TaxTMI 
TaxTMI 
2014 (4) TMI 1249
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....on effective grounds of appeal in each of the assessment years :- "1. The Learned CIT(Appeals) erred in law and on facts in not considering the fact that the byelaws of the assessee society prohibits membership from the person other than a farmer (agriculturist) or worker since the society is formed with he objectives for providing credit facilities to its members, supply of agriculture implements, seeds, fertilizers, consumer goods to its members who are farmers and workers. 2. The Learned CIT(Appeals) erred in law and on facts in not appreciating the fact that the assessee society being a credit co-operative society engaged in providing credit facilities to its members (i.e. farmer and workers) cannot enroll as nominal m....
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....y to its members. The society is also supplying agriculture goods like seeds, fertilisers, pesticides etc to its members. It filed its return declaring nil income. The assessing officer vide assessment order dated 21.12.2009 disallowing audit fees of Rs. 1,65,800/- u/s 43B.The assessing officer also noted that the assessee's interest income includes interest earned from Vishwanath Sugars Ltd includes Rs. 1,36,84,946/-. The society had shown net income of Rs. 72,17,343/- which had been claimed as deduction u/s 80P(2)(a)(i) and consequently filed nil return of income. The Assessing officer had treated the interest earned from Vishwanath Sugars Ltd as 'income from other sources' and also denied proportionate expenses including interest cost an....
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.... Sugars Ltd. Following the decision of Hon'ble High Court in the case of Sri Renuka Devi Urban Credit Co-operative Society Ltd (ITA No.5008/2009). No finding was given on the applicability of provision of section 80P(4). 3. The ld. DR, vehemently contended that the Assessee is a co-operative bank in view of the definition of the co-operative bank given under explanation to Sec. 80P(4) the Assessee is engaged in the business of banking. Sec. 80P(4) puts an embargo w.e.f. 1.4.2007 that if a co-operative society is carrying on banking business, the Assessee will not be entitled for the exemption. Reliance was placed on the decision of Hyderabad Bench of the Tribunal in the case of The Citizen Co-operative Society vs. Addl. CIT in ITA Nos. 1....
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.... (a) in the case of a co-operative society engaged in- (i) carrying on the business of banking or providing credit facilities to its members, or..............." the whole of the amount of profits and gains of business attributable to any one or more of such activities. "80P(4) The provisions of this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. Explanation.-For the purposes of this sub-section,- (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 ....
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....ny co-operative bank other than a primary agricultural credit society or primary co-operative agricultural and rural development bank but as per the provisions of Sec. 80P(2)(a)(i), a co-operative society engaged in carrying on the business of banking or providing credit facilities to its members is entitled for deduction. Since the assessee is a primary co-operative bank, therefore in our opinion the assessee is hit by the provision of section 80P(4) and assessee will not be entitled for deduction u/s 80P(2)(a)(i). 6. We have also gone through the order of this tribunal for the assessment year 2006-07. We noted that this decision will not assist the assessee as there was no section 80P(4) there during the impugned assessment year. This ....