KOCHI:
The Cochin Chamber of Commerce and Industry has welcomed the Supreme Court verdict in favour of more than 1670 primary agricultural co-operative societies in Kerala which are facing income tax eligibility.
The Supreme Court has quashed the judgment of the Kerala High Court order dated 19.3.2019 that income earned on loans for non-agricultural purposes is not eligible for deduction under Section 80 (p). Maavilai Service Cooperative Bank Limited has approached the Supreme Court against the High Court judgment.
In its judgment, the apex court held that loans to co-operative societies registered as Primary Agricultural Credit Societies (PACS) to their non-agricultural members are eligible for deductions under Section 80 (p) of the Income Tax Act.The Supreme Court has rejected the Revenue Department’s contention that primary agricultural co-operative societies are not eligible for deduction under Section 80 (p) for Yield on non-agricultural credit.
P.M. Veeramani, Vice President, Cochin Chamber of Commerce and Industries, said that the verdict will save the co – operatives in Kerala from incurring huge liabilities of over Rs.5500 cr. He said that this verdict has given a new impetus to the economy of Kerala in the context of Covid- 19. Disputes since 2007 have now been resolved, he added.
