2015 (9) TMI 1540

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....ssioner of Income Tax (Appeals) ought to have considered that the Tribunal in the case of Sri Chandraprabhu Urban Co-op. Credit Society Ltd. (2014) (45 Taxman 14) clearly brought out the definition of banking business. 2. The Commissioner of Income Tax (Appeals) ought to have considered that the Tribunal in the case of M/s. SL (SPL) 151, Karkudalpatty PACCS Ltd. Vs. ITO which has been filed u/s.260A before the Hon'ble Madras High Court. 3. The Commissioner of Income Tax (Appeals) ought to have considered that in Tamilnadu Co-op. Societies Act, 1983 the term Member is dealt in sections 4,5,6,8,13,14,15,20,21,23 to 35 38,40to 42, 44, 46, 51, 66, 69, 72, 81 and 85.. In all these sections the term member means only shareholder....

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....e assessee is a primary agriculture cooperative 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 against the assessment order for the ....

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.... 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 Agricultural Co-operative Credit S....

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....that the term '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 enhan....