TaxTMI 
TaxTMI 
2018 (10) TMI 282
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....Act, 1969. It is providing credit facilities to its members. For the assessment year 2014-2015, the assessment was completed vide order dated 30.12.2016, wherein assessee's claim of deduction u/s 80P(2) of the I.T.Act was denied, for the reason that the assessee is primarily engaged in the business of banking and in view of insertion of section 80P(4) of the I.T.Act, with effect from 01.04.2007, the assessee-society was not entitled to the deduction. The Assessing Officer also treated a sum of Rs. 1,13,93,354 being the interest received from investments with Pathanamthitta District Co-operative Bank Limited, as income from other sources, thereby denying the claim of deduction u/s 80P(2)(a)(i) of the I.T.Act. Further, the Assessing Office....
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.... the circumstances of the case under consideration, the Tribunal is correct in law in deciding against the assessee, the issue regarding entitlement for exemption under section 80P, ignoring the fact that the assessee is a primary agricultural credit society? 6.1 In considering the above question of law, the Hon'ble High Court rendered the following findings: "15. Appellants in these different appeals are indisputably societies registered under the Kerala co-operative societies Act 1969, for short KCS Act, and the bye-laws of each of them, as made available to this court as part of the paper books, clearly show that they have been classified as primary agricultural credit societies by the competent authority under the provis....
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.... the authorities and the Tribunal that they are primary agricultural credit societies in terms of clause (cciv) of section 5 of the BR Act having regard to the primary object or principal business of each of the appellants. It is also clear from the materials on record that the bye-laws of each of the appellants do not permit admission of any other co-operative society as member, except may be, in accordance with the proviso to sub-clause 2 of section 5(cciv) of the BR Act. The different orders of the Tribunal which are impeached in these appeals do not contain any finding of fact to the effect that the bye- laws of any of the appellant or its classification by the competent authority under the KCS Act is anything different from what we hav....
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....the view that the said claim can be granted only when interest income is received from investments with a co-operative society and not a co-operative bank. Therefore, the claim of the assessee u/s 80P(2)(d) of the I.T.Act is rejected. 8.2 As regards the claim of deduction u/s 80P(2)(a)(i) of the I.T.Act, with regard to interest income received on investments with co-operative banks, we noticed that an identical issue was decided in favour of the assessee by following the judicial pronouncements:- (i) CIT v. Karnataka State Co-operative Bank [251 ITR 194 (SC)] (ii) Vaveru Co-operative Rural Bank Ltd. v CIT [(2017) 396 ITR 371 (The Telungana And Andhra Pradesh High Court) (iii) Muttom Service Co-operative Bank Lt....