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2012 (8) TMI 119 - AT - Income TaxDenial of claim of deduction u/s 80P - Held that:- Section 80P was amended by the Finance Act 2006, with effect from April 1, 2007, introducing subsection (4), which laid down specifically that the provisions of section 80P will not apply to any cooperative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. Accordingly, deduction under section 80P was no more available to any regional rural bank from the assessment year 2007-08 onwards - Circular No. 319, dated January 1, 1982, deeming any regional rural bank to be co-operative society stands withdrawn for application with effect from the assessment year 2007-08 - The legislative intent for insertion of sub Section (4) as per the speech of Hon'ble Union Finance Minister on 28.2.2006 clearly shows that Coop. Banks were excluded from the benefit of Section 80P on the plea that like any other bank, the Coop. Banks are also lending institution and should pay tax on their profits. Accordingly, Coop. Banks were excluded from the scope of Section 80P. The assessee is neither PACs nor PCARDB and hence not eligible for deduction U/S 80P as the object of the assessee and the range of the activities is not confined to taluk but is extended to entire district of Bhopal & Vidisha - Primary object of principal business of PACS is to finance for agricultural purposes or purposes connected with agricultural activities. The primary object as well as activities of assesse are not confined to agricultural purposes but other purposes also - against assessee.
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