Co-operative credit society eligibility for section 80P deduction turns on whether it is actually a co-operative bank.

A co-operative credit society was held not to fall within the section 80P(4) exclusion because it was not a co-operative bank, lacking a banking licence and not shown to be a State Co-operative Bank, Central Co-operative Bank, or Primary Co-operative Bank. Merely providing credit facilities to members and earning interest and dividend did not alter its character. On that basis, the society remained eligible for deduction under section 80P, and the Revenue's challenge failed.

---

---

Issues: Whether a co-operative credit society was entitled to deduction under section 80P of the Income-tax Act, 1961, or whether it was hit by the exclusion in section 80P(4) as a co-operative bank.

Analysis: The deduction under section 80P is not available to a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. The decisive question was whether the assessee could be treated as a co-operative bank. The materials on record showed that the assessee was a co-operative credit society, did not hold a banking licence, and was not shown to be a State Co-operative Bank, Central Co-operative Bank, or Primary Co-operative Bank within the meaning adopted for section 80P(4). Merely providing credit facilities to members and earning interest and dividend did not convert the society into a bank.

Conclusion: The assessee was not a co-operative bank for the purpose of section 80P(4) and was entitled to deduction under section 80P. The Revenue's challenge failed.

---