TaxTMI 
TaxTMI 
2016 (12) TMI 1537
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....nces of the case the Ld.CIT(A) ought to have upheld the order of the Assessing Officer. It is therefore prayed that the order of the learned CIT(Appeals) may be set aside and that of the A.O. be restored to the above extent. 3. Briefly stated facts of the case are that the assessee is a Credit Co-op. Society engaged in the business of providing credit facility to its members. E-return was filed on 31.08.2010 showing total income at Rs.NIL. Case was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued followed by notice u/s 142(1) of the Act along with detailed questionnaire which were duly served on the assessee on 9.7.2012. Necessary information were called for as per the questionnaire and the same were duly submitted by the assessee. Ld. Assessing Officer observed that assessee has claimed deduction u/s 80P(2)(a)(i) of the Act at Rs. 65,09,757/-. Ld. Assessing Officer was of the view that assessee is engaged in providing credit facilities to its members and doing banking business and provisions of sub-sec.(4) of section 80P of the Act inserted by Finance Act, 2006 from Asst. Year 2007-08 applies to the assessee and no deduction can be claimed u/s 80P(20(....
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....ation to members only by accepting deposits only from members admitted from the jurisdictional area as per by laws of the society. So activity and transaction of the society are not of banking business as defined in section 5(b) of banking regulation act. The definition of banking is as under. "Banking means the accepting, for the purpose of lending or investment, of deposits of money from the public repayable on demand or other wise and withdrawal by cheque draft order or otherwise " The reading of definition of banking clarify that the main content of banking business is accepting deposits from public and as credit societies cannot accept deposits from public. So it cannot be considered as banks. Thus Co op credit societies is not primary co op bank as per part V of Banking Regulation Act 1949. In view of the above, co op credit society is none out of central co op bank, state co op bank or primary co op bank. So it is not a co op bank as defined in part V of banking regulation act. We further point out the facts that we are different from banks as under. 1. Co. Op. Cr. Soc. cannot accept deposit from public as discussed above. 2. Co. Op. Cr. Soc. cannot be member of ....
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.... it is apparent that none of the aims and objects allows the assessee co operative society to accept deposits of money from public for the purpose of lending or investment In our opinion until and unless that condition is satisfied, it cannot be said that the prime object or principal business of the assessee is banking business. Therefore, the assessee will not comply with the first condition as laid down in the definition as given u/s. 5(ccv) of the Banking Regulation act, 1959 for becoming "primary co operative bank". The assessee, therefore, cannot be regarded to be a primary co operative bank and is consequence thereof, it cannot be a co operative bank as defined under part V of the Banking Regulation Act 1949. Accordingly, in our opinion the provisions of section 80P(4) read with explanation there under will not be applicable in the case of the assessee. The assessee, therefore, in our opinion will be entitled for the deduction u/s.80p(2)(a)(i). We accordingly confirm the order of CIT(A) allowing to the assessee." In view of the above, we humbly submits that claim of deduction u/s. SOP be allowed to us as co op credit society. In view of above, we pray for relief for allo....
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.... from salaried persons of SBI was not engaged in the business of banking except to give facilities to those who were employees of SBI and surplus funds in form of deposits were made with SBI giving rise to interest income. The only issue which arose in this appeal was "whether the interest derived by depositing surplus funds with bank by a credit co-op. society are eligible for deduction u/s 80P(2)(a)(ia) of the Act" and Hon. Jurisdictional High Court decided the issue in favour of Revenue. However, the facts in the appeal before us are quite different because the issue before us is "whether the assessee, a credit co-op. society falls under the category of bank as envisaged under the provisions of section 80P(4) of the Act." The facts before us being different from the facts adjudicated by Hon. Jurisdictional High Court in the case of SBI vs. CIT, the same cannot be applied in the case of respondent (assessee). 10. We further observe that when the issue came up before ld. CIT(A), the same was decided in favour of assessee by ld. CIT(A) by following the decision of the Tribunal in the case of Jafari Momin Vikas Co-op. Credit Society vs. ITO, Patan-2 in ITA No.1491/Ahd/2012 by obser....
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....it is not excluded from the benefit of deduction u/s 80P(2)(a)(i) of the IT Act as it does not fall under the exceptions as provided u/s 80P(4). I have also noted the decision of Hon'ble ITAT Mumbai Bench in the case of Salgaon Sanmitra Sahakari Pathped Ltd, 12 taxmann.com 246 ; where both the CIT (Appeals) and the ITAT have held that the corporative credit society in that case was not a co-operative bank. I also respectfully agree with the decision of the ITAT Bangalore "B" Bench in the case of ACIT Vs M/s. Bangalore Commercial Transport Credit Co-operative Society Ltd in ITA No.l069/Bang/2010 for AY 2007-08 dated 08/04/2011 which has decided the issue in favour of the appellant. The Hon'ble Jurisdictional ITAT, Ahmedabad 'B' Bench in ITA No.l491/Ahd/2012 A.Y.2009-10 in the case of M/s. Jafari Momin Vikas Co-Op Credit Society Ltd vs. ITO, Patan -2, relied upon by the appellant has on identical facts has held that the provisions of section 80P(4) of the I. T. Act, 1961 are not applicable to Co-Operative Credit Society and Co-Operative Society is entitled deduction u/s 80P(2)(a)(i) of the Act if it is not allowed to do business of banking. Following the decision, I d....