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2015 (10) TMI 2437 - ITAT PANAJI

2015 (10) TMI 2437 - ITAT PANAJI - TMI - Deduction under sec. 80P(2)(a)(i) - as per revenue the assessee is a cooperative society which carries on banking business, and hence a primary cooperative bank as per sec. 5(ccv) of the Banking Regulation Act, 1949 - CIT(A) allowed the claim - Held that:- The Departmental Representative has simply relied on the order of the Assessing Officer. He could not point out any specific error in the order of the Commissioner of Income Tax (Appeals).

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epem Urban Cooperative Credit Society Ltd. (2015 (6) TMI 573 - BOMBAY HIGH COURT) which is on the same lines as that of the Hon'ble Karnataka High Court in the case of Shri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Bagalkot (supra).

As the assessee is not a Cooperative bank earning on exclusively banking business and as it does not possess a licence from Reserve Bank of India to earn on business, it is not a Co-operative bank. It is a Cooperative society which also carries .....

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ed. - Decided in favour of assessee. - ITA No. 273/PNJ/2015, C O No. 66/PNJ/2015 - Dated:- 7-9-2015 - N S Saini, AM And George Mathan, JM For the Appellant : Shri Sandip Bhandare - CA For the Respondent : Shri Ramesh S Mutagar - DR ORDER Per N S Saini, Accountant Member This is an appeal filed by the Revenue and the cross objection filed by the assessee are directed against the order of Commissioner of Income Tax (Appeals), Hubli, dated 27/02/2015. 2. The grievance of the Revenue in this appeal .....

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to accept the deposits and provide financial accommodation to the members of the society. According to the Assessing Officer, after insertion of clause (viia) to sec. 2(24) w.e.f. 01/04/2007, 'income' includes the profit and gains of any business of banking (including providing credit facilities) carried in by such cooperative society with its members comes within the definition of income. Therefore, assessee-cooperative society was a primary cooperative bank and not eligible for deduct .....

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further observed that the Assessing Officer held that by virtue of sec. 80P(4), the assessee would not be entitled to benefit of deduction under sec. 80P. Commissioner of Income Tax (Appeals) observed that the Hon'ble High Court of Karnataka Dharwad Bench in the case of CIT Vs. Shri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Bagalkot in appeal No. 5006/2013 dated 05/02/2014 has held that the intention of the legislature is clear. If a Co-operative Bank is exclusively carrying on ba .....

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bank which is exclusively carrying on banking business that is the purport of this amendment. Therefore, as the assessee is not a Cooperative bank earning on exclusively banking business and as it does not possess a licence from Reserve Bank of India to earn on business, it is not a Co-operative bank. It is a Cooperative society which also carries on the business of lending money to its members which is covered under Section 80P(2)(a)(i) i.e. carrying on the business of banking for providing cr .....

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n'ble Bombay High Court at Goa in the case of M/s. The Quepem Urban Cooperative Credit Society Ltd. Vs. ACIT in Tax Appeals Nos. 22 to 24/2015 order dated 17/04/2015 and submitted that the facts of the assessee's case are similar to the facts in the above case before the Hon'ble Bombay High Court at Goa and therefore, the order of the Commissioner of Income Tax (Appeals) should be upheld and appeal of the Revenue be dismissed. 7. We have considered the rival submissions and perused t .....

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(24)(viia) 'income' includes the profit and gains of any business of banking (including providing credit facilities) carried on by such cooperative society with its members comes within the definition of income. Thus, as per sec. 80P(4) read with sec. 2(24)(viia) the assessee-cooperative society is held to be a primary cooperative bank and hence, not eligible for deduction in view of the provisions of sec. sec. 80P. 8. On appeal, Commissioner of Income Tax (Appeals) has allowed the claim .....

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