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TMI Blog2014 (8) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... mpression that the income earned for the activity of credit society to grant finance to its members is parallel to Banking Business The Appellant submits that the appellant's credit society is not doing the business of banking and therefore the provision of Section 80P(4) is not applicable and the deduction is available u/s.80P(2)(a)(I) of the IT Act.." 2. It is apparent from the above reproduced ground, the assessee's claim is that the deduction is available u/s.80P(2) of IT Act, which was denied by the AO vide an order u/s.143(3) of IT Act dated 24.12.2007. The AO had mentioned that the assessee society had carried out the business of banking and claimed the deduction u/s.80P(2) of IT Act. In his opinion, the benefit is admissible only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered or deemed to have been registered under any Central Act for the time being, in force relating to the multi state co-operative societies for the time being in force." 4.3(i) In view of the above definition, it is clear that the appellant comes under the definition of Co-operative Bank. Hence, section 80P(4) is clearly applicable to the appellant." 4. Heard both the parties. Orders of the Revenue Authorities are perused. At the outset, we have been informed that the issue has already been addressed by Hon'ble ITAT 'B' Bench Ahmedabad in the case of M/s. Jafri Momin Vikas Co-operative Credit Society (ITA No.1491/Ahd/2012 A.Y.2009-10, order dated 31.10.2012, wherein the final verdict is as under: "10.4 Thus, the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1959 Nature of Business 1. As defined in section 6 of Banking Regulation Act. 2. Can open savings bank account, current account, overdraft account, cash credit account, issue letter of credit, discounting bills of exchange, issue cheques, demand draft(DD), Pay Order, Gift cheques, lockers, bank guarantees etc. 3. Co-operative Banks can act as clearing agent for cheques DDs, pay orders and other forms. 4. Banks are bound to follow the rules, regulations and directions issued by Reserve Bank of India (RBI) 1. As per the bye laws of the co-operative society. 2. Society cannot open savings bank account, current account, issue letter of credit, discounting bills of exchange, issue cheques, demand drafts, pay orders, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion, the question of law could be stated to have arisen. When, as contended by the assessee, by virtue of subsection (4) only cooperative banks other than those mentioned therein were meant to be excluded for the purpose of deduction under section SOP, a question would arise why then Legislature specified primary agricultural credit societies along with primary cooperative agricultural and rural development banks for exclusion from such exclusion and in other words, continued to hold such entity as eligible for deduction. However, the issue has been considerably simplified by virtue of CBDT circular No.133 of 2007 dated 9.5.2007. Circular provides as under:- "Subject: Clarification regarding admissibly of deduction under section 80P of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot entertain the Revenue's contention that section SOP(4) would exclude not only the co-operative banks other than those fulfilling the description contained therein but also credit societies, which are not co-operative banks. In the present case, respondent assessee is admittedly not a credit co-operative bank but a credit co-operative society. Exclusion clause of sub-section(4) of section 80P, therefore, would not apply. In the result, Tax Appeals are dismissed." 4.2 Further in another Tax Appeal No.1150 of 2013 in the case of CIT Vs. Surat Vankar Sahakari Sangh Ltd., order dated 17th January, 2014, it was finally concluded that assessee being not a Co-operative Bank, therefore, the provisions of Section 80P(4) shall not apply, The H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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