Expense out of earmarked fund for member’s welfare, not deductible

Brief of the Case ITAT Bangalore held in the case of ACIT vs. M/s Tumkur Veerashiva Co-operative Bank Ltd. that from the facts, it is clearly shows that the amount spent out of members benevolent fund and members death relief fund are spent for the welfare of the members. It is also clear from the facts that these funds are created out of appropriation of profits. The Karnataka Co-Operative Society Act, 1959 mandates the Societies to appropriate certain percentage of its profit before declaration of dividends to its members but, the said two funds are not covered under the said act. Therefore,...