TMI Blog2016 (11) TMI 1630X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 - - - Dated:- 11-11-2016 - SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Appellant : Shri C.W. Angolkar (DR) For The Assessee : Shri V.G. Ginde Uday M. Karve Order under section 254(1) of Income Tax Act PER PAWAN SINGH JUDICIAL MEMBER : 1. This appeal under section 253 of income tax act(Act) is directed by revenue against the order of Commissioner( Appeals) -1, Mumbai dated 21st of October 2015 for AY 2012 13. Though the revenue has raised as many as three grounds of appeal but as per our considered opinion the effective grounds of appeal raised by the revenue is whether ld Commissioner (Appeals) erred in deleting the disallowance of ₹ 4 838514/ . 2. The brief f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td [2016] 74 taxman.com 226 (Madras). 4. We have considered the rival contention of the parties and further gone through the orders of authorities below. The Commissioner(Appeals) relied on the decision of Quepem Urban Co-operative Credit Society Ltd(supra) and passed the following order; 9. There is no dispute between the parties that the appellant is a cooperative society as the same is registered under the Co-operative Societies 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 Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r referring to the definition of 'Banking 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 appellant 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 Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r draws no sequiter to conclude that the 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. 11. 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. 12. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other cooperative society to its membership. 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. 13. The contention of Ms. Dessai, learned Counsel for the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable on demand or otherwise and withdrawable by cheque, draft, order or otherwise and such acceptance of money is intended for the purpose of lending or investment by itself. Therefore, the crucial expression relevant for making one answer the description of banking is that it is capable of accepting money from the general public but not necessarily confined to its members. Any such activity carried on by an body requires, apart from licensing, to answer the regulatory domain prescribed under the 1949 Act. Even a Co-operative Bank which carries on banking activity requires to be regulated by the provisions of the 1949 Act. Section 80P(4) therefore is clearly attractive to such an institution. But not to credit society. Even while dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
