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2023 (1) TMI 515 - AT - Income TaxDeduction u/s 80P - Assessee is a Cooperative Society registered under Karnataka Souharda Sahakari Act, 1997 - AO held that assessee does not fall in the definition of a 'Cooperative Society' u/s 2(19) of the Act and is not eligible for deduction u/s 80P - HELD THAT:- We are of the opinion that this issue is squarely covered by case of M/s. Pavagada Souharda Multi-Purpose Co-operative Ltd. [2021 (9) TMI 806 - ITAT BANGALORE] as held assessee should be allowed deduction under section 80P(2)(a)(i) of the Act and the CIT(A) was justified in doing so. Except the ground that the Assessee was not a co-operative society entitled to deduction u/s.80P(2)(a)(i) of the Act, no other reasons were given for denying the benefit of the said deduction to the Assessee. Hence, the order of CIT(A) is upheld. Also in SHREE MAHILA CREDIT SOUDHARDHA SAHAKARI LTD. [2016 (6) TMI 1226 - KARNATAKA HIGH COURT] held if the assessee is not a co-operative bank carrying on exclusively banking business and if it does not possess a license from the Reserve Bank of India to carry on business, then it is not a co-operative bank. It is a co-operative society which also carries on the business of lending money to its members which is covered under section 80P(2)(a)(i) of the Income-tax Act, 1961, i.e. carrying on the business of banking for providing credit facilities to its members. It is entitled to the special deduction under section 80P. Thus we inclined to decide the issue in favour of the assessee in allowing the claim u/s 80P of the Act. TDS u/s 194A - payment of interest to its members - non-deduction of TDS for invoking provisions of section 40(a)(ia) - HELD THAT:- In the present case, there is no allegation that the assessee paid interest on deposits other than its members. Hence, the issue is to be decided in favour of the assessee in respect of payment of interest to its members regarding which section 194A of the Act is not applicable in respect of payment of interest to its members. To that extent, the assessee’s claim is to be allowed.
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