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2015 (6) TMI 1113 - AT - Income TaxDeduction u/s.80P(2)(a)(i) denied - claim of the assessee for deduction u/s. 80P(2)(a)(i) disallowed for the reason that the assessee fell within the realm of Banking Regulation Act, 1949 - Held that:- No doubt, the assessee had satisfied two of the three primary conditions mentioned in section 5(ccv) of the Banking Regulation Act, 1949 viz., it had the primary object of banking and it had share capital which was in excess of Rs. One lakh. But, we find from the membership qualification as set out in the bye law, which has been reproduced by the Assessing Officer at page 37 of his order that there was nothing which forbid a cooperative society from becoming a member. It is clearly stated that every person competent to contract under section 11 of the Indian Contract Act, 1872 could become a member, provided other conditions are satisfied. A person will definitely include a cooperative society. In any case, we find that the Hon’ble jurisdictional High Court in the case of Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Bagalkot (2015 (1) TMI 821 - KARNATAKA HIGH COURT ) in relation to a similar issue, has held the business of the assessee is to provide credit facilities to its members. Since the assessee cannot carry on any banking business, the interest on investment is taxable as income from other source. Therefore the aforesaid facts, which is not in dispute clearly establishes that it is not a Cooperative Bank. Revisional Authority also in its order has categorically stated that the assessee is a Co-operative society, which provides credit facilities. Section 80P of the Act deals with the deduction of income of a society. - Decided in favour of assessee
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