AI Drafter 
TaxTMI 
TaxTMI 
2015 (4) TMI 1135
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....ee for the assessment years 2006-07 to 2008-09 and 2010-11 in support of the orders of Commissioner of Income Tax (Appeals), Salem. The only issue in all the appeals of the Revenue is that Commissioner of Income Tax (Appeals) is not justified in allowing deduction under section 80P(2(a)(i) of the Act claimed by the assessee. 2. At the time of hearing, counsel for the assessee submits that the issue in these appeals is squarely covered by the decision of the co-ordinate Bench of this Tribunal in the case of ITO Vs. M/s.Veerakeralam Primary Agricultural Co-operative Credit Society in ITA No.197/Mds/2013 dated 11.02.2014 and in the case of The Salem Agricultural Producers Co-operative Marketing Society Ltd. Vs. ITO in ITA Nos.730 to 732/Mds....
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....t, 1961. The case of the assessee is that the bye-laws of the society allow the assessee to lend/advance loans to its members on agricultural produce loan and on the pledge of gold jewels and silver articles, earned interest income only as per the objects and submitted before the lower authorities that the claim of the assessee has to be considered under section 80P(2)(a)(i) of the Act. 3. This issue has been considered by Income Tax Appellate Tribunal, Chennai 'B' Bench in the cases of SL(SPL)151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd and S 1382, Mullukuruchi Primary Agricultural Cooperative Credit Society Ltd in I.T.A. Nos. 292 & 293/Mds/2014 vide common order dated 17.03.2014 and also the decision of....
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.... perused the orders of the authorities below as well as the decisions on which the ld.AR has placed reliance. The assessee is an agricultural co-operative credit society registered under the Tamil Nadu Co-operative Societies Act, 1961. The assessee-society was established in the year 1968 and the members of the society are agriculturists. The primary activity of the society is accepting deposits from its members and advancing loans to its members. The assessee has been enjoying the benefit of deduction u/s.80P till the amendment was brought in by the Finance Act, 2006 vide which sub-clause 4 was inserted in section 80P. After the amendment, the benefit of 80P was denied to the cooperative banks. The sub-section 4 of section 80P is reproduce....
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....ngalore Bench of the Tribunal in the case of ACIT Vs. M/s.Balgalore Commercial Transport Credit Co-operative Society Ltd., (supra). After comparative analysis of the 'co-operative banks' and 'co-operative societies' on various parameters, the Tribunal came to the conclusion that the activities of both the organizations and the compliances to be made under various Acts for both the organizations are varied. The sub-section 4 to section 80P is applicable only to co-operative banks and not to credit co-operative societies. The decision of the Bangal ore Bench of the Tribunal in the case of ACIT Vs. M/s.Balgalore Commercial Transport Credit Co-operative Society Ltd., (supra) has subsequently been followed by the co-ordinate bench of the Tribuna....
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.... why then Legislature specified primary agricultural credit societies along with primary cooperative agricultural and rural development banks for exclusion from such exclusion and in other words, continued to hold such entity as eligible for deduction. However, the issue has been considerably simplified by virtue of CBDT circular No.133 of 2007 dated 9.5.2007. Circular provides as under:- "Subject: Clarification regarding admissibly of deduction under section 80P of the Income-Tax Act, 1961. 1. Please refer to your letter No. DCUS/30688/2007, dated 28.03.2007 addressed to Chairman, Central Board of Direct Taxes, on the above given subject. 2. In this regard, I have been directed to state that subsection( 4) of sec....
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....present case, respondent assessee is admittedly not a credit cooperative bank but a credit co-operative society. Exclusion clause of sub-section(4) of section 80P, therefore, would not apply. In the result, Tax Appeals are dismissed". The Revenue has tried to establish that the assessee although a credit co-operative society is carrying banking business and is thus not eligible. In our opinion, the assessee is not a co-operative bank. The activities in the nature of accepting deposits, advancing loans etc., carried on by the assessee are confined to its members only and that too in a particular geographical area. The activities of the assessee are not regulated by the RBI or the provisions of the Banking Regulation Act. Thus, in vi....