2018 (5) TMI 1600

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....Court in the case of Citizen Co-operative Society Ltd vs ACIT, in CIVIL APPEAL NO. 10245 OF 2017(ARISING OUT OF SLP (C) NO. 20044 OF 2015) Order dated August 8, 2017. Therefore, the Bench proceeded to hear and dispose of the same considering the material available on record and submissions of ld D.R. 3. Ground Nos.1 & 6 are general in nature and, hence requires no separate adjudication by us. 4. Ground Nos.2 & 3 are as under: "2. For that ld PCIT is highly unjustified in passing order u/s.263 treating the assessment order u/s.143(3) of the I.T.Act, dated 22.11.2013 passed by the Assessing Officer as erroneous in so fr as it is prejudicial to the interest of the revenue on the arbitrary grounds and the order is liable to be set aside. ....

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....cheque accepting deposits and advancing loans etc. thus it includes providing of credit facility. A Society may not be a banker in the wide sense yet he may be providing credit facility which is a part of banking business. The expression providing credit facility does takes its color from the activity of banking. In order that banking or providing of credit facility may constitute a business, it is necessary that these activities must be chief source of income. The similar view has given by Hon'ble Madras High Court in Rodier Mill Employees Co.op. Stores vs CIT (1982) reported in 135 ITR 355 (Mad) and Hon'ble Kerala High Court in Kerala Cooperative Consumers Federation Ltd vs CIT (1988) reported in 170 ITR 455 (Ker) among other rulings. ....

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.....2012 is submitted herewith granted a license to commerce and carry on banking business. From the above, it is apparent that the assessee is carrying on business of banking or providing credit facilities to its members and is eligible for deduction u/s.80P(2)(a)(i) of the I.T.Act, 1961. TDS has been deducted under TAN RCT00305E on the amount paid during the year and accordingly TDS return was filed vide receipt No. GMVXBMBG. Copy of the status of TDS statement is enclosed. 6. I have gone through the submission and record. It is observed that the assessee is a bank as it is noticed from the record from 3cd and the license granted to it. The column No.8(a) of Form 3CD clearly states about the nature of business as "banking". It is als....

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....and says that selling goods on credit does not become business of providing credit facilities. 6.4 With effect from 1.4.2007 the section 80P has been amended and sub-section (4) is inserted whereby no Cooperative Bank is eligible to claim the deduction under section 80P other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. 7. And as is observed, the assessee is a cooperative bank, the exclusion clause (4) of section 80P is operative in the assessee's case and hence claim u/s. 80P(2)(a)(i) is incorrect and requires to be withdrawn. 8. It is also seen that AO had neither considered the exclusion clause (4) of section 80P nor made any enquiry as to members and nonmembers & ....