Co-operative credit society deduction under section 80P upheld; exclusion for co-operative banks does not apply.

A co-operative credit society that confined its activities to accepting deposits from and lending to members, without offering banking facilities to the general public, remained entitled to deduction under section 80P(2)(a)(i). Section 80P(4) was held to exclude only co-operative banks, not a co-operative credit society that is not a co-operative bank. The reference to section 56(c)(ccv) of the Banking Regulation Act, 1949 did not alter that position on the facts found. The Revenue's objection failed, and the deduction claimed by the assessee was upheld.

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Issues: Whether a co-operative credit society, not being a co-operative bank, is entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961 notwithstanding section 80P(4).

Analysis: The assessee was confined to accepting deposits from and lending to its members and did not provide banking facilities to the general public. The exclusion in section 80P(4) applies only to co-operative banks and not to a co-operative credit society which is not a co-operative bank. The statutory reference to section 56(c)(ccv) of the Banking Regulation Act, 1949 did not alter this position on the facts found by the lower authority.

Conclusion: The assessee was entitled to deduction under section 80P(2)(a)(i), and the Revenue's objection based on section 80P(4) failed.

Final Conclusion: The appeal was dismissed and the allowance of deduction to the assessee was upheld.

Ratio Decidendi: Section 80P(4) excludes only co-operative banks and does not deny deduction under section 80P(2)(a)(i) to a co-operative credit society that is not a co-operative bank.

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