TMI Blog2016 (3) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is not entitled to the benefit of Section 80P(2)(a)(i) of the Act in view of the fact that it deals with non-members cannot be upheld. This for the reason that Section 80P(1) of the Act restricts the benefits of deduction of income of co-operative society to the extent it is earned by providing credit facilities to its members. As at the time when effect has been given to the order of this Court, the authorities under Act would restrict the benefit of 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. - ITA No. 437/PAN/2015, ITA No. 438/PAN /2015, ITA Nos. 443 to 445/PAN/2015, ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have gone through the assessment order and the submission of the appellant. The AO has equated the appellant Co-operative society with Primary Cooperative bank and has denied deduction u/s.80P(2). On this issue, The Hon'ble High Court has decided as under: There is no dispute between the parties that the appellant is a co-operative society as the same is registered under the Co-operative Act. The appellant is claiming deduction of income earned on providing credit facilities to its members as provided under section 80P(2)(a)(i) of the Act. It is appellant's case that, it is not carrying on the business of the banking. Consequently, not being a co-operative bank the provisions of Section 80P(4) of the Act would not exclude the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Business' as defined in Section 5b of the Banking Regulation Act, held that the principal business of the Appellant is Banking Section 5b of the Banking Regulation Act defines banking to mean accepting of deposits for the purpose of lending or investment, of deposit of money from the public repayable on demand or otherwise. The impugned order juxtaposes the above definition with the finding of fact that the apel1ant did deal with non members in a few cases 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... primary object is banking. Consequently there is no occasion to deal with the same as that is not the basis on which the impugned order holds that it is a Primary Cooperative bank. In the above view, the alternative 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. 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 cooperative society as its member. In fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Revenue has not been able to show any such prohibition in the bye laws of the appellant. Thus even the aforesaid qualifying condition (3) for being considered as a primary cooperative bank 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, learned Counsel for the revenue that the appellant is not entitled to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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