Gokul Urban Co-op. Credit Society Limited Vs ACIT (ITAT Panaji)
Panaji ITAT: Credit Co-operative Society Entitled to Section 80P Deduction Even on Enhanced Business Income Arising From Disallowed Provisions
Summary: The assessee, a credit co-operative society engaged in accepting deposits from and providing credit facilities to its members, filed five appeals concerning Assessment Years 2013-14, 2014-15 and 2016-17 to 2018-19. In the lead appeal for AY 2013-14, the assessment was reopened under sections 147 and 148 after information regarding cash deposits of ₹3,94,45,000 and other credits of ₹7,45,000. The assessee returned nil income after claiming deduction of ₹48,24,658 under section 80P(2)(a)(i). The Assessing Officer added ₹1,86,71,000, representing provisions debited under various heads, and denied section 80P deduction on the resultant income. The CIT(A)/NFAC dismissed the appeal.
The Tribunal held that the assessee, being a credit co-operative society providing credit facilities to its members, was entitled to deduction under section 80P(2)(a)(i) on income attributable to its banking business. It distinguished Totgars Cooperative Sale Society Ltd. vs. ITO on the basis that the assessee in that case was engaged in marketing agricultural produce of its members, whereas the present assessee was engaged in providing credit facilities. The Tribunal also relied upon the decisions in Marathwada Krishi Vidyapeeth Karmachari Sahkari Patsanstha vs. PCIT & others and Mysore University Employees Co-op Credit Society Ltd. vs. Income-tax Officer concerning interest income and section 80P deductions.
