Case Law Details
Case Name : M/s. The Totgars' Cooperative Sale Society Limited Vs ITO (Supreme Court of India)
Related Assessment Year :
Courts :
Supreme Court of India
Become a Premium member to Download.
If you are already a Premium member, Login here to access.
The assessee, a co-op credit society, was engaged in providing credit facilities to its members and also marketing the agricultural produce of its members. The assessee had surplus funds which it invested in short-term deposits with banks and govt securities. The question arose whether the said interest earned on the said deposits was “business profits” and eligible for deduction u/s 80P(2)(a)(i).
The assessee argued that its activity of providing credit facilities to its members was an “eligible activity” u/s 80P(2)(a)(i) and that as the investments were made as per statutory requirem...
This is premium content. Please become a Premium member. If you are already a member, login here to access the full content.
Kindly Refer to
Privacy Policy &
Complete Terms of Use and Disclaimer.
I welcome this land mark judgment, Interest on Surplus funds generated by Co-Operative societies should be exempted from Income Tax, b’coz co-operative society generates funds to comply with the orders of Registrar of Co-Operative society in lieu of their deposit mobilisation campaigns. While mobilising sometimes the societies generate more funds, which they are forced to invest that too for a lower rate of interest, compared to what they are offering their members. So the interest earned on such surplus funds should at any cost be exempted from Income Tax. If any body wants to share their valuable views with me, u r most welcome, my id is ksunil_nair2010@yahoo.co.in
This is an important decision applicable in case of RRBs who were having credit deposit ratio of only 15-20%, diverting funds from rural areas leading to poor farm growth and farmers’ suicides yet claiming 100% income exempt u/s 80P.