Saraswathi Credit Souharda Sahakari Sangha Ltd Vs ITO (ITAT Bangalore)
ITAT Bangalore remitted the matter back to AO since lower authorities failed to examine the submissions and documentary evidence with regard to deduction u/s. 80P(2)(a)(i) of the Income Tax Act that credit facilities are extended to its members including associate and nominal members.
Facts- The assessee is a souharda cooperative society duly registered under the Karnataka Souharda Sahakari Act, 1997 and is engaged mainly in the business of accepting deposits from members and lending credit facilities to its member. The assessee is also engaged in the business of issuing e-stamp papers, insurance agency services, etc. which is insignificant in volume.
The assessee filed the return of income claiming deduction of Rs. 3,37,91,925/- u/s. 80P(2)(a)(i) of the Income Tax Act, 1961 (the Act). AO held that the assessee is not carrying on the business of providing banking facilities only to its members but is providing services to common public also. The AO further held that the activities of the assessee is that of finance and cannot be regarded as a cooperative society. Accordingly the AO denied the benefit of deduction u/s. 80P(2)(a)(i). CIT(A) confirmed the addition. Being aggrieved, the present appeal is filed.
