AI Drafter 
TaxTMI 
TaxTMI 
2021 (4) TMI 635
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....), dated 06.11.2017 for A.Y. 2015-16. The revenue has assailed the impugned order on the following grounds of appeal before us: "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in by granting relief of Rs. 73,91,380/- by deleting the addition made by the Assessing Officer". 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate the fact that the deduction allowable earlier u/s.SOP of the Act in the case of Co-operative societies engaged in the banking has been withdrawn w.e.f. 2007-08 by Section 80P(4) except in the case of primary Agricultural Credit Society or a primary Co-operative Agricultural and Rural Development Bank." ....
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.... loans to its members. It was observed by the A.O that the assessee had claimed deduction under Sec. 80P(2) of Rs. 1,64,84,079/-. However, the A.O was not persuaded to subscribe to the aforesaid claim of deduction raised by the assessee under Sec.80P of the Act. The A.O held a conviction that the assessee being a primary co-operative bank was hit by the provisions of Sec. 80P(4), and thus, was not eligible for claim of deduction under Sec. 80P(2)(a)(i). The contention of the assessee that it was a co-operative credit society providing banking/credit facilities only to its members and was not a co-operative bank providing banking/credit facility to the public at large did not find favour with the A.O. It was observed by the A.O that deductio....
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....the principal business of the co-operative society is the transaction of banking business; (ii) the paid-up share capital and reserves of the cooperative society are not less than one lac of rupees; and (iii) the bye laws of the co-operative society did not permitted admission of any other co-operative society as a member, therefore, it clearly fell within the category of a primary co-operative bank. In the backdrop of his aforesaid deliberations the A.O was of the view that the assessee being a primary cooperative bank would thus be hit by the provisions of Sec. 80P(4) of the Act and w.e.f A.Y 2008-09 would not be eligible for claim of deduction under the said section. On the basis of his aforesaid observations the A.O declined the claim o....
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....therwise, and withdrawal by cheque, draft, order or otherwise. In the backdrop of his aforesaid view the CIT(A) held a conviction that as in the case of assessee co-operative society the acceptance and lending of money was only from the members and not from the public thus, it could safely be concluded that the principal business or primary objective of the assessee co-operative credit society was not the business of banking. Further, it was observed by the CIT(A) that in the assessee‟s own case for A.Y 2012-13, his predecessor had vide an order dated 27.05.2016 held that as the assessee was not a co-operative bank, it was, thus, eligible for claim of deduction under Sec. 80P(2)(a)(i) of the Act. It was, further, observed by the CI....
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....ce Act, 2006 w.e.f 01.04.2007. Our said view is fortified by the fact that it is absolutely mandatory for a co-operative society to seek a licence from the Reserve Bank of India to form and operate as a co-operative bank. Further, a perusal of Circular No. 312 of the Reserve Bank of India reveals the process involved for conversion of a co-operative society into a primary co-operative bank. Admittedly, in the case before us as the assessee being a co-operative credit society is neither authorized nor had undertaken any of the banking business activities as are carried out by a primary co-operative bank, but had only provided financial assistance/credit to its members, therefore, it can safely be concluded that it cannot be held to be a c....