In Brief
The Supreme Court determined whether primary agricultural credit societies registered under state co-operative laws are entitled to deductions under Section 80P(2)(a)(i) of the Income-Tax Act, 1961. The Court held that Section 80P is a benevolent provision favouring co-operative societies and must be read liberally. Section 80P(4), which excludes co-operative banks, applies only to entities holding RBI banking licenses. Since the appellant societies were not licensed co-operative banks, they qualify for deductions on income from providing credit facilities to members—including loans unrelated to agriculture—provided the income is attributable to member lending and not to non-member transactions.
The lawyer headnote and full judgment text are available to registered users.