TaxTMI 
TaxTMI 
2016 (8) TMI 1125
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....:- The Assessee is a co-operative society engaged in marketing the agricultural produces grown by its members and for the assessment years 2007-08 and 2009-10, admitted 'Nil' returns of income after claiming deduction u/s 80P (2) (a) (iii) of the IT Act, 1961. Although the assessee stated that bye-laws of the society allows the assessee to lend monies on agricultural produce loan and on pledge of gold and silver articles, the Assessing Officer disallowed the claims of the assessee, challenged in both the appeals, on the ground that the sum of Rs. 17,61,080/- and Rs. 62,78,650/- respectively, represents interest income and not an income derived by marketing the agricultural produce to its members. The Assessing Officer found that ....
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....embers of the assessee society. The deduction was denied, on a further ground that the non-members did not undertake any agricultural activity as required under Section 80P (4). Therefore, the Commissioner of Income Tax (Appeal) found that the assessee had not provided credit facilities to its members to assist agricultural activity and thus confirmed the Assessment orders challenged on two appeals, to the extent of 'interest income' of Rs. 17,61,080/- and Rs. 62,78,650/-, respectively, earned on jewel loan extended to class B members. 4. Aggrieved by the orders of the Commissioner of Income Tax (Appeal), the assessee filed appeals in I.T.A. Nos.730 and 731/Mds/2014 before the Income Tax Appellate Tribunal. The Tribunal perceived ....
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....nvolved in non-agricultural activity. 2. Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the Class B members of the assessee society can be treated as a member of the society for the purpose of Section 80P (2) (a) (i) when Class B members do not have the right to participate in the voting and meetings of the board of the society and were not recognised by the assessee itself for audit purposes. 3. Whether on the facts and in the circumstances of the case the Tribunal was right in not considering the fact that the assessee was lending monies for non-agricultural purpose without considering the provisions of Section 80P (4) and 2(24) (viia). 6. The learned counsel for the a....
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....n ITA No.292 & 293/Mds/2014 by a common order dated 17.03.2014 and also the decision of 'C' Bench in the cases of M/s. 1915 Vellalapatty Primary Agricultural Co-operative Credit Society Ltd. in I.T.A. Nos. 385 & 386/Mds/2014, M/s.6648 Attur Mulluvadi Primary Agricultural Co-operative Credit Society Ltd. in I.T.A. No. 387/Mds/2014 vide common order dated 01.05.2014. Based on the relevant provisions of State Co-operative Societies Act, 1983, governing similar assessees, the Tribunal observed that definition of 'members' includes 'associate members', as well. The Tribunal observed that such nominal members also enjoy statutory recognition as per the State Co-operative Societies Act. The Tribunal further observed that th....
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.... (a) 'co-operative bank' and 'primary agricultural credit society' shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (10 of 1949); (b) 'primary co-operative agricultural and rural development bank' means a society having its area of operation confined to a taluk and the principal object of which is to provide for long-term credit for agricultural and rural development activities. It is seen that the primary object of the society is to provide financial accommodation to its members to meet all the agricultural requirements and to provide credit facilities to the members, as per the bye-laws and as laid down in Section 5 (cciv) of the Banking Regulation Act, 1949. Fu....
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....oresaid decisions is applicable to the instant case. 16. In the light of the aforesaid facts and circumstances of the case, we are of the view, that the substantial question of law framed in the instant appeals, is answered against the Revenue. The exception barred out in Section 80P (4) of the Income Tax Act, 1961, is applicable to the assessee credit society. Hence, the appeals are accordingly dismissed. 10. The Income Tax Appellate Tribunal has clearly perceived that the assessee is not a co-operative bank and that the activities in the nature of accepting deposits, advancing loans etc., carried on by the assessee, but is confined to its members only and that too in a particular geographical area. Therefore, the respondent So....