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Income Tax Officer, Mumbai Versus M/s Bharat Petroleum Employees Co-Op. Credit Society Ltd.,

2015 (4) TMI 1055 - ITAT MUMBAI

Relief u/s 80P - assessee is a credit co-operative Society - CIT(A) allowed the assessee's appealallowing relief u/s 8OP - Held that:- The conclusion drawn by the ld. CIT(A) is in accordance with judgment of Hon’ble Gujarat High Court in the case of CIT vs. Jafari Momin Vikas Co. Op. Credit Society Ltd. [2014 (2) TMI 28 - GUJARAT HIGH COURT] as per CBDT Circular No. 133 of 2007 dated 9.5.2007 - Sub-section(4) of section 80P will not apply to an assessee which is not a co-operative bank - The res .....

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dhi O R D E R PER G.S. PANNU, A.M. This appeal by the Revenue is directed against the order passed by the ld. CIT(A) - 33, Mumbai dated 02-09-2013 for the A.Y. 2010-11 in the matter of an order passed by the Assessing Officer under Section 143(3) of the Income Tax Act, 1961 dated 16-01-2013. 2. In this appeal, the Revenue has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in allowing assessee's appeal and allowing .....

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he order of the CIT(A) on the above grounds be reversed and that of the Assessing Officer be restored. 3. In brief, the relevant facts are that the respondent assesee is a Co- Operative Society registered under the Maharashtra C0-Operative Societies Act, 1960. The society is run by the employees of Bharat Petroleum Corporation Ltd. and its main activity is providing credit facilities to its members only, who happen to be the employees of Bharat Petroleum Corporation Ltd. The society is giving lo .....

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ion that after the insertion of sub-section (4) of Section 80P exemption shall not be available in relation to any Co-Operative Bank other than primary agricultural credit society or primary co-operative agricultural and rural development bank. According to the A.O. sub clause (viia) was also inserted in clause (iv) of Section 2 to provide that the profits and gains of any business of banking (including providing credit facilities) carried by cooperative society with its members shall be include .....

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has since disagreed with the A.O. primarily on the ground that the assesse-society was not carrying out any banking facilities and that its activities were limited to its members only. The ld.CIT(A) also held that the activities of the assessee do not fall for consideration as banking activities as defined in Banking Regulation Act, 1949. In coming to such conclusion, the ld. CIT(A) has relied on the following decisions of the Tribunal:- (i) ITO, Wd 1(4) Pune v/ Jankalyan Nagri Sahakari Patsanst .....

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he aforesaid decision of the ld. CIT(A), Revenue is in appeal before us. 6. Before us the ld. Representative of the assessee, at the outset, pointed out that the conclusion drawn by the ld. CIT(A) is in accordance with judgment of Hon ble Gujarat High Court in the case of CIT vs. Jafari Momin Vikas Co. Op. Credit Society Ltd. [2014] 362 ITR 331 (Guj). In this context the following discussion in the judgment of Hon ble Gujarat High Court is relevant:- The Assessing Officer held that by virtue of .....

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statutory provisions under consideration in isolation, in our opinion, the question of law could be stated to have arisen. When, as contended by the assessee, by virtue of sub-section (4) only co-operative banks other than those mentioned therein were meant to be excluded for the purpose of deduction under section 80P, a question would arise why then the Legislature specified primary agricultural credit societies along with primary co-operative agricultural and rural development banks for exclu .....

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ard of Direct Taxes, on the above given subject. 2. In this regard, I have been directed to state that sub-section(4) of section 80P provides that deduction under the said section shall not be allowable to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. For the purpose of the said sub-section, co-operative bank shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949. 3. In Part V .....

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ve clarification, it can be gathered that sub-section (4) of section 80P will not apply to an assessee which is not a co-operative bank. In the case clarified by the Central Board of Direct Taxes, the Delhi Co-op. Urban Thrift and Credit Society Ltd. was under consideration. The circular clarified that the said entity not being a co-operative bank, section 80P(4) of the Act would not apply to it. In view of such clarification, we cannot entertain the Revenue's contention that section 80P(4) .....

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ri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha in Income Tax Appeal No. 5006/2013 dated 5th February, 2014 also considered a similar issue. The following discussion in the judgment of Hon ble Karnataka High Court is relevant:- Section 80P of the Act deals with the deduction of income of a society. In the case of any assessee being a Co-operative society, the whole of the amounts of profits and gains of business attributable to any of other activities referred to sub-section (2) of Sectio .....

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ive agricultural and rural development bank. (a) "co-operative bank" and "primary agricultural credit society" shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (10 of 1949); (b) "primary co-operative agricultural and rural development bank" means a society having its area of operation confined to a taluk and the principal object of which is to provide for long-term credit for agricultural and rural development activ .....

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