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2017 (9) TMI 1815 - HC - Income TaxDeduction u/s 80P - actual carrying on of the business activity viz., banking - AO issued show cause notices proposing to refuse deduction on the ground that the appellant was carrying on banking businesses and was accepting deposits from non-members - HELD THAT:- The entitlement of an assessee to the benefit of deduction u/s 80P(2), does not depend upon either the name of the assessee or the objects for which the assessee was established. The entitlement to deduction under the said provision would depend upon the actual carrying on of the business activity viz., banking. The fact that all cooperative banks would necessarily be cooperative societies, cannot lead to the presumption that all cooperative societies are also cooperative banks. There are different types of cooperative societies, many of whom may not be transacting any banking business. Let us take for instance an agricultural society. They may be indulging in the buying and selling of agricultural produce or seeds. In a way, the same could also be termed as a commercial or banking activity. But the same would not make such societies banks within the meaning of the Banking Regulations Act, 1949. The place where the Tribunal went wrong was that without reference to a single transaction that the appellant had with any non-member, the Tribunal upheld the findings of the Assessing Officer merely on the basis of the name of the appellant and one of the objects clause in the Bye-laws of the appellant/Society. Therefore, the finding of the Tribunal is obviously perverse and such a finding could not have been recorded on the basis of the material available on record. Hence, the questions of law are to be answered in favour of the appellant/assessee.
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