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TMI Blog2016 (3) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... efits of deduction of income of co-operative society to the extent it is earned by providing credit facilities to its members. As at the time when effect has been given to the order of this Court, the authorities under Act would restrict the benefit of deduction under Section 80P of the Act only to the extent that the same is earned by the appellant in carrying on its business of providing credit facilities to its members. - Decided in favour of assessee. - ITA No. 439/PAN/2015, ITA Nos. 440 & 441/PAN/2015 - - - Dated:- 18-2-2016 - N. S. Saini, AM And George Mathan, JM For the Appellant : Shri R K Pikale, CA For the Respondent : Shri K Mehboob Ali Khan, DR ORDER Per George Mathan, Judicial Member These are the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction u/s.80P(2). On this issue, The Hon'ble High Court has decided as under: There is no dispute between the parties that the appellant is a co-operative society as the same is registered under the Co-operative 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 Section 80P(4) of the Act would not exclude the appellant from claiming the benefit of deduction under Section 80P(2)(a)(i) of the Act. However in terms of Section 80P of the Act the meaning of the words Cooperative Bank is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes 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 apellant 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 July, 2014. Before the Tribunal also the appellant did not dispute the fact that in a few cases they have dealt with non members. However so far as accepting deposits from non members is concerned it is submitted that the Bye-law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k. 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. 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 cooperative society as its member. In fact the bye-laws of the appellant society originally in bye-law 9(b) clearly provided that no co-operative society shall be admitted to 'the membership of the society. Thus there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perative 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. The contention of Ms. Dessai, learned Counsel for the revenue that the appellant is not entitled to the benefit of Section 80P (2)(a)(i) of the Act in view of the fact that it deals with non-member cannot be upheld. This for the reason that section 80P(1) of the Act restricts the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. We, therefore, do not find any good and justifiable reason to interfere with the orders of the Commissioner of Income Tax (Appeals), which are hereby confirmed and this ground of appeal of the Revenue is dismissed. 6. The another grievance of the Revenue, in all these appeals, is that the Commissioner of Income Tax (Appeals) erred in deleting the addition made under sec. 40(a)(ia) read with sec. 194A of the Act of ₹ 18,46,213/- in the Assessment Year 2009-10 and ₹ 6,71,791/- in the Assessment Year 2007-08 and ₹ 20,18,010/- in the Assessment Year 2008-09, when it has been clearly established that the assessee satisfies all the conditions of a Cooperative Bank as per sec. 5(ccv) of Part-V of the Banking Regulation Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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