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2016 (8) TMI 328 - CALCUTTA HIGH COURT

2016 (8) TMI 328 - CALCUTTA HIGH COURT - TMI - Eligibility for deduction under section 80P - Income attributable to banking activities carried on with non-members - Held that:- On a plain reading of Section 80P(2)(a)(i) that a co-operative society engaged in carrying on the business of banking and a co-operative society engaged in the business of providing credit facilities to its members have been treated differently, and in that perspective the view taken is correct when they held that there w .....

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n u/s. 80P(2)(a)(i), a co-operative bank need not carry on the business of banking only with its members. Income attributable to banking activities carried on with non-members will also be entitled to special deduction under this section. - Decided against revenue - ITA 476 of 2008 - Dated:- 18-7-2016 - Girish Chandra Gupta And Arindam Sinha, JJ. For the Petitioner : Mr. P. K. Bhowmick, Adv For the Respondent : Mr. J. P. Khaitan, Sr. Adv. Mr. P. Bag, Adv ORDER The Court : The subject matter of c .....

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operative bank need not deal only with its members. Exemption under the section has not been granted on the principle of mutuality alone. As such, a separate exemption provisions is not required for receipts that satisfy the principle of mutuality. Such receipts are not income and are outside the scope of section 4 of the Act. There was no reason why the conjunction or should be read as and . Exemption is allowed to co-operative credit societies u/s. 80P(2)(a)(i). Admittedly, such societies do n .....

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once again come up in appeal. The question of law, formulated on 7th August, 2008 when the appeal was admitted, reads as follows: Whether on the facts and circumstances of the case the Income Tax Appellate Tribunal was justified in law in treating the interest income from nonmembers, from nominal member, from trading in securities and other receipts to be eligible for deduction under Section 80P of the Income Tax Act whereas the provision of section 80P(2) of the Income Tax Act clearly lays down .....

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the business of banking. The income arising from such investments would, therefore, be attributable to the business of bank falling under the head Profits and gains to business and thus deductible under section 80P(2)(a)(i) of the Income-tax Act 1961. This has been so held in Bihar State Co-operative Bank Ltd. v. CIT [1960] 39 ITR 114 (SC), CIT v. Karnataka State Cooperative Apex Bank [2001] Supp. (2) SCR 35; [2001] 251 ITR 194 [SC] and CIT v. Ramanathapuram District Co-operative Central Bank L .....

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