9911796707
TMI Blog2024 (5) TMI 1568X X X X Extracts X X X X X X X X Extracts X X X X ..... e case and in Law, the Ld. CIT(A) has erred in allowing deduction of Rs. 4,04,48,874/- under section 80P of the Income-tax Act, 1961 to the assessee by holding that the assessee is a Co-operative Society and not a Co- operative Bank and it is entitled for deduction under section 80P of the I.T. Act, 1961. 2. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the deduction u/s 80P(2)(d) of the Act on interest income earned from Co- operative bank treating the Co-operative bank as Cooperative society also, ignoring the fact that Co-operative Society and Cooperative bank are distinct entity and it is essential for a co-operative society to loose its status as a Co-operative society so as to turn into a co- operative bank and to acquire license from the RBI so as to conduct banking business." ITA no. 165/MUM/2024 "1. Whether On the facts and in the circumstances of the case and in Law, the Ld. CIT(A) has erred in allowing deduction of Rs. 3,24,29,433/- under section 80P of the Income-tax Act, 1961 to the assessee by holding that the assessee is a Co-operative Society and not a Co-operative Bank and it is entitled for deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable law. The observations and findings by the coordinate bench in the said order are reproduced for ease of reference: "5. We have heard the rival contentions and perused the material on record. We have given our thoughtful considerations to the submissions made before us and various judicial precedents relied upon as discussed above including those in the case of assessee itself dealing with the issue before us. Admittedly, it is a fact on record that assessee does not hold banking license issued by Reserve Bank of India which is a necessary requirement for doing banking business. Assessee is a credit cooperative society providing credit facilities to its members from the deposits collected by it from its members. The credit activities undertaken by the assessee carry attributes of banking but for this sole reason assessee cannot be held to be doing banking business within the meaning of Banking Regulation Act, 1949 as applicable to cooperative banks. In this respect, it is worthwhile to take note of the difference in cooperative societies and cooperative banks explained elaborately by the Co-ordinate bench of ITAT, Mumbai in the case of ITO vs. Kulswami Cooperative Societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of control and supervision of Cooperative Societies. Reserve Bank of India has vested with statutory powers of control and supervision of Cooperative Banks. 6. Furthermore, in assessee's own case (supra), the coordinate bench has held that assessee is a cooperative credit society eligible for benefit of deduction u/s. 80P(2)(a)(i) and that Section 80P(4) restricting the benefit of deduction does not apply to the assessee since it is neither a cooperative bank nor a cooperative society holding license from RBI for banking business. Also, with detailed exposition on the issue in hand by the Hon'ble Supreme Court in the case of The Mavilayi Service Cooperative Bank (Supra) and Kerala State Cooperative Agricultural and Rural Development Bank (Supra) we do not find any reason to interfere with the well analysed and elaborate finding arrived at by the ld. CIT(A) in allowing the grounds raised by the assessee on this issue. Accordingly, ground no. 1 and 3 of the Revenue are dismissed. 7. Having held that assessee is a credit cooperative society and not a cooperative bank within the meaning of Banking Regulation Act, 1949, provisions of Section 36(1)(viia) of the Act do not apply in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enus, whereas the word 'cooperative bank' is a word of limited extent, which merely de-markets and identifies a particular species of the genus 'cooperative societies'. Thus, a cooperative bank is merely a variety of the cooperative societies which can be of a different nature and can be involved in different activities. 7. We are of the considered view, that though the co-operative bank pursuant to the insertion of Sub-section (4) of Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but however, since a co-operative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being enforced in any state for the registration of cooperative societies, therefore, the interest income derived by a cooperative society from its investments held with a co-operative bank, would be entitled for claim of deduction under Sec. 80P(2)(d) of the Act. 8. We also find that the issue before us of whether a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) for the interest income derived from its investments held with a cooperative bank or not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
