Law:

Section:

Section 80P, of the Income-tax Act, 1961 - Deductions - Income from co-operative societies (Primary Co-operative bank) - Assessment years 2008-09, 2009-10, 2011-12 - Assessee, a co-operative society was registered under Co-operative Society Act - It was engaged in providing credit facilities to its members - It claimed deduction under section 80P(2)(a)(i), which was disallowed by Assessing Officer holding that assessee was a primary co-operative bank, therefore hit by provisions of section 80P(4), which excluded benefit of section 80P - It was found that assessee-society was providing credit mainly to its members and its transactions with non-members were insignificant - Moreover, it was undisputed that bye laws of society did not allow any co-operative society to become its member - Whether on facts, assessee was not a co-operative bank rather it was a co-operative society and, therefore, its claim for deduction was to be allowed - Held, yes [Paras 12, 13] [In favour of assessee] FACTS â–  The assessee was a co-operative society registered under the Goa Co-operative Societies Act, was engaged in providing credit facilities to its members. The income so earned from said activity, was claimed as deduction under section 80P(2)(a)(i). â–  The Assessing Officer disallowed the appellant's claim on the ground that the appellant was a primary co-operative bank and, therefore, hit by the provisions of Section 80P(4) which excluded the benefit of section 80P. â–  However, the Commissioner (Appeals) allowed assessee's claim holding that assessee was not a cooperative bank but a co-operative credit society. â–  The Tribunal restored Assessing Officer's order. â–  On appeal: HELD â–  Section 80P provides deduction in support of income of co-operative societies. Sub-section (1) allows deduction to Co-operative Society to the extent its gross income includes any income referred to in sub-section (2) in computing its total income. Sub-section (2) refers to various incomes to which the deduction under sub-section (1) is available. In this case, the court is concerned with clause (a)(i) of sub-section (2), which refers to a co-operative…