Krishnarajapet Taluk Agri Pro Co-op Marketing Society Ltd. Vs PCIT (ITAT Bangalore)
In the light of the principles enunciated by the Supreme Court in Totgars Co-operative Sale Society (supra), in case of a society engaged in providing credit facilities to its members, income from investments made in banks does not fall within any of the categories mentioned in section 80P(2)(a) of the Act. However, section 80P(2)(d) of the Act specifically exempts interest earned from funds invested in co-operative societies. Therefore, to the extent of the interest earned from investments made by it with any co-operative society, a co-operative society is entitled to deduction of the whole of such income under section 80P(2)(d) of the Act. However, interest earned from investments made in any bank, not being a co-operative society, is not deductible under section 80P(2)(d) of the Act.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal filed by the assessee against order of Pr.CIT, Mysore, dated 19.03.2020, passed under section 263 of the Income Tax Act, 1961 (hereinafter called ‘the Act’), in relation to Assessment Year 2015-16.
2. The assessee is an agricultural produce co-operative marketing society Ltd registered under the ‘Karnataka Co-operative societies Act, 1959. The main objective of the society is to provide credit facilities to members, purchase and sale of fertilizers, agriculture implements. seeds etc., and purchase and sale of food grains under the public distribution system on behalf of the government, purchase and sale of petrol & diesel, letting out of shops / godowns / warehouse for storage, processing, facilitating the marketing of the commodities etc.,
3. During the year under consideration, the assessee earned gross total income of Rs.59,37,139.00 being Profit or gains from Business or Profession amounting to Rs. 50,70,239.00, income from house property amounting to Rs. 1,66,740.00, and Income from other source amounting to Rs. 7,00,160.00 which comprises of
