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2017 (8) TMI 658 - AT - Income TaxEligibility for the benefits of u/s 80P(2)(a)(i) - co-operative society engaged in the business of banking or providing credit facilities to its members - Held that:- The claim of the assessee for exemption u/s 80P(2)(a)(i) of the Act is on account of it being engaged in the business of providing credit facilities to its members, and not the business of banking. Factually speaking, find no infirmity in the claim of the assessee inasmuch as there is no case made out by the Assessing Officer that the assessee society has a banking licence to carry on business of banking. The only point made out by the Assessing Officer is that the activities of credit society are akin to a society carrying on banking business. In my considered opinion, it is a complete misnomer on the part of the Assessing Officer to treat the assessee as a co-operative bank within the meaning of Sec. 80P(4) of the Act without establishing that the assessee is a co-operative bank in the eyes of law. Therefore, the CIT(A) made no mistake in allowing the claim of assessee for exemption u/s 80P(2)(a)(i) of the Act and accordingly, Revenue fails in this aspect. Claim for exemption u/s 80P(2)(d) with respect to interest on deposits with other co-operative banks - Held that:- In view of the clear phraseology of Sec. 80P(2)(d) of the Act and the judgment of the Hon'ble Karnataka High Court in the case of M/s. The Totgars' Cooperative Sale Society Limited (2017 (1) TMI 1100 - KARNATAKA HIGH COURT ), the amount of interest earned by the assessee from deposits with other co-operative banks is eligible for exemption. Accordingly, on this aspect also, order of CIT(A) is set-aside and the Assessing Officer is directed to allow the claim of the assessee.
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