COMMISSIONER OF INCOME TAX Vs. TIRUCHENGODE AGRICULTURAL PRODUCERS COOPERATIVE MARKETING SOCIETY LTD; AMMAPET PRIMARY AGRICULTURAL COOPERATIVE BANK LTD

JUDGEMENT

(1.) These Appeals have been filed by the Revenue against the orders of the Income Tax Appellate Tribunal Madras 'C' Bench dated 17.04.2015 in I.T.A.Nos.27 to 30/ Mds/2015 and 'A' Bench dated 30.10.2015 in I.T.A. No. 1845/Mds/ 2014.

(2.) The facts of the case are as follows :-

(3.) Aggrieved by the assessement orders, the assessees filed appeals to the Commissioner of Income Tax (Appeal). It is submitted that on identical issue in other cases the Commissioner of Income Tax (Appeal) has found that as per the bye-laws there were two types of members viz., Class A and Class B members. Class A members are normal members who have voting rights and were involved in the running of the assessee's business and can become the members of Administrative committee, etc. Class B members are anyone other than Class A member, who had availed loans from the assessee and is necessarily enrolled as Class B member. The Class B member is not recognized by the assessee for the purpose of the records in statute. Further, the majority of jewel loan and other non-farming loan at a higher interest were given to Class B members. Therefore, the Commissioner of Income Tax (Appeal) held that the asseessees cannot claim the benefit of deduction under Section 80P (2) (a) (i) on the interest received from the Class B non-members of the assessees' society. The deduction was also denied on the ground that the non-members did not undertake any agricultural activity as required under Section 80P (4). Therefore, the Commissioner of Income Tax (Appeal) held that the assessees had not provided credit facilities to its members to assist agricultural activity and thereby confirmed the Assessment orders. But, in the present cases the Commissioner of Income Tax (Appeal) followed the decision of the Tribunal and had allowed the appeals.