TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 922
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....ed on the assessee. The Assessee, stating they are a Primary Agricultural Credit Society, carrying on the business of banking and providing credit facilities to its members, claimed deduction under Section 80P (2) of the Income Tax Act. The assessee society is registered under Tamil Nadu Co-operative Societies Act, primarily engaged in the principle business of providing financial assistance to its members, besides deriving income from its Tractor division and Public Distribution Division. The aforesaid assessee invested its funds in CDCC Bank etc., to comply with the statutory obligations and received interest from such investments, which has been headed under Income from other sources . Therefore, the interest income and dividend income have come under the taxable income under Section 80P (2)(a)(i) & (d) of the Income Tax Act, 1961. The Assessing Officer has observed that the assessee by nomenclature is a Primary Agricultural Co-operative Credit Society and with the insertion of Section 80P (4), all the co-operative banks other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, become ineligible for exemption under Section ....
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....ntire interest and dividend income are deductible under Section 80P(2)(d) also. 3. The Assessing Officer erred in ignoring the facts and circumstances of the case i.e., Primary Agricultural Cooperative Credit Society doing banking as its principal business complying with section 5(cciv) of the Banking Regulation Act, 1949, but based her assessment on the statements made by the Authorised Representative at the time of assessment proceedings. 4. In the aforesaid circumstances, it is earnestly prayed that the deduction u/s 80P may be restored in toto in the assessment and the tax demand raised may be nullified. 4. The appellant has submitted before the Commissioner of Income Tax that Section 80P was amended vide Finance Act, 2006, with effect from 01.04.2007 i.e., from the Assessment year 2008-09 onwards. Sub section (4) was introduced under Section 80P. This subsection denied the deduction to a cooperative bank. Till the amendment of introducing subsection (4) under Section 80P, there was no requirement to analyse and understand the various terms, namely, banking business, agricultural credit society, primary cooperative society, the nature of head of income under which the inco....
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....es of the Tribunal and held that the activities are not regulated by the Reserve Bank of India or by the provisions of the Banking Regulation Act. Therefore, the appeal filed by the Revenue was dismissed by the Tribunal. 7. Aggrieved with the abovesaid orders rendered by the Commissioner of Income Tax as well as the Appellate Tribunal, the revenue has filed the instant Appeals. 8. Learned counsel for the appellant would submit that revenue has filed the instant appeals mainly on the ground that allowing a claim for deduction, on the income arisen through banking business by the assessee society, is contrary to the provisions of law, when the deduction is allowable only for Primary Agricultural Credit Society and Primary Co-operative Agricultural and Rural Development Bank . And that the deduction is not allowable to a Primary Agricultural Credit Society, carrying on the business of banking. The appellant Revenue has raised such substantial questions of law, in the above appeals. 9. Learned counsel for the respondent submitted that they are a Primary Agricultural Co-operative Credit Society, within the meaning of Section 5 of Banking Regulation Act, 1949. Subsection (cciv) of the....
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....tricted by Section 80P (4) of the Income Tax Act ? 12. The assessee society, primarily registered as Veerakeralam Primary Agricultural Co-operative Bank Ltd., under the Tamilnadu Co-operative Societies Act, 1964, subsequently in 1968, has changed its name as Veerakeralam Primary Agricultural Co-operative Credit Society . The assessee claims to be a primary agricultural credit society , engaged primarily in the principle business of providing financial assistance to its members, during the assessment years 2008-2009, 2009-2010 and 2010-2011. The members of the society are agriculturists and are governed by the Tamil Nadu Co-operative Societies Act, 1964. A Co-operative Bank, as defined in Section 5(cci) of the Banking Regulation Act 1949 means a primary co-operative bank. A primary co-operative Bank is a co-operative society other than a primary agricultural credit society. Therefore, a primary agricultural credit society need not be treated as a Primary Co-operative Bank. The terms co-operative bank and primary agricultural credit society for the purpose of subsection (4) of Section 80P Act, shall have the meanings, as assigned to them in part V of the Banking Regulation Act, 194....