citedby: 176513732

Bannanje Grahakara Vividhoddesha ... vs Income Tax Officer, Ward-1, & Tps, , ... on 6 May, 2024

18. The AO further noted that A class members are 3437 as on 31/03/2016. The assessee also furnished list of persons of A class ITA No.79/Bang/2024 Page 12 of 17 members who made deposits with the assessee. However, the assessee failed to furnish the list of nominal members/associated members in spite of repeated request made by the AO. The ld. DR submitted that as per the Karnataka Co-operative Society Act sec. 18 amended by the Act 2014, the associated/nominal members should not exceed 15% of the regular members, if it exceeds, then it has to be regularized within the period of 6 months. However, the assessee has not furnished the details of nominal/associated members and the assessee could not furnish whether the assessee society has complied to amended Sec. 18 of the Karnataka Co-operative Society Act. The lower authorities have disallowed deduction on interest income received from providing credit facilities from all the members by following the judgment of Hon'ble Apex Court in the case of Citizen Co-operative Society Ltd., Hyderabad Vs. ACIT noted supra.

Income Tax Appellate Tribunal - Bangalore Cites 31 - Cited by 0 - Full Document

Mudur Vyavasaya Seva Sahakari Sangha ... vs Income Tax Officer, Ward-2, , Udupi on 29 May, 2024

15. The AO further noted that A class members are 1706, C Class members are 638 and D Class Members are 111 as on 31/03/2017. The non-members are almost half of the regular members. The assessee is doing business with non-members and the profit from such business is divided among the members of the society. The ld. DR submitted that as per the Karnataka Co-operative Society Act sec. 18 amended by the Act 2014, the associated/nominal members should not exceed 15% of the regular members, if it exceeds, then it has to be regularized within the period of six months. We note that the lower authorities have disallowed deduction on interest income received from providing credit facilities from all the members by following the judgment of Hon'ble Apex Court in the case of Citizen Co-operative Society Ltd., Hyderabad Vs. ACIT noted supra.

Income Tax Appellate Tribunal - Bangalore Cites 20 - Cited by 0 - Full Document

Primary Agricultural Credit ... vs Income Tax Officer, Ward 1 And Tps, ... on 3 July, 2024

10. Further in respect of deduction u/s 80P(2)(d), considering the rival submissions, we note that here the issue is that whether the assessee is eligible to claim of deduction u/s. 80P(2)(a)(i) and/or 80P(2)(d) on the interest income earned on its investments amount made with District co-operative banks. The Ld.CIT(A) has not accepted the claim of the assessee by relying on the judgment of Hon'ble Karnataka High Court in case of Totgars' Co-operative Sales Society Ltd. (supra) and Hon'ble Apex Court in the case of Citizens Co-operative Society Ltd. noted supra. During the course of hearing, the Ld.AR of the assessee relied on the Circular No. 18/2015 dated 02.11.2015 and submitted that as per the provisions of the Karnataka Co-operative Societies Act, the assessee is required to maintain SLR from the deposits received from the members and has to invest 100% from the general reserve and 25% from the deposits collected from members. Accordingly, assessee has invested in the fixed deposits. As per the circular, the income received from the investments should be treated as business income u/s. 28 of the Income Tax Act and assessee is eligible to make a claim of deduction u/s. 80P(2)(a)(i) as business income. Further, the assessee also submitted that the investments were made in co-operative banks which are co-operative society. It is ITA No.947/Bang/2024 Page 10 of 15 submitted by the ld. AR that interest received on such investments are to be allowed for deduction u/s. 80P(2). In support of his argument, the assessee relied on the following decisions:

Income Tax Appellate Tribunal - Bangalore Cites 22 - Cited by 0 - Full Document

M/S. The Bharathi Co-Operative Credit ... vs Income Tax Officer, Ward-7(2)(1) , ... on 23 July, 2024

Further the Nominal/Associate members are not entitled to attend the general meetings of the society, not eligible to contest on election. The assessee is doing business with non-members and the profit from such business is divided among the regular members of the society. The ld. DR submitted that as per the Karnataka Co- operative Society Act sec. 18 amended by the Act 2014, the associated/nominal members should not exceed 15% of the regular members, if it exceeds, then it has to be regularized within the period of six months. We note that the lower authorities have disallowed deduction on interest income received from providing credit facilities from all the members by following the judgment of Hon'ble Apex Court in the case of Citizen Co-operative Society Ltd., Hyderabad Vs. ACIT noted supra.

Income Tax Appellate Tribunal - Bangalore Cites 27 - Cited by 0 - Full Document

Kavu Primary Agricultural Credit ... vs Income Tax Officer, Ward-1, Puttur on 29 July, 2024

The decision relied on by the ld. AR in the case of Mavilayi Service Co-operative Bank Ltd., (supra) is under Kerala Co-operative Societies Act in which it has been held that proportionate deduction u/s. 80P(2)(a)(i) should be granted to the assessee from the interest income received from providing credit facilities to its members but not from the non-members. The Para 33 of the said judgement says as under:-

Income Tax Appellate Tribunal - Bangalore Cites 18 - Cited by 0 - Full Document

Kavu Primary Agricultural Credit ... vs Income Tax Officer, Ward-1, Puttur on 29 July, 2024

The decision relied on by the ld. AR in the case of Mavilayi Service Co-operative Bank Ltd., (supra) is under Kerala Co-operative Societies Act in which it has been held that proportionate deduction u/s. 80P(2)(a)(i) should be granted to the assessee from the interest income received from providing credit facilities to its members but not from the non-members. The Para 33 of the said judgement says as under:-

Income Tax Appellate Tribunal - Bangalore Cites 18 - Cited by 0 - Full Document

Kavu Primary Agricultural Credit ... vs Income Tax Officer, Ward-1, Puttur on 29 July, 2024

The decision relied on by the ld. AR in the case of Mavilayi Service Co-operative Bank Ltd., (supra) is under Kerala Co-operative Societies Act in which it has been held that proportionate deduction u/s. 80P(2)(a)(i) should be granted to the assessee from the interest income received from providing credit facilities to its members but not from the non-members. The Para 33 of the said judgement says as under:-

Income Tax Appellate Tribunal - Bangalore Cites 18 - Cited by 0 - Full Document

Kavu Primary Agricultural Credit ... vs Income Tax Officer, Ward-1, Puttur on 29 July, 2024

The decision relied on by the ld. AR in the case of Mavilayi Service Co-operative Bank Ltd., (supra) is under Kerala Co-operative Societies Act in which it has been held that proportionate deduction u/s. 80P(2)(a)(i) should be granted to the assessee from the interest income received from providing credit facilities to its members but not from the non-members. The Para 33 of the said judgement says as under:-

Income Tax Appellate Tribunal - Bangalore Cites 18 - Cited by 0 - Full Document

Vipra Vividhoddesha Souharda Sahakari ... vs Income Tax Officer, Ward-1 & Tps,, ... on 3 September, 2024

10. Further in respect of deduction u/s 80P(2)(d), considering the rival submissions, we note that here the issue is that whether the assessee is eligible to claim of deduction u/s. 80P(2)(a)(i) and/or 80P(2)(d) on the interest income earned on its investments amount made with District co-operative banks. The Ld.CIT(A) has not accepted the claim of the assessee by relying on the judgment of Hon'ble Karnataka High Court in case of Totgars' Co-operative Sales Society Ltd. (supra) and Hon'ble Apex Court in the case of Citizens Co-operative Society Ltd. noted supra. During the course of hearing, the Ld.AR of the assessee relied on the Circular No. 18/2015 dated 02.11.2015 and submitted that as per the provisions of the Karnataka Co-operative Societies Act, the assessee is required to maintain SLR from the deposits received from the members and has to invest 100% from the general reserve and 25% from the deposits collected from members. Accordingly, assessee has invested in the fixed deposits. As per the circular, the income received from the investments should be treated as business income u/s. 28 of the Income Tax Act and assessee is eligible to make a claim of deduction u/s. 80P(2)(a)(i) as business income. Further, the assessee also submitted that the investments were made in co- operative banks which are co-operative society. It is submitted by the ld. AR that interest received on such investments are to be allowed for deduction u/s. 80P(2). In support of his argument, the assessee relied on the following decisions:

Income Tax Appellate Tribunal - Bangalore Cites 19 - Cited by 0 - Full Document

Vipra Vividhoddesha Souharda Sahakari ... vs Income Tax Officer, Ward-1 & Tps, , ... on 3 September, 2024

10. Further in respect of deduction u/s 80P(2)(d), considering the rival submissions, we note that here the issue is that whether the assessee is eligible to claim of deduction u/s. 80P(2)(a)(i) and/or 80P(2)(d) on the interest income earned on its investments amount made with District co-operative banks. The Ld.CIT(A) has not accepted the claim of the assessee by relying on the judgment of Hon'ble Karnataka High Court in case of Totgars' Co-operative Sales Society Ltd. (supra) and Hon'ble Apex Court in the case of Citizens Co-operative Society Ltd. noted supra. During the course of hearing, the Ld.AR of the assessee relied on the Circular No. 18/2015 dated 02.11.2015 and submitted that as per the provisions of the Karnataka Co-operative Societies Act, the assessee is required to maintain SLR from the deposits received from the members and has to invest 100% from the general reserve and 25% from the deposits collected from members. Accordingly, assessee has invested in the fixed deposits. As per the circular, the income received from the investments should be treated as business income u/s. 28 of the Income Tax Act and assessee is eligible to make a claim of deduction u/s. 80P(2)(a)(i) as business income. Further, the assessee also submitted that the investments were made in co- operative banks which are co-operative society. It is submitted by the ld. AR that interest received on such investments are to be allowed for deduction u/s. 80P(2). In support of his argument, the assessee relied on the following decisions:

Income Tax Appellate Tribunal - Bangalore Cites 19 - Cited by 0 - Full Document

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