INCOME TAX ACT, 1961

Section 80P(2)

Deduction under section 80P(2) - Denial of deduction as assessee had not fulfilled the primary object of a Primary Agricultural Credit Society - Allowability -

Assessee was a Primary Agricultural Credit Co-operative Society and claimed deduction under section 80P. The same came to be denied on the ground that the assessee had not fulfilled the primary object of a Primary Agricultural Credit Society in so far as it was not providing financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities. Held: Supreme Court in the case of The Mavilayi Service Co-operative Bank Ltd. [2021 TaxPub(DT) 0273 (SC)] clearly showed that Supreme Court had set aside the decision of the Full Bench of High Court in the case of The Mavilayi Service Co-operative Bank Ltd. [(2019) 414 ITR 67 (Ker) : 2019 TaxPub(DT) 4909 (Ker-HC)]. Supreme Court had also further explained the decision in the case of Citizen Co-operative Society Ltd. [2017 TaxPub(DT) 2053 (SC)] in so far as the deduction that was given without any reference to any restriction or limitation cannot be restricted or limited by implication. AO was directed to grant the assessee the benefit of deduction under section 80P as claimed.

Followed:Mavilayi Service Cooperative Bank Ltd. & Ors. v. CIT & Anr. 2021 TaxPub(DT) 273 (SC), Citizen Co-Operative Society Ltd. v. Asstt. CIT 2017 TaxPub(DT) 2053 (SC), UP Co-operative Cane Union Federation Ltd. v. CIT 1999 TaxPub(DT) 90 (SC) and Mavilayi Service Co-Operative Bank Ltd. v. CIT (2019) 414 ITR 67 (Ker-HC) : 2019 TaxPub(DT) 4909 (Ker-HC).

REFERRED :

FAVOUR : In assessee's favor.

A.Y. : 2016-17

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