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2016 (5) TMI 1545 - ITAT MUMBAIDeduction u/s 80P in respect of interest received from the schedule bank - HELD THAT:- As relying on QUEPEM URBAN CO-OPERATIVE CREDIT SOCIETY LTD. [2015 (6) TMI 573 - BOMBAY HIGH COURT] where assessee-cooperative society could not be regarded as “Cooperative Bank‟ on, mere fact that an insignificant proposition of revenue was coming from non-members, and thus, was entitled for deduction under section 80P(2)(a)(i) - Decided against revenue. Deduction of interest and dividend received from cooperative bank u/s 80P(2)(d) - Assessee that the disputed amounts from the alleged banks are not investment but is a current account and the finding of the ld. Commissioner of Income Tax (Appeals) for Assessment Year 2012-13 and also in the absence of any contrary decision more specifically from the Revenue side, the assessee being a cooperative society, therefore, providing credit facilities to its members is an allowable deduction u/s 80P(2) of the Act. However, in terms of section 80P, the meaning of the words “cooperative Bank” has to be the meaning assign to it in chapter –V of the Banking Regulation Act, 1949. A cooperative bank is defined in section 5(cci) of the Banking Regulation Act to mean a state cooperative bank, a central cooperative band and a primary cooperative bank. Admittedly, the assessee is neither a state cooperative bank nor central cooperative bank but a cooperative society. So far as the contention of the Revenue that the assessee deals with non-members is concerned, we are of the view that section 80P(1) restrict the benefit of deduction of income of cooperative society to the extent it is earned by providing credit facilities to its members, therefore, to the extent of income earned is attributable to the dealings with non-members are concerned, the benefit of section 80P will not be available, thus, while giving effect to the order, the authorities would restrict the benefit of deduction u/s 80P only to the extent that the same is earned by the appellant in carrying on its business of providing credit facilities to its members. With this rider, the appeal of the assessee is allowed.
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