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2015 (7) TMI 557 - AT - Income TaxIneligiblity for claiming deduction u/s.80P - In view of the nature of activities being carried out by the assessee as listed by the Assessing Officer in his detailed and well reasoned order, there is no doubt that the assessee is carrying on banking activities and is thus in-eligible for claiming deduction u/s.80P - CIT(A) allowed deduction - Held that:- For the purpose of sub-section 4, ‘co-operative bank’ and ‘Primary Agricultural Credit Society’ shall have the meanings assigned to them under the Banking Regulation Act, 1949. We find that the issue whether credit co-operative societies are same as cooperative banks has been dealt in detail by the Bangalore Bench of the Tribunal in the case of ACIT Vs. M/s.Bangalore Commercial Transport Credit Co-operative Society Ltd., (2011 (4) TMI 1222 - ITAT BANGALORE). After comparative analysis of the ‘co-operative banks’ and ‘co-operative societies’ on various parameters, the Tribunal came to the conclusion that the activities of both the organizations and the compliances to be made under various Acts for both the organizations are varied. The sub-section 4 to section 80P is applicable only to co-operative banks and not to credit co-operative societies. Gujarat High Court in the case of CIT Vs. Jafari Momin Vikas Co-op. Credit Society Ltd.,(2014 (2) TMI 28 - GUJARAT HIGH COURT ) wherein the Hon’ble High Court after taking into consideration the CBDT Circular No.133/07 has held that sub-section 4 section 80P will not apply to assessee which is not a co-operative bank The Revenue has tried to establish that the assessee although a credit co-operative society is carrying banking business and is thus not eligible. In our opinion, the assessee is not a co-operative bank. The activities in the nature of accepting deposits, advancing loans etc., carried on by the assessee are confined to its members only and that too in a particular geographical area. The activities of the assessee are not regulated by the RBI or the provisions of the Banking Regulation Act. 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 in favour of assessee.
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