2016 (11) TMI 1462

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....ombinedly and disposed off in this consolidated order. Appeal wise adjudication is given in the following paras of this order. 2. Since, the grounds raised by the Revenue in both the years are identical, therefore, for the sake of reference and for adjudication purpose, the grounds raised in the appeal for the AY 2011-12 are extracted as under:- "1. On the facts and circumstances of the case and in law, the Ld CIT (A) erred in holding that interest earned from surplus fund parked in FDs with other cooperative banks was entitled to claim exemption/deduction u/s 80P(2)(a)(i) of the Act in respect of such income. 2. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in holding that such inco....

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....he impugned order. Further, Ld Counsel also relied on the citations relied upon by the CIT (A)'s vide para 7 of his order. For the sake of completeness of this order, the said prara 5.3 of the impugned order is extracted as under: "7. From the facts of the instant case, it is quite clear that the appellant has limited itself to the members. The appellant has not provided banking facilities either to general public at large or even to the members of the society. Even the bye laws of the appellant does not provide for the banking activities. Therefore, the facts of this case are not identical with any of the case laws relied upon by the AO. On the other hand, the facts of the instant case are identical to the decisions quoted by ....

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....round 1 is allowed in favour of the appellant." 6. Further, we have also perused the judgment of the jurisdictional High Court in the case of Quepem Urban Cooperative Credit Society Ltd vs. ACIT [2015] 377 ITR 272 (Bom), which was relied upon by the Ld Counsel for the assessee for the proposition that such lending activities do not constitute banking activities as the same are transacted between the cooperative society and the members of the society. Since, no public is involved the definition of 'banking' does not cover such activities. As such, there is no Reserve Bank of India's approval for conducting such banking activities in this case. He also relied on the definition of "banking" and read out from the contents of sect....