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2018 (9) TMI 1462 - ITAT COCHINBenefit of deduction u/s 80P(2)denied - interest received on investments with sub-treasury - denial of claim as the assessee was primarily engaged in the business of banking and by virtue insertion of section 80P(4) with effect from 01.04.2007, the assessee was not entitled to deduction claimed u/s 80P(2) - Held that:- Identical issue was considered in the case of ITO v. The Chengala Service Co-operative Bank Limited [2018 (4) TMI 339 - ITAT COCHIN] as held The undisputed facts are that the assessee in these cases are primary agricultural credit societies, registered as such under the Kerala Co-operative Societies Act. In the case of Chirakkal Service Co-operative Bank Limited & Ors. (2016 (4) TMI 826 - KERALA HIGH COURT) had categorically held that when a primary agricultural credit Society is registered as such under the Kerala Co-operative Societies Act, 1969, such society is entitled to the benefit of deduction u/s 80P(2) of the Income-tax Act. Assessing Officer was not competent and did not possess the jurisdiction to resolve / decide the issue as to whether the assessee was a 'Primary Agricultural Credit Society' or a 'Co-operative bank', within the meaning assigned to it under the provisions of the Banking Regulation Act and to take a contrary view especially in view of the Explanation provided after the clause (ccvi) of section 5 r.w.s Section 56 of the Banking Regulation Act. Interest received on investments with sub-treasury is part of banking activities of the assessee and the same is entitled to deduction u/s 80P(2)(a)(i)- Decided in favour of assessee. Trade income entitled to deduction u/s 80P(2)(a)(iii) / 80P(2)(a)(iv)- Held that:- There is no specific reasons given by the A.O. nor CIT(A) for denying the deduction claimed u/s 80P(2) for trade income derived by the assessee. Therefore, we restore the issue of trade income whether it is entitled to deduction u/s 80P(2) of the I.T.Act, to the file of the A.O. It is ordered according Income from house property is not entitled to deduction under any of the clauses of Sec.80P(2)(a) of the I.T.Act.
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