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2017 (7) TMI 855 - AT - Income TaxDenial of deduction u/s 80P - whether society had declared itself as banking organization providing credit facility to its members? - whether assessee falls u/s 80P(2)(a)(i) or u/s 80P(4) - Held that:- There is no dispute about the nature of activity carried on by assessee viz. providing credit facilities to its members only and not to general public. No deposits had been received from general public. Merely because a co-operative society is carrying on the business of banking, the deduction u/s 80P could not be denied unless it comes within the ambit of cooperative bank as contemplated u/s 80P(4). Therefore, even if, it is held that assessee was carrying on activity of banking still since, it did not answer the description of ‘banking’ as contemplated under the Banking Regulations Act, 1949, it cannot be held to be cooperative bank. From the forgoing discussion, it is clear that there cannot be any dispute that if the primary object or principal business is banking as contemplated under BRA then only the cooperative society will come within the ambit of primary cooperative bank. Now what is banking has been defined in section 5(b) of the Banking Regulations Act, 1949 and section 56, nowhere states that the context in which primary cooperative bank has been defined is in context different from that as contemplated u/s 5(b) of the Banking Regulations Act, 1949. Therefore, only those transactions of banking business come within the ambit of clause (ccv) of section 56 which meet the mandate of section 5(b) of the Banking Regulations Act, 1949. As find in the case of Shri Laxmi Credit Souhard Sahakari Ltd. (2015 (11) TMI 647 - KARNATAKA HIGH COURT ) has upheld the claim of assessee under identical circumstances and, therefore, respectfully following the decision of Hon’ble Karnataka High Court, the assessee’s claim is allowed.
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