Special Story – The Maharashtra Co-op. Housing Society Exemption under section 80P is enumerated under different heads and all the heads of exemption are independent or alternative or mutually supplementary.
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14.1 Clause (c) of sub-section (2) of section 80P provides for deduction to co-operative societies in clause (a) or clause (b) of section 80P(2) either independently of, or in addition to, all or any of ! ! Degree of deduction of profit and gains is as discussed below.
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Income of co-operative societies engaged in certain specific business activities such as providing banking or credit facilities to its members, cottage industry, marketing of agricultural produce grown by its members, purchase of agriculture implements, seeds etc., for supply to its members, processing agricultural produce of its members without the aid of power is fully deductible.
This deduction shall apply only to a primary agricultural credit society or a primary co-operative agricultural and rural development bank.
Sub-clause (ii) of clause (c) of sub-section Business income of labour co-operative (2) of section 80P provides for deduction to societies engaged in fishing and allied co-operative societies engaged in activities activities and the collective disposal of the ! ] ^ ! labour of its members is deductible if the (b) of sub-section (2) and is not a consumer voting rights are restricted to members co-operative society. The maximum amount who constitute the labour force, the co- of deduction will be rupees fifty thousand. operative credit societies which provide However, up to the assessment year 1998-99, the limit of deduction was rupees twenty thousand in supplying milk, oil seeds, fruits or only. vegetables raised by its members to federal milk co-op. society, government, local The income of a co-operative housing or authority and statutory corporation is fully premises society is subject to a further deduction up to ` 50,000/- u/s. 80P(2)(c). Two views are deductible. possible in this context. Section 80P(2)(c) refers Income of a co-operative society engaged to “profits and gains“ attributable to “such in activities other than or in addition to the activities�. The words such activities are in above mentioned activities, shall qualify reference to the activities specified in clause for a maximum of ` 50,000 deduction (a) and clause (b) of section 80P(2). Clauses (a) in respect of income from such other and (b) refer to business activities therefore by activities. If it is a consumer co-op. society, rule of construction of Ejusdem Generis it can such deduction shall be up to ` 1,00,000. be construed that section 80P(2)(c) refers to Income by way of interest or dividends ! ] ^ ! ] ^ 4! from investments in another co-operative under Income-tax law the words “profits and society is fully deductible. Income from gains“ have a definite connotation and have letting of godowns and warehouses for ! storage, processing etc., of commodities and gains of business to which provisions of is fully deductible. Besides, income from section 28 to section 44D of Income-tax, 1961 house property and interest on securities are applicable. Further section 80P (3) refers to is deductible fully in the case of certain co- deductions u/s 80HH, 80HHA, 80HHB, 80HHC, operative societies if the gross total income 80I, 80G under chapter VI A being available to does not exceed ` 20,000. the societies referred to clauses (a), (b) and (c).
SS-VI-79
The Chamber's Journal April 2013
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