2017 (4) TMI 1249

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....rcumstances of the case and in law, the learned CIT(A) has erred in directing the allow deductions u/s 80P(2)(a)(i) of the Act to the assessee in respect of interest income of Rs. 41,38,991/- and u/s 80P(2)(d) of the Act in respect of dividend income of Rs. 1,38,720/- derived by the assessee from its shareholding in other co-operative societies, despite the fact that the assessee carries on banking and other business activities in the name of the credit co-operative society. ii. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in allowing the abovementioned deductions without considering insertion of sec. 80P(4) and sub-clause (viia) to section 2(24) vide Finance Act, 2006 w.e.f. 01.04.2007. iii. On th....

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....ugned assessment year, the major receipt of Rs. 1,21,31,216/- by way of 'interest on loans and advances' to members on the income side. As per the AO, it demonstrates that the only activity being carried out by JKSPM is accepting deposits and extending loan facilities. The AO found that the same is supported by Clause (a), (b) and (d) of the objects of the assessee's Bye laws. The AO further found that the JKSPM has been maintaining a running account with Mumbai District Central Co-operative Bank utilising cash credit facilities. Besides taking a term loan, it has also made investments in shares and FD with Mumbai District Central Co-operative Bank which may be required for availing loan facility etc. In reply, the assessee has submitted be....

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....the relevant material on record. We find that a similar issue arose before the Hon'ble Bombay High Court in the case of Quepem Urban Co-operative Credit Society (supra). In the above case, the assessee was a Cooperative Society registered under the Goa Co-operative Societies Act and it was engaged in providing credit facilities to its members. The income so earned from the said activity, was claimed as deduction u/s 80P(2)(a)(i) of the Act. The AO disallowed the assessee's claim on the ground that the assessee was a primary Co-operative Bank and, therefore, hit by the provisions of section 80P(4) which excluded the benefit of section 80P. However, the Commissioner (Appeals) allowed the assessee's claim holding that it was not a Cooperat....