CIDCO Employees Co–op. Credit Society Vs ITO (ITAT Mumbai)
ITAT Mumbai held that co–operative credit society, not undertaking any of banking business and merely providing credit facilities to its members only, would not hit by provisions of section 80P(4) of the Income Tax Act 1961 and thus, entitled for deduction u/s. 80P(2).
Facts- The assessee is a co–operative credit society, registered under Maharashtra co–operative society Act, 1960 and is engaged in providing credit facilities to those CIDCO employees who are members of credit society.
During the year, the assessee has shown income of Rs. 56,64,971/– from business and claimed deduction u/s. 80P of the Act amounting to Rs. 56,64,971/–. AO held that assessee’s credit society fell under the category of primary co–operative bank and therefore, the provisions of section 80P(4) is applicable in assessee’s case and disallowed assessee’s claim for deduction of Rs. 56,64,971/– u/s. 80P. Penalty proceedings u/s. 271(1)(C) of the Act were separately initiated for furnishing inaccurate particulars of income.
CIT(A) confirmed the assessment order. Being aggrieved, the present appeal is filed.
Conclusion- Hon’ble Bombay High Court, in the case of M/s. Quepem Urban Credit Society Ltd. V. ACIT, has held that interest and dividend earned from investments with other co–operative banks/societies is entitled for deduction u/s. 80P(2)(a)(i) of the Income Tax Act.
