TaxTMI 
TaxTMI 
2014 (8) TMI 1238
X X X X Extracts X X X X
X X X X Extracts X X X X
....(2)(d) on dividend income amounting to Rs. 5,000/- & Rs. 6,34,700/- from KRISCO & APEX Bank. The assessee while filing return along with computation of total income has fully claimed deduction u/s 80P(2)(a)(i) amounting to Rs. 60,85,941/- & these 3 items were not shown separately. These 3 items were allowable while calculating to total income. Kindly see P & L account for this purpose. 3. The assessee's case is covered u/s 80P(2)(a)(i) as per decision in case of DCIT Vs. Jayalakshmi Mahila Vividodeshagala Souharda Sahakari Ltd. ITAT Panaji Bench reported in (2012) 137 ITD 163. 4. The Ld. CIT(A) Jodhpur has erred in not allowing deduction u/s 80P(2)(c)(ii) of the I.T. Act, 1961 amounting to Rs. 50,000/- 5. The appellant craves leave to add, alter, amend or delete the grounds on or before the date of hearing." 2 The main grievance of the assessee in this appeal relates to the reduction u/s 80P(2)(a)(i) of the I.T. Act, 1961 (hereinafter referred to as 'the Act' in short). 3. Facts relating to the case, in brief, are that the assessee filed return of income declaring total income of Rs. 60,85,940/- on 30/09/2009. The deduction of the entire income was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....Y. 2004-05 & 2005-06, confirmed that the assessee society was a bank engaged in banking activities and there was a difference of opinion on the point that whether the assessee was a 'cooperative bank' or 'primary agricultural credit society' or 'primary cooperative agricultural and rural development bank'. The Assessing Officer observed that the assessee could be termed as a cooperative bank because of the following facts:- "(i) The bank is advancing loan for non-agricultural purposes also i.e. for housing non-farming and miscellaneous like dairy, drainage, fencing etc. (ii) Besides this, loans are also advanced to staff/employees of the bank who are non members of the society. (iii) The area of operation of the assessee is not confined to a 'taluk' (tehsil) but extended to a number of 'taluks' (tehsils), (iv) The bank is also accepting deposits from non-members (Annexure'G' forms part of this order), (v) The bye-laws of this cooperative bank permit 'cooperative agricultural farmings' and 'agricultural credit providing cooperative societies as well as 'Krishi Upaj Mandi Samities' of its area of operation to become its member. 5. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urpose (dairy, drainage, fencing) amounting to Rs. 213.77 lacs, for non-agricultural purposes Rs. 40.09 lacs, for rural housing purposes Rs. 101.38 lacs. All these facts confirmed that the assessee society is not advancing loans for agricultural purpose only and thus, it does not fall under the definition of "primary agricultural credit society" but it is a Co-operative bank doing banking business. The appellant bank has also been advancing loan to its staff/ employees who are also not members of the society. It is also pointed out the area of operation of the assessee is not confined to a 'taluk (tehsil) but extended to a number of 'talulks' (tehsil). All the observations of the Assessing Officer remained uncontroverted by the appellant society during the appellate proceeding. 6.3.1. Further it is to be noted that the assessee had failed to clarify whether any other cooperative bank had been admitted as member or not particularly Rajasthan Rajya Sahakari Bhoomi Vikas Bank, Jaipur. From the copies of Bye- laws of the appellant society, annexed with the assessment order as Annexure E', it is seen that the appellant society's objectives include providing loan to its members ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as held as under: "9. We have heard the rival submissions and perused the material on record. The assessee was denied the deduction under section 80P (2)(a)(i) of the Act for the reason of introduction of sub-section (4) to section 80P. Section 80P(4) reads as under: - The provisions of this section shall not apply in relation to any cooperative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank." Explanation-for the purpose of this sub-section - "Co-operative bank" and "primary agricultural society" shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (10 of 1949): "Primary Co-operative Agricultural and Rural Development Bank" means a society having its area of operation confined to a taluk and the principal object of which is to provide for long term credit for agricultural and rural development activities." 9.1 The above sub-section 4 of section 80P provides that deduction under the said section shall not be available to any Co-operative bank other than a primary agricultural credit society or rural development bank. For....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l functioning of the bank Part V Part V of the Banking Regulation Act is applicable to co-operative banks Part V of the Banking Regulation Act is not applicable to cooperative society. Use of words The word 'bank', 'banker', 'banking' can be used by a cooperative bank. The word 'bank', 'banker', 'banking' cannot be used by a cooperative society 9.3 If the intention of the legislature was not to grant deduction under section 80P(2)(a)(i) to co-operative societies carrying on the business of providing credit facilities to its members, then this section would have been deleted. The new proviso to section 80P(4) which is brought into statute is applicable only to co-operative banks and not to credit cooperative societies. The intention of the legislature of brining in cooperative banks into the taxation structure was mainly to bring in par with commercial banks. Since the assessee is a co-operative society and not a cooperative bank, the provisions of section 80P(4) will not have application in the assessee's case and therefore, it is entitled to deduction under section 80P(2)(a)(i) of the Act. Hence, we are....