Gopmahal Samabay Krishi Unnayan Samity Ltd. Vs. ACIT, Circle-38, Midnapore

Parties Involved

Facts Summary

The assessee, Gopmahal Samabay Krishi Unnayan Samity Ltd., a Primary Agricultural Co-operative Society, filed returns for the assessment years 2015-16 and 2017-18. The case was selected for limited scrutiny, and the assessee claimed deductions under Section 80P of the Income Tax Act, 1961. The Assessing Officer disallowed the deductions, stating that the society provided credit facilities to non-members, which was contrary to its bye-laws. The assessee appealed this decision, arguing that it was entitled to the deductions as it provided credit facilities to its members and was not a co-operative bank. The Commissioner of Income Tax (Appeals) partly allowed the appeal, directing the Assessing Officer to verify if the society's bye-laws permitted extending credit facilities to non-members. The assessee further appealed to the Income Tax Appellate Tribunal, which heard rival contentions and examined the submissions.…

Legal Issues

• 1. Whether the assessee is entitled to deduction under Section 80P(2)(a)(i) for providing credit facilities to its members.
• 2. Whether the disallowance of Rs. 3,00,000/- on account of 'Provision for Gratuity Payable' was correct.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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