Cochin ITAT dismisses
Revenue’s appeal against CIT(A) order allowing deduction u/s 80P to assessee
(primary agricultural co-operative society), distinguishes SC ruling in
Citizens Co-operative Society; Notes that SC had denied deduction u/s 80P to
assessee therein as its activities were in violation of the Provisions of
the Mutually Aided Cooperative Societies Act, 1995 (MACSA) under which it was
formed and substantial deposits were from `nominal members’ who were
actually non-members as per the relevant provisions; Observes that definition
of a 'member' as provided in Sec 2(1) of the Kerala Cooperative Societies Act
includes ‘nominal member’, holds that “deposits from such nominal members
cannot be considered or treated as from the non-members or from public as was
noted by the aforementioned SC ruling’; Also Refers to SC ruling in U.P.
Co-operative Cane Union which had held that the term ‘member’ u/s 80P(2) has to
be construed in terms definition under State cooperative law; Relies on
jurisdictional HC ruling in Chirakkal Service Co-operative Bank Limited &
Ors., wherein it was held that a primary agricultural credit Society registered
as such under the Kerala Co-operative Societies Act, 1969 is entitled to the
benefit of deduction u/s 80P(2); Holds that AO is not competent to decide issue
whether assessee is a primary co-operative society or a co-operative bank,
notes that RBI has issued letter to societies similar to assessee stating
that they are primary agricultural credit societies and thus, rejects AO’s
contention that assessee is not entitled to deduction in view of provisions of
Sec. 80P(4) (denying benefit to co-operative bank):ITAT
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