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2011 (4) TMI 1222 - AT - Income Tax
Deduction u/s 80P(2)(a)(i) of the Act - Whether the CIT(A) is justified in directing the AO to grant deduction u/s 80-P(2)(a)(i) of the Act – Held that:- The provisions of section 80P(4) has got its application only to cooperative banks - Section 80P(4) does not define the word “cooperative society” - The existing sub-section 80P(2)(a)(i) shall be applicable to a cooperative society carrying on credit facility to its members - This view is clarified by Central Board of Direct Tax vide its clarification No.133/06/2007-TPL dated 9th May, 2007 - The new proviso to section 80P(4) which is brought into statute is applicable only to cooperative banks and not to credit cooperative societies - The intention of the legislature of bringing in cooperative banks into the taxation structure was mainly to bring in par with commercial banks - Since the assessee is a cooperative society and not a cooperative bank, the provisions of section 80P(4) will not have application and it is entitled to deduction u/s 80P(2)(a)(i) of the Act – thus, the order of CIT(A) is correct and upheld – Decided against Revenue.