TaxTMI 
TaxTMI 
2016 (11) TMI 1614
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....rcumstances of the case. 2. The Ld. Commissioner of Income Tax (Appeals) has erred in deleting the disallowance of deduction claimed by the assessee under section 80P(2)(a)(i) of the Act. 3. While placing reliance on the decision of the Kerala High Court in the case of The Chirakkal Service Co-operative Bank Ltd in ITA No.212 of 2013, the Ld. (IT (A) ought to have considered whether the assessee-society claiming the status of "Primary Agricultural Credit Society" has actually fulfilled the primary object or principal business of providing agricultural loans to agriculturists. 4. The Ld. CIT (A) ought to have also considered an earlier decision of the jurisdictional High Court in WP No.14226 of 2012 dated 14-09-2012 in the case of T....
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....s 144 of the I T Act vide order dated 13.3.2015. The Assessing Officer completed the assessment by making certain additions and rejecting the claim of benefit of deduction u/s 80P(2)(a)(i) of the Act. 5 Aggrieved by the disallowance u/s 80P(2)(a)(i), the assessee preferred appeal to the first appellate authority. Before the CIT(A), it was contended that for the AYs 2010-11, 2011-12 and 2013-14, the Division Bench of the Hon'ble jurisdictional High Court in the case of the Chirakkal Service Cooperative Bank Ltd & others in ITA No.212 of 2013 ( Judgment dated 15th February 2016) in which the assessee was also a party, had decided the matter in favour of the assessee. The CIT(A), after going through the arguments, evidences on record and tak....
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....f deduction u/s 80P(2). The Hon'ble High Court was considering the following substantial question of law: a) Whether on the facts and in 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? 7.1 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 cooperative societies Act, 1969, for sort, KCS Act and the bye-laws of each of them, as made available to this court as part of the paper books, c....
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.... applicants. 16. The position of 1aw being as above with reference to the statutory provisions, the appellants had shown to 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- 1aws ....
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.... hold that the assessee is entitled to the benefit of deduction u/s 80P(2)(a) of the I T Act. Accordingly, the ground nos 2 to 5 are dismissed. It is ordered accordingly. 8 As regards ground no 6, the brief facts are as follows: The Assessing Officer had made a ad-hoc disallowance of 5% out of the total interest paid by the assessee on the deposits received from its members. The amount of such disallowance was Rs. 44,97,108/-. The Assessing Officer had added the same under the head 'business income'. On further appeal by the assessee, the disallowance made by the Assessing Officer was confirmed by the CIT(A) for the reason that the entire details of deposits were not submitted before the Assessing Officer and therefore, the Assessing O....