TaxTMI 
TaxTMI 
2019 (12) TMI 33
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..../s 80P of the Act. 2. According to the AO, the assessee has claimed to be a Cooperative credit society registered under Karnataka State Cooperative Societies Act, 1959 and is engaged in the business of accepting deposits and providing credit facilities to its members, besides making investments. The assessee has claimed deduction u/s 80P of the Act and accordingly declared NIL income. 3. During the course of assessment proceedings, the AO noticed that the assessee was having different categories of members, viz., Regular Members, Associate members and Nominal members. He noticed that the nominal members are also mentioned as Associate Members, i.e, both categories were treated alike. The assessee was having 2038 nominal members/Associ....
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....jection of claim for deduction u/s 80P of the Act in respect of its business income. Before me, the Ld A.R placed his reliance on the decision rendered by the division bench of Bangalore ITAT in the case of M/s Bapooji Pattin Souharda Sahakari Niyamit vs. ITO (ITA No.544/Bang/2019 dated 04-09-2019) and submitted that the matters may be restored to the file of the AO for examining the facts as held in the above said case. 5. The Ld D.R, on the contrary, submitted that the AO had rejected the claim for deduction u/s 80P for the reason that the assessee has carried on business with nominal/associate members, who cannot be called as 'members' within the meaning of sec.80P(2)(a)(i). He submitted that under the provisions of sec.80P(2)(a)(i) o....
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....d 3831 regular members. The AO has also observed that the nominal members have been interchangeably referred to as Associate Members also. However, the Ld A.R is contending that there is difference between nominal member & associate members. The Ld A.R further submitted that the limit of 15% prescribed in the Karnataka Co-operative Societies Act would apply only to associate members. Hence the question as to whether nominal members and associate members would fall in the same category or they are different from each other requires clarification. 8. The principle of Mutuality shall apply when there is parity of contributors and participators, i.e., the contributors as a class should be eligible to participate in profits also. In the case ....
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....ad denied deduction u/s 80P of the Act in AY 2015-16 in the case of above said assessee without pointing out any other reason, the matter was restored to the file of the AO. 10. I notice that the "Principle of Mutuality" emphasized by Hon'ble Supreme Court in the case of Citizen Co-operative Society Ltd (supra) was not discussed in the above said decision. As stated earlier, the question whether "nominal members" and "associate members" would also quality as "members" within the meaning of sec.80P(2)(i) also requires examination in the light of provisions of Karnataka Co-operative Societies Act and/or Bye Laws of Society. In the instant case, the Ld A.R is also contending that there is difference between nominal members and associ....