TMI Blog2016 (4) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... iness of providing credit facilities to its members; mentioned under the provisions of section 80P(2)(a)(i) of the Act. Further as the Assessing Officer has not dealt any other issues on merits, we find it justified to remand the matter back to the file of Assessing Officer with a clear finding to assess the assessee cooperative society as a co-op. society falling under the category of provisions of section 80P(2)(a)(i) of the Act and not under the provisions of sec.80P(4) of the Act and accordingly frame fresh assessment order after providing reasonable opportunity of being heard to the assessee who will file financial statement and details of income earned and then decide the quantum of deduction available, if any, to assessee u/s 80P(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,47,963/- on pro-rata basis is incorrect and excessive so that it may be reduced. 2. Briefly stated facts as culled out from the material on record are that the assessee is a Co-operative Society engaged in the activity of providing credit facilities to its members and it e-filed its return of income on 30/9/2008 declaring total income at Rs.NIL after claiming deduction u/s 80P at ₹ 2,42,211/-. The case was selected for scrutiny assessment on CASS and notice u/s 143(2) of the Act was issued on 29/09/2009 and served upon the assessee. During the course of assessment proceedings Assessing Officer came to the conclusion that assessee is a Co-op. Bank falling under the provisions of section 80P(4) of the Act and, therefore, not eligi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic cannot be equivalent to taking deposits from members of the society only which has got a much restricted meaning and the relationship between a society and a public has to be understood in a much larger sense. In this connection, it would be useful to refer to the decision of the Hon'ble Jurisdictional High Court wherein their lordships of Gujarat High Court have considered the above provisions of s.80P(2)(a)(i) in the case of CIT vs. Baroda Peoples Co-op. Bank Ltd. 280 ITR 282 (Guj). Their lordships have held at para 28 of said judgment as under :- 28. Section 80P(2)(a)(i) of the Act permits a Co-operative Society engaged in carrying on the business of banking or providing credit facilities to its members to claim deduction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) primary credit societies, who virtually function like banks. but whose net worth is less than ₹ 1 lakh; who are not members of the payment system and to whom deposit insurance is not extended, (ii) primary cooperative banks, popularly called Urban Cooperative Banks, whose net worth is ₹ 1 lakh and above; who are recognized as banks, are members of payment system and who enjoy deposit insurance (iii) cooperative credit societies, who confine their activities to their members alone and who do not perform banking functions. In this chapter, the committee deals with these cooperative credit society. 7.2 Under the provisions of Section 5(ccii) of Banking Regulation Act, 1949 (AACS), a cooperative credit society is defined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll under the exceptions as provided u/s 80P(4). I have also noted the decision of honorable ITAT Mumbai bench in the case of Salgaon Sanmitra Sahakari Pathped Ltd. 12 taxmann.com 246; where both the CIT (Appeals) and the ITAT have held that the corporative credit society in that case was not a co-operative bank. I also respectfully agree with the decision of the ITAT Banglore B bench in the case of ACIT vs. M/s Bangalore Commercial Transport Credit Co-op. Society Ltd. in ITA No.1069/Bang/2010 for AY 2007-08 dated 8/4/2011 which has decided the issue in favour of the appellant. Therefore, it is held that the appellant is entitled to the benefit of deduction u/s 80P(2)(a)(i) of the IT Act. 4. We have heard the rival contentions an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, by indents, with own cost or through other means and purpose to sale members and other customers at reasonable rates to open stores make arrangement and following rules constructed by management committee as well as recognized rules by Hon. Registrar, provide debit facilities to members. 4.a As its own members occupation employment business and Gruh Udhyog may be get encouragement provide loan advance facilities against the form of that goods and in that related if required need in that connection purpose to make whole sale purchasing take agency or and for other entire necessary requirements make necessary arrangements and prepare rules. 5. From going through the aims and objectives of the society we find that assessee is not com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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