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2014 (3) TMI 293 - AT - Income TaxDisallowance u/s 80P(2)(a)(i) of the Act – Co-operative society - Whether the Assessee is a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank – Held that:- Held that:- None of the aims and objects allows the Assessee co-operative society to accept deposits of money from the public for the purpose of lending or investment - until and unless this condition is satisfied, it cannot be said that the prime object or principal business of the Assessee is banking business - the Assessee will not comply with the first condition as laid down in the definition as given u/s 5(ccv) of the Banking Regulation Act, 1949 for becoming primary co-operative bank - if the business of the Assessee is limited only to the members and even if it is a banking business, the Assessee will be entitled for deduction u/s 80P(2)(a)(i). There is no dispute that the paid up share capital and reserves in the case of the Assessee is more than Rs. 1 lac. - Sec. 16 of The Karnataka State Co-operative Societies Act, 1959 permits admission of any other co-operative society as a member - Assessee did not file copy of its bye-laws - neither are the provisions of Sec. 17 of The Karnataka State Co-operative Societies Act, 1959 - Therefore, we are unable to give a finding whether the Assessee complies with the third condition but since the Assessee did not comply with the first condition - the Assesse cannot be regarded to be a primary co- operative bank - Since the Assessee cannot be regarded to be a primary co-operative bank – thus, it cannot be a co-operative bank and therefore the provisions of Sec. 80P(4) are not applicable in the case of the Assessee and Assessee shall be entitled for deduction u/s 80P(2)(a)(i) – thus, the order of the CIT(A) set aside – Decided in favour of Assessee.
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