TMI Blog2014 (8) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... not possible to restrict the scope of the business to the definition of 'Banking' under section 5(b) of the Banking Regulation Act - Even otherwise, a banking company including a co-operative society, may accept deposits for the purpose of lending or investment - The definition does not stipulate that investment has to be only to the extent provided either by the Gujarat Cooperative Societies Act or the Banking Regulation Act - when investments are made in securities, which are a permissible mode of investment, income arising therefrom would be attributable to the business of banking and the assessee would be eligible for deduction in terms of section 80P(2)(a)(i) – Decided in favour of Assessee. - Special Civil Application No. 1630 of 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, the amount of ₹ 6,96,788/- was held as taxable. 3. Feeling aggrieved and dissatisfied with the order passed by the AO, denying the exemption under Section 80P(2)(a)(i) of the Act and including the aforesaid amount of ₹ 6,96,778/- as taxable income of the petitioner-assessee, the petitioner preferred the revision before the Respondent No.2 under Section 264 of the I.T. Act and by the impugned order, the Revisional Authority dismissed the Revision application, which has given rise to the present Special Civil Application. 4. Shri. Manish J. Shah, learned Advocate appearing on behalf of the petitioner, has submitted that, as such, the controversy / issue involved in the present petition is now not res integra in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ODA PEOPLE S COOPERATIVE BANK LTD. . In the aforesaid decisions, while considering somewhat similar investment and the interest earned on such investment, the Hon ble Supreme Court as well as the Division Bench of this Court has held that the assessee shall be entitled to the exemption under Section 80P(2)(a)(i) of the Act. It is, further, held in the aforesaid decisions that, if, the investments are made in the security, which is permissible mode of investment, the assessee shall be entitled to the special deduction. In BARODA PEOPLE S COOPERATIVE BANK LTD. (Supra), the Division Bench of this Court has held as under; Section 80P(2)(a)(i) permits a Cooperative Society engaged in carrying on the business of banking or providing credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether any particular category of income of a Cooperative Society is exempt from tax what has to be seen is whether the income falls within any of the several heads because each would be a separate and distinct head and merely because conditions for deduction under one head are not satisfied that does not necessarily mean that an assessee is not entitled to deduction under another head wherein conditions stand fulfilled. Hence the contention on behalf of the revenue that the first activity namely business of banking has to take colour from the second activity namely providing credit facilities to members does not merit acceptance. Section 80P requires that the profits and gains of business must be attributable to any one or more of the speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not stipulate that investment has to be only to the extent provided either by the Gujarat Cooperative Societies Act or the Banking Regulation Act. Hence when investments are made in securities, which are a permissible mode of investment, either under the Banking Regulation Act or the Gujarat Co-operative Societies Act read with the Indian Trusts Act income arising therefrom would be attributable to the business of banking and the assessee would be eligible for deduction in terms of section 80P(2)(a)(i). 7. In view of the ratio laid down by the Hon ble Apex Court as well as by this Court in the aforesaid decisions, present petition is ALLOWED. The impugned order of the assessment, to the extent it disallows the claim made by the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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