TaxTMI 
TaxTMI 
2019 (2) TMI 518
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....s), Thiruvananthapuram ("CIT(A)") has erred in disallowing the deduction claimed by the Appellant under section 80P(2)(a)(i) amounting to Rs. 81,55,90,334 and restricting the deduction under section 80P only to the extent of profits earned by the Appellant from the 'Land Development Bank' activity without considering the fact that the Appellant is a Co-operative Society registered under the Kerala Cooperative Societies Act, 1969 and is in the business of providing credit facilities to its members not as a co-operative bank, but as a credit institution and a co-operative society by virtue of its nature of business of providing credit facilities to its members. The CIT(A) has erred in not considering the fact that to be denied the benefit of Section 80P, the Appellant would have to first fall within the ambit of the term "cooperative bank" as defined under the Banking Regulations Act, 1949. The CIT(A) has erred in not considering the fact that the Appellant is "Cooperative Credit Society" or "State Land Development Bank" which is distinct from the "Co-operative Bank" as the above terms have been defined separately under the Banking Regulation Act, 1949 and NBARD Act respectiv....
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....ion provided by the said section would not be available to it from A.Y. 2007-08 onwards and, accordingly, stood rightly denied the impugned claim in its assessment for the year. So. However, we also clarify that to the extent the assessee is (also) or is acting (also) as a 'state land development bank', which too falls within the purview of the NBARD Act, exigible for financial assistance from NBARD, the assessee's claim merits acceptance. and it would be entitled to deduction u/s. 80P(2)(a)(i) on the income relatable to its lending activities as such a bank. The matter is, therefore, remitted to the file of the AO for a consideration of this aspect of the matter and adjudication as per law on factual verification and determination, per a speaking order, after allowing reasonable opportunity to the assessee to establish its claims, the onus for which is only on it. We decide accordingly. 4.3.2 Aggrieved by the order of the Tribunal for AY 2007-08, as above, both the Appellant and Department filed appeal before Hon'ble High Court of Kerala Hon'ble High Court has dismissed both appeals of the Appellant & Department in ITA 103 of 2011 & ITA 137 of 2011 vide order....
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....principal business of which is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including the marketing of crops); and (2) The bye-laws of which do not permit admission of any other co-operative society as member: Provided that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State government for the purpose. To fall under the aforesaid definition of "primary agricultural credit society", an assessee has to satisfy the two conditions under Sub-Clauses (1) and (2) of that Clause; which are conjunctive, and, not alternative. 17. The condition in Sub-Clause (2) of Clause (cciv) of Section 5 of the BR Act is to the effect that a primary co-operative society should not be one which permits admission of any other co-operative society as member, to be a 'primary agricultural credit society'. The provisions of the Kerala Co-operative Land Mortgage Banks Act, 1960 and of the ITA Nos.182 & 26/Coch/2015 CARDB Act show that the appellant Kerala ....
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....v) or section 36(1)(v) respectively, the claim of deduction cannot be allowed. Therefore, the assessee's grounds for both the assessment years with regard to the additions made by the Assessing Officer on account of contribution made to non-recognized superannuation fund, are rejected. It is ordered accordingly.' 4.2.3 Following the decision of jurisdictional Tribunal, as above, the disallowance of Rs. 2,44,46,754 is confirmed and the grounds raised by the Appellant on this issue are dismissed." 6.1 Aggrieved by the order of the CIT(A), the assessee has filed the present appeal before us. 6.2 The Ld. Counsel for the assessee stated that the contribution made by the assessee in the unrecognized provident fund or superannuation fund can be disallowed. However, it was submitted that when the employees withdraw the amount from such fund, to the extent of withdrawals, it should be allowed as deduction u/s. 37(1) of the Act. 6.3 We have heard the rival submissions and perused the material on record. We notice that for the assessment year 2009-10 the assessee has accepted the CIT(A)'s order and no further appeal was preferred to the Tribunal. The assessee's contention that to the ex....
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.... CIT(A) has erred in disallowing the amount of Rs. 1,21,86,468 paid to Primary banks by erroneously treating the said payment as commission and disallowing the same under section 40(a)(ia) of the Act for non-deduction of TDS without considering the fact that the said payment is only incentives paid for mobilizing deposits from its members and not a commission payment." 9. The first ground raised in the above appeal is with reference to grant of deduction u/s 80P(2)(a)(i) of the I.T.Act. We have already considered the issue in ITA No.566/Coch/ 2018. For our reasoning mentioned in paragraph 5.5 (supra), we decide this ground against the assessee. 10. The second ground raised in the above appeal is with reference to disallowance of contribution made to staff welfare fund. This issue was already considered by us in ITA No.566/Coch/2018. For our reasoning mentioned in paragraph 6.3 (supra), we reject ground No.2 raised by the assessee. 11. Ground No.3 is with reference to disallowance of expenditure for non-deduction of TDS. The assessee had paid a sum of Rs. 1,21,86,468 as commission to PCARDB. The commission was paid by the assessee to PCARDB for mobilizing deposits for the assess....