Co-operative credit society deduction under section 80P upheld where member lending did not make it a co-operative bank.

A co-operative credit society was held eligible for deduction under section 80P(2)(a)(i) because it was not treated as a co-operative bank. Lending activities with members did not, by themselves, convert the society into a co-operative bank, following the jurisdictional High Court view and the Tribunal's decision in the assessee's earlier year. The restriction in section 80P(4) therefore did not apply to deny the deduction claimed under section 80P(2)(a)(i).

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Issues: Whether the assessee, a co-operative credit society, was entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961, notwithstanding the Revenue's objection based on section 80P(4).

Analysis: The assessee was treated as a co-operative credit society and not as a co-operative bank. The issue was held to be covered by the Tribunal's decision in the assessee's own case for the earlier assessment year, following the jurisdictional High Court's view that a co-operative credit society carrying on lending activities with its members does not become a co-operative bank merely because of such activities. On that basis, the restriction in section 80P(4) was held not to deny the deduction claimed under section 80P(2)(a)(i).

Conclusion: The assessee was entitled to deduction under section 80P(2)(a)(i), and the Revenue's challenge failed.

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