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TMI Blog2015 (10) TMI 2437X X X X Extracts X X X X X X X X Extracts X X X X ..... . 80P(2)(a)(i) to the assessee ignoring the fact that the assessee is a cooperative society which carries on banking business, and hence a primary cooperative bank as per sec. 5(ccv) of the Banking Regulation Act, 1949. 3. The facts as stated by the Assessing Officer in his order are that the assessee is a cooperative society registered under the Goa Cooperative Societies Act. The main object of the society was to accept the deposits and provide financial accommodation to the members of the society. According to the Assessing Officer, after insertion of clause (viia) to sec. 2(24) w.e.f. 01/04/2007, 'income' includes the profit and gains of any business of banking (including providing credit facilities) carried in by such cooperati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent bank. The Legislature did not want to deny the said benefits to a primary agricultural credit bank. They did not want to extend the said benefit to a Co-operative bank which is exclusively carrying on banking business that is the purport of this amendment. Therefore, as the assessee is not a Cooperative bank earning on exclusively banking business and as it does not possess a licence from Reserve Bank of India to earn on business, it is not a Co-operative bank. It is a Cooperative society which also carries on the business of lending money to its members which is covered under Section 80P(2)(a)(i) i.e. carrying on the business of banking for providing credit facilities to its members. The object of the aforesaid amendment is not to excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding providing credit facilities) carried on by such cooperative society with its members comes within the definition of income. Thus, as per sec. 80P(4) read with sec. 2(24)(viia) the assessee-cooperative society is held to be a primary cooperative bank and hence, not eligible for deduction in view of the provisions of sec. sec. 80P. 8. On appeal, Commissioner of Income Tax (Appeals) has allowed the claim of the assessee by following the decision of the Hon'ble Karnataka High Court in the case of Shri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Bagalkot (supra), wherein it was held that where the assessee is not a Cooperative bank earning on exclusively banking business and as it does not possess a licence from Reserve Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X
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