TaxTMI 
TaxTMI 
2024 (1) TMI 1273
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....essment Year (AY) 2013-14. 2. The sole issue raised in the instant appeal is the maintainability or otherwise of the assessee's, a society registered as a primary agricultural credit society (PACS) (under the Kerala Co-operative Societies Act, 1969 - Kerala Act) claim for deduction, made for the entirety of it's business profit at Rs.48.19 lakhs, u/s. 80P(1) r/w s. 80P(2)(a)(i) of the Act, denied in view of section 80P(4), i.e., as it stands after its amendment by Finance Act, 2006, w.e.f. 01.04.2007. 3. The basis for the said denial by the Revenue, as a perusal of their orders by the assessing and first appellate authority, shows, is as under: (a) the lending to the agricultural sector being at a negligible 0.38% of it's tot....
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.... than those specified in clause (a) or clause (b) (either independently of, or in addition to, all or any of the activities so specified), so much of its profits and gains attributable to such activities as does not exceed,- (i) where such co-operative society is a consumers' co-operative society, one hundred thousand rupees; and (ii) in any other case, fifty thousand rupees. Explanation.-In this clause, "consumers' co-operative society" means a society for the benefit of the consumers; (d) .... (f). Explanation.-For the purposes of this section, an "urban consumers' co-operative society" means a society for the benefit of the consumers within the limits of a municipal cor....
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.... construed as references to a co-operative bank, (ii) references to 'commencement of this Act' shall be construed as references to commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965); (b) in section 2, the words and figures 'the Companies Act, 1956 (1 of 1956), and' shall be omitted; (c) in section 5,- (i) after clause (cc), the following clauses shall be inserted namely:- (cci)...(cciii) (cciv) 'primary agricultural credit society' means a co-operative society,- [[ (1) the primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or for purposes....
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....in the subject or context,- (a) "approved securities" means ... (b) "banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise;' The AO has given a clear finding at para 4 of his order, not rebutted at any stage, that the assessee is providing the following facilities: 1) providing various kinds of loans (Gold loan, mortgage loan, etc.); 2) accepting deposits from members as well as non-members; 3) maintaining saving bank account, current accounts, day deposit, etc.; and 4) providing cheque facility (which would include arrangements for with....
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....istered under the Kerala Act, is a 'co-operative bank', a term which again stands defined u/s. 80-P with reference to BRA, as under: "5(cci) "Co-operative Bank" means a state co-operative bank, a central co-operative bank and a primary co-operative bank. (ccv) "primary co-operative bank" means a co-operative society, other than a primary agricultural credit society,- (1) the primary object or principal business of which is the transaction of banking business; (2) the paid-up share capital and reserves of which are not less than one lakh of rupees; and (3) the bye-laws of which do not permit admission of any other co-operative society as a member: We refer only to the definition of a 'primary c....
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....ed under BRA, as aspect considered in Mohammed Usman (supra). As explained in Sivapuram SCB Ltd. & Ors (supra), what is therefore relevant is that an assessee is entitled to be licenced under BRA. And that, being unlicenced would only imply it operating outside RBI's regulatory control, but not alter the nature of income arising. The assessee, sure, has not applied therefor, but that is on the notion of it being a PACS, which claim it does not satisfy on facts. One cannot, after all, take advantage of his wrong to the prejudice of the other side. Why, in Mavilayi SCB Ltd. (supra), as the Tribunal notes, the fact of cooperative societies undertaking banking business without obtaining licence from RBI, i.e., unlicenced, was emphasized by the ....