TaxTMI 
TaxTMI 
2018 (10) TMI 1690
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....usiness of accepting deposits and advancing loans to its members which are the primary activities of any bank whether co-operative or otherwise. 3 Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in granting above relief to the assessee by relying upon the decision of Hon'ble High Court in the case of Quepem Urban Cooperative Credit Society Ltd and the decision of the ITAT 'C' Bench Mumbai in the assessee's own case for the A.Y. 2012-13 without appreciating the fact that both the decisions were not accepted by the revenue on merits and SLP was filed by the revenue against the judgment of Bombay High Court. 4 The order of the CIT(A) may be vacated and that of the AO may be restored." 3. The brief facts of the case are that the assessee filed its return of income on 29.03.2016 declaring total income to the tune of Rs. 39,900/- after claiming the deduction u/s 80P(2)(a)(i) of the I.T. Act of Rs. 68,21,517/-. The return was selected for scrutiny under CASS. Statutory notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The sh....
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....y considered the appellant's submissions, observations of the AO in the assessment order and the facts of the case. The appellant is a Primary Co-operative Credit Society accepting deposits and providing credit facilities from and members only. The issue involved in this case is whether the appellant is a Co-operative Bank or not because if the appellant is held to be a Co-operative Bank as has been held by the AO, then deduction allowed u/s. SOP(J) is taken away in terms of section 80P(4) of the I.T. Act, otherwise, if the appellant is a Co-operative Credit Society providing credit facilities to its members, then whole of the profits earned by the appellant Society are allowed to the society as deduction u/s. 80P(2)(a)(i)l fix claimed by the appellant. The main reason why the AO had disallowed deduction to the appellant h that according to the AO though the appellant is not a Co-operative Bank but as the appellant had accepted deposits and provided credit facilities to Us members, the same was akin to the primary activity of any bank. The fact that the appellant accepts deposits and provide credit facilities members only, has not been disputed by the AO. Under these circumstan....
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.... is Banking. Section 5b of the Banking Regulation Act defines banking to mean accepting of deposits for the purpose of lending of investment^ of deposit of money from the which: repayable on demand or otherwise. The impugned order juxtaposes the definition with the finding of fact that the appellant did deal with non members in a few cases by seeing deposits. this read with Bye taw 43 leads to conclusion that it is carrying on banking business. This fact of accepting deposits from people who are not members has been so recorded by she C1T(A) in his order dated 15 July, 2014. Before the Tribunal Also She appellant did tint dispute the fad that in a Jew cases they have dealt with non members. However, so far as accepting deposits from non-members is concerned it is submitted that the Bye-law 43 only permits the society to accept deposits from its members, it is submitted that Bye laws 43 does not permit receipt of deposits from persons other than members, the word "any person" is a gloss added the impugned order as it is not found in Bye law 43. Il is undisputed that the transactions with non-members. On the above basis it cannot be concluded that the appellant's principal busine....
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....words of different and distinct significance and the membership w only open so society aid not to a co-operative society. As rightly pointed out on behalf of the appellant the word society ax referred to bye law 9(d) would include the co-operative society. This is TO as the definition of a society under the Co-operative Act is co-operative society registered under the Cooperative Act. Besides She qualifying condition 3 for being considered as a primary Cooperative bunk 14- that the bye laws must not permit admission of any other cooperative society. This is a mandatory condition i.e. the bye laws must specifically prohibit admission of arty other cooperative society to its member ship. The Revenue has not been able to show any such prohibition in the bye laws of the appellant. Thus even the aforesaid qualifying condition (3) for being considered us a primary cooperative bank is not satisfied Thu the three conditions tis provided under Section 5(CVV) of the Banking Regulation Act. 1949 are to be satisfied cumulatively and except condition are not satisfied. Ergo two qualifying conditions are not satisfied. Ergo, appellant cannot be considered to be a co-operative bank for the purpos....