TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 192
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....business of providing credit facilities to the members of the society and filed the Return of Income for the Asst. Year 2016-17 on 12.10.2016 with total income of Rs. 3,01,750/-.The assessee's income includes income from house property, business income and interest income. The return of income was processed under Section 143(1) of the Act on 2.11.2016. Subsequently, the case was selected for scrutiny under CASS and e-Notice under Section 143(2) and 142(1) of the Act were issued. In compliance, the assessee has furnished copies of computation of income, Balance Sheet, Bank Statements, Bye-laws of the co-operative Society and other details electronically. The Assessing Officer has examined the details and observed that the assessee is a co-operative society engaged in the business of advancing of short term loans (agriculture loans for crop production and marketing of crops and advancing medium term loans for development of agricultural infrastructure) and has disclosed the rental income, profit on sale of agriculture commodities. And the exemption under Section 80P(2)(a)(i) of the Act was claimed. Further, the interest and dividend income has been disclosed under 'income other sourc....
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....of the Act dt.13.12.2018. Aggrieved by the order, the assessee has filed an appeal with the CIT(Appeals), whereas the CIT(Appeals) concurred with the action of the Assessing Officer and dismissed the appeal. Aggrieved by the order of CIT (Appeals), the assessee has filed an appeal with the Tribunal. 6. At the time of hearing, the ld. AR submitted that the CIT(Appeals) has erred in confirming the denial of deduction under Section 80P(2) of the Act and the decisions relied by the CIT(Appeals) are distinguishable. Further the society accepts the deposits and lends finances to its members and details of members of the society are available and also interest on deposits are exempted and supported his arguments with the decisions of the Hon'ble High Court and Tribunal and prayed for allowing the appeal. Contra, the ld. DR relied on the orders of the CIT (Appeals). 7. We heard the rival submissions and perused the material on record. The learned Authorized Representative emphasizing on the claim of deduction in respect of interest earned from the co-operative societies/Banks, whereas the Assessing Officer denied the claim of the assessee, observing that the interest earned on surplu....
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....the Assessment Years involved was Assessment Years 1991-92 to 1999-2000. The nature of interest income for all the Assessment Years was identical. The bone of contention of the Assessee in AY 2007-08 to 2011-12 was that the deduction under Section 80P(2) of the Act is claimed by the respondent assessee under Section 80P(2)(d) of the Act and not under Section 80P(2)(a) of the Act which was the claim in AY 1991-92 to 1999- 2000. The reason given by the Assessee was that in AY 2007-08 to 2011-12 investments and deposits after the Supreme Court's decision against the assessee Totgar's Co-operative Sale Society Ltd. (supra), were shifted from Schedule Banks to Cooperative Bank. U/s.80P(2)(d) of the Act, income by way of interest or dividends derived by a Cooperative Society from its investments with any other Co-operative Society is entitled to deduction of the whole of such interest or dividend income. The claim of the Assessee was that Co-operative Bank is essentially a Co-operative Society and therefore deduction has to be allowed under Clause (d) of Sec.80P(2) of the Act. The Hon'ble Karnataka High Court followed the decision of the supreme Court in The Totgars Co-operat....
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....d does not participate /share the surplus of the society and do not have voting rights. We found the coordinate bench of the Tribunal in the case of M/s. Kodavoor Vyavasaya Seva Sahakari Sangha Niyamitha & Others Vs. ITO (ITA No.707/Bang/2019 dt.26.08.2019) has dealt on the criteria of nominal members. We considered the observations of the co-ordinate bench at Para 5 of the order which is read as - 5. Similarly, on the issue of definition of the Member where Nominal Members are also eligible for benefits. The Member defined under the co-operative society Act bye-laws includes Nominal Member. We found Ahmadabad Bench of ITAT in ITA No.1328/Ahmd/2018 for Asst. Year 2015-16 in the case of Trapaj Vibhageeya Khet Udyog Mal Rupantar Food Processing Sahakari Mandali Ltd. Vs. DCIT (supra) at para 7 has held as under : " 7. We have heard ld.DR and gone through the record. We have also gone through case laws cited both the sides before ld.CIT(A). We find that fundamental facts which are not disputed by the Revenue authorities are that the assessee is a primary agricultural credit society registered under the Gujarat Cooperative Societies Act, 1961. It is engaged in providing credit facil....