GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (6) TMI 573 - BOMBAY HIGH COURT

2015 (6) TMI 573 - BOMBAY HIGH COURT - [2015] 377 ITR 272 (Bom) - Entitlment to the benefit of Section 80P(2)(a)(i)denied - whether assessee is a Primary Co-operative Bank, thus hit by the exclusion provided in Section 80P(4)? - Held that:- As rightly pointed out on behalf of the appellant the word society as referred to bye law 9(d) would include the co-operative society. This is so as the definition of a society under the Co-operative Act is co-operative society registered under the Cooperativ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ank is not satisfied. Thus, the three conditions as provided under Section 5 (CVV) of the Banking Regulation Act, 1949, are to be satisfied cumulatively and except condition (2) the other two qualifying conditions are not satisfied. Ergo, appellant cannot be considered to be a co-operative bank for the purposes of Section 80P(4) of the Act. Thus, the appellant is entitled to the benefit of deduction available under Section 80P(2)(a)(i) of the Act.

The contention of Ms. Dessai, learne .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

deduction under Section 80P of the Act only to the extent that the same is earned by the appellant in carrying on its business of providing credit facilities to its members. - Decided in favour of assessee. - TAX APPEAL NOS. 22 TO 24 OF 2015 - Dated:- 17-4-2015 - F.M. REIS AND M.S. SANKLECHA, JJ. For The Appellant : Chythanya K.K. and Shailesh Redkar, Advocates For The Respondent : Asha Dessai, Advocate JUDGMENT 1. These three appeals filed under Section 260A of the Income Tax Act, 1961 (herein .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Act. 2. All the three appeals were admitted on 25 March, 2014 on the following substantial question of law : Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law in holding that the Appellant is a Co-operative Bank and hence, it is not entitled to deduction under Section 80P(2)(a)(i) by virtue of Section 80P(4) of the Act ? 3. The Appellant had taken out an application for interim reliefs. At that time it was noticed that the controversy is wi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ppellant is Co-operative society registered under the Goa Co-operative Societies Act, 2001 (hereinafter referred to as 'Cooperative Act'). On 26 December, 2009 the appellant filed its return of income declaring gross total income of ₹ 1.31crores. However, the appellant claimed deduction of its entire income under Section 80P(2)(a)(i) of the Act resulting in nil taxable income. (b) By order dated 14 February, 2014, the Assessing Officer disallowed the appellant's claim for deduc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cer, the appellant preferred an appeal to the Commissioner of the Income Tax (hereinafter referred to as 'CIT(A)). By an order dated 15 July, 2014, the CIT(A) allowed the appellant's appeal holding that the appellant is not a Cooperative Bank but a Co-operative Credit Society. Thus, not hit by the exclusion provided under Section 80P(4) of the Act. Consequently, the Assessing Officer was directed to extend the benefit of deduction under Section 80P(2)(a)(i) of the Act to the appellant. ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lant-Assessee is in appeal before us from the impugned order dated 26 November 2014 of the Tribunal. It is contented that it is entitled to the benefit of Section 80P(2)(a)(i) of the Act and not hit by the exclusion in Section 80P(4) of the Act. For the proper consideration of the rival submissions, it is necessary to reproduce the relevant provisions of Section 80P of the Act and also the definition of a primary Co-operative Bank and Banking as defined in chapter V of the Banking Regulation Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

business of banking or providing credit facilities to its members, or..." the whole of the amount of profits and gains of business attributable to any one or more of such activities. (ii) to (vii) ....; (b) to (f) .....; (3) … (4) The provisions of this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary cooperative agricultural and rural development bank. Explanation - For the purposes of this sub-section, - (a) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n 5 (CCV) : "Primary Co-operative Bank" means a co-operative society, other than a primary agricultural credit society - (1) the primary object or principal business of which is transaction of banking business : (2) the paid-up share capital and reserves of which are not less than one lakh of rupees : and (3) the bye-laws of which do not permit admission of any other co-operative society as a member : Provided that this sub-clause shall not apply to the admission of a co-operative bank .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e appellant from its activity of providing credit facilities to its members, is entitled to deduction under Section 80P(2)(a)(i) of the Act. The appellant is not a co-operative Bank and thus, the exclusion provided under Section 80P(4) of the Act would have no application. (b) The impugned order erroneously holds that the appellant to be a primary co-operative Bank, on the ground that it does satisfy Section 5(1)(ccv) of the Banking Regulation Act, to the extent that it holds that, it satisfies .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ignores the fact that the appellant cannot be held to have as its principal business as banking business in the absence of a banking licence issued to the appellant by the Reserve Bank of India under Banking Regulation Act. This licence is a sine quo non for recognizing to the appellant by a co-operative bank. The issue of the appellant not being a co-operative bank in the absence of a licnece to do banking business is concluded by the decision of the Karnakata High Court in CIT v. Sri Biluru Gu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ection 80P(2)(a)(i) of the Act. This on the ground that Section 80P(2)(a)(i) of the Act specifically provided that the deduction thereunder will be available only in case of co-operative society which is providing facilities to its members. 8. Section 80P of the Act provides deduction in support of income of co-operative societies. Subsection (1) allows deduction to Cooperative Society to the extent its gross income includes any income referred to in subsection (2) in computing its total income. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion (3) of Section 80P(4) of the Act for the purposes of this case. Subsection (4) provides that Section 80P of the Act will not apply in relation to a cooperative bank other than a primary agricultural credit society or primary agricultural and rural development bank. Before us, the appellant is not claiming to be a primary agricultural credit society or primary agricultural and rural development bank but it claims to be engaged in providing credit facilities and not a banking society. Thus no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ction 80P(4) of the Act would not exclude the appellant from claiming the benefit of deduction under Section 80P(2)(a)(i) of the Act. However in terms of Section 80P of the Act the meaning of the words Cooperative Bank is the meaning assigned to it in Chapter V of the Banking Regulation Act, 1949. A cooperative bank is defined in Section 5(cci) of Banking Regulation Act to mean a State Cooperative Bank, a Central Cooperative Bank and a primary cooperative bank. Admittedly, the appellant is not a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e less that rupees one lakh. (3) Its bye-laws do not permit admission of any other cooperative society as its member. It is accepted position that condition No.(2) is satisfied as the share capital in an excess of rupees one lakh. It has been the appellant's contention that the conditions No. (1) and (3) provided above are not satisfied. 10. Therefore the issue that arises for consideration is whether the appellant satisfies condition No.(1) and (3) above. The impugned order after referring .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by seeing deposits. This read with Bye law 43 leads to the conclusion that it is carrying on banking business. This fact of accepting deposits from people who are not members has been so recorded by the CIT(A) in his order dated 15 July, 2014. Before the Tribunal also the appellant did not dispute the fact that in a few cases they have dealt with non members. However so far as accepting deposits from non members is concerned it is submitted that the Bye-law 43 only permits the society to accept .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ugned order erroneously relies upon bye-law 43 of the society which enables the society to receive deposits to conclude that it can receive deposits from public. However, the impugned order relies upon bye-law 43 to conclude that it enables the appellant to receive deposits from any person is not correct. Thus in the present facts the finding that the appellant's principal business is of Banking is perverse as it is not supported by the evidence on record. So far as the issue of primary obje .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ative contention of the appellant that it is not in the business of Banking as the sine quo non to carry on banking business is a licence to be issued by the Reserve Bank of India, which it admittedly does not have, is not being considered. 12. So far as condition No.3 of the definition/meaning of Primary Cooperative Bank as provided in Section 5(ccv) of the Banking Regulation Act is concerned, the same requires the Bye laws of society to contain a prohibition from admitting any other cooperativ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a primary cooperative bank is not satisfied. However the impugned order construed the amended clause 9(d) of the appellant's bye laws to mean that it only permits a society to be admitted to the membership of the appellant and not a co-operative society. According to the impugned order, a society and a co-operative society are clearly words of different and distinct significance and the membership is only open to society and not to a co-operative society. As rightly pointed out on behalf of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version