2015 (6) TMI 1113

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....ction u/s. 80P(2)(a)(i) of the Act stood decided by the Hon'ble jurisdictional High Court in the case of CIT v. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Bagalkot in ITA No.5006/2013 dated 5.2.2014. According to him, the bye laws of the assessee society did not prohibit any other cooperative society from becoming a member. 03. Per contra, the ld. DR submitted that the assessee was a cooperative bank falling within the definition of Banking Regulation Act, 1949 and therefore the prohibition prescribed in section 80P(4) clearly applied to it. 04. We have perused the orders and also heard the rival contentions. The claim of the assessee for deduction u/s. 80P(2)(a)(i) was disallowed by the AO for the reason that the assessee fe....

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....der passed by the Revisional Authority was set-aside. 6. Aggrieved by the said order, the Revenue has preferred this appeal. 7. The only substantial question of law which arises for our consideration in this appeal is:- In the facts and circumstances of this case, whether the Revisional Authority was justified in invoking his power under Section 263 of the Act without the foundational fact of assessee being Co-operative bank was not there? 8. In the assessment order, the Assessing authority has clearly stated that the assessee is a Cooperative society and has not obtained any banking license. The business of the assessee is to provide credit facilities to its members. Since the assessee cannot carry on any banking business, the inte....

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.... long-term credit for agricultural and rural development activities." Therefore, the intention of the legislature is clear. If a Co-operative Bank is exclusively carrying on banking business, then the income derived from the said business cannot be deducted in computing the total income of the assessee. The said income is liable for tax. A Co-operative bank as defined under the Banking Regulation Act includes the primary agricultural credit society or a primary co-operative agricultural and rural development bank. The Legislature did not want to deny the said benefits to a primary agricultural credit society or a primary co-operative agricultural and rural development bank. They did not want to extend the said benefit to a Cooperative bank....