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2017 (11) TMI 449 - AT - Income TaxEligibility for deduction u/s. 80P - Held that:- It is clear that the ld. CIT(A) has omitted to peruse the assessee’s stated stand before him, i.e., by way of ‘statement of facts’, filed along with the memo of appeal before him, and which corresponds with the material on record. It is therefore the assessee who has taken an inconsistent and ambivalent stand in the matter, with the ld. CIT(A) in fact issuing a finding contradictory to the assessee’s own stated decision. So however, it could also be that its’ principal business is restricted to providing financial accommodation to it’s members for agricultural and related purposes. We say so as the said activity also is a sub set of activity of lending, a business the assessee is definitely engaged in. The matter would therefore require being examined on facts. And the assessee allowed deduction if its principal business found to be so, so that it is a primary agricultural credit society, even as held by the ld. CIT(A), even though in contradiction to the assessee’s claim before him. This is as the matter is principally of fact, on which no examination has taken place; the Assessing Officer (AO) also resting content on finding, and not incorrectly, that the assessee is a primary co-operative bank, i.e., save for it being a primary agricultural credit society, which stands excepted in the definition of the former and, in any case, is excepted u/s. 80-P(4) and, therefore, is entitled to deduction u/s. 80-P(1). Where so, and which would only be on the basis of a positive finding to that effect, the assesseee, irrespective of its’ name, which is apposite, is eligible for deduction u/s. 80-P. The matter is accordingly restored to the file of the AO, who shall decide per a speaking order TDS u/s 194A - non deduction of tds on the interest allowed on the time deposits maintained with it by it’s depositors, members or nonmembers - Interest other than “Interest on securities” - Held that:- The word ‘principal’, a word of common usage, is well understood both in law and in common parlance. Its use, in conjunction with the words ‘primary object’, as explained in Madras Autorickshaw Driver’s Cooperative Society Ltd. (1982 (10) TMI 28 - MADRAS High Court) is to ascertain the character of the business being actually carried out by the society in terms of its’ objects. The maintainability of section 194A(3)(viia), on the basis of which relief stands allowed to the assessee by the ld. CIT(A) in the Revenue’s second appeal, is consequential, though the assessee, a co-operative society in the business of banking, is at liberty to advance its’ case, i.e., as to the non-application of section 194A(1), alternatively, on any other ground/basis in the set-aside proceedings. The AO shall decide per a speaking order, allowing the assessee a reasonable opportunity to state and present its’ case before him
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