 w.e.f. April, 1, 2007. The A.O. was of the opinion that after the insertion of s....

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....n.com 127(Pune) (2012) (ii) ITO v/s Jain Nagri patsanstha Ltd ITAT Pune Bench (2010) (iii) DCIT v/s Jayalakshmi Mahila Vivivdodeshagala Souharda Sahakari Ltd. 137 ITD 163(Panji) (2012) (iv) Sri Vasavi Multipurpose vs CIT ITAT Bangalore bench order dated 10,05.2015. 5. Accordingly, he directed the A.O. to allow deduction to the assessee under Section 80(P)(2)(a)(i) of the Act except to the extent of interest income earned by the assesse from SBI, Patiala. Against the aforesaid decision of the ld. CIT(A), Revenue is in appeal before us. 6. Before us the ld. Representative of the assessee, at the outset, pointed out that the conclusion drawn by the ld. CIT(A) is in accordance with judgment of Hon'ble Gujarat High Court in the ca....

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....er : "Subject: Clarification regarding admissibility of deduction under section BOP of the Income-tax Act, 1961. 1. Please refer to your letter No. DCUS/30688/2007, dated March 28, 2007, addressed to the Chairman, Central Board of Direct Taxes, on the above given subject. 2. In this regard, I have been directed to state that sub-section(4) of section 80P provides that deduction under the said section shall not be allowable to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. For the purpose of the said sub-section, cooperative bank shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949. 3. In Part V of the Banking R....

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....ava Pattina Sahakari Sangha Niyamitha in Income Tax Appeal No. 5006/2013 dated 5th February, 2014 also considered a similar issue. The following discussion in the judgment of Hon'ble Karnataka High Court is relevant:- "Section 80P of the Act deals with the deduction of income of a society. In the case of any assessee being a Co-operative society, the whole of the amounts of profits and gains of business attributable to any of other activities referred to sub-section (2) of Section 80P shall be deducted in computing the total income of the assessee. In other words, the said income is not taxable. It is a benefit given to the Cooperative society. Section 80P(4) was introduced by Finance Act, 2006 with effect from 01.04.2007 excluding the s....

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....he assessee is not a Co- operative bank carrying on exclusively banking business and as it does not possess a licence from Reserve Bank of India to carry on business, it is not a Co-operative bank. It is a Co-operative society which also carries on the business of lending money to its members which is covered under Section 80P(2)(a)(i) i.e. carrying on the business of banking for providing credit facilities to its members. The object of the aforesaid amendment is not to exclude the benefit extended under Section 80P(1) to such society. 8. Following the aforesaid judgments of the Hon'ble Gujarat High Court and Hon'ble Karnataka High Court and in the absence of any contrary decision brought to our notice by the ld. D.R., the impugned decis....