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TMI Blog2016 (12) TMI 1537X X X X Extracts X X X X X X X X Extracts X X X X ..... nate Bench in the case of M/s Jafari Momin Vikas Credit Co-op. Society Ltd. (2014 (1) TMI 481 - ITAT AHMEDABAD ), we find that provisions of section 80P(4) of the Act are not applicable to the assessee and is, therefore, eligible to claim deduction u/s 80P(2)(a)(i) of the Act. - Decided in favour of assessee - ITA No. 2941/Ahd/2013 - - - Dated:- 23-12-2016 - Shri R.P. Tolani, JM and Shri Manish Borad, AM. For The Appellant : Shri K. Madhusudan, Sr. DR For The Respondent : None ORDER PER Manish Borad, Accountant Member . This appeal by the Revenue for Asst. Year 2010-11 is directed against the order of ld. CIT(A), Gandhinagar, Ahmedabad, dated 20.09.2013 vide appeal no.CIT(A)/GNR/150/2012-13 arising out of the order u/s 143(3) of the IT Act, 1961 (in short the Act) framed on 30/11/2012 by ITO, Patan Ward-3, Mehsana. 2. None appeared on behalf of the assessee and the case was heard with the assistance of ld. DR and documents placed on record. Grounds of appeal raised by the Revenue are as under :- 1. The learned CIT(Appeals) has erred in law and on facts in holding that the assessee is entitled to the benefit u/s.80P(2)(a)(i) of the Act provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 65,09,757/- as that sect/on provide that 100% of profit from activity of providing credit facilities to members by co op societies is deductible u/s. 80-P of I. T. Act on following merits. 1.1 The provisions of Sec 80P(4) excludes only co op banks from the eligibility of deduction u/s. 80P(2)(a)(i) given to Co Op banks. This has been made clear in instruction F.NO.133/6/2007/TPL of CBDT dt.09-05-2007 which states that if co op society does not fall within meaning ofco op. bank defined in part V of Banking regulation act 1949, sub section (4) of section 80-P will not apply in its case. 1.2 We do not fall in definition of co op bank as per part V of banking regulation act as per reasoning mentioned here under. a. In part V of the banking regulation act 1949 in clause (cci) of section 56C it is stated that CO OPERA TIVE BANK means a State Co op. Bank, a Central co operative bank and a primary co operative bank. b. Co Op. credit society is neither a state Co Op bank nor a central co op. bank as per part V of Banking Regulation Act 1949. The detailed reasoning is enclosed. c As per definition of primary co operative bank as per clause (ccv)(i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciety Ltd. in JTA No.l069/Bang/2010 dated 08.04.2011 in which the A.O. had not allowed deduction u/s. 80P(2)(a)(i) of the Act. The ITAT Bangalore B Bench decided the appeal in favour of the assessee and against the revenue by observing at Para 9.3 on page 5 of the order which is reproduced as under. 19.5 If the intention of the legislature was not to grant deduction u/s, 80P(2)(a)(l) to co operative societies carrying on the business of providing credit facilities to its members, then this section would have been deleted. The new proviso to section 80P(4) which is brought into stature is applicable only to co operative banks and not to credit co operative societies The-intention of the legislature of bringing in co operative banks into the taxation structure was mainly to bring in par with commercial banks. Since the assessee is a co operative society and not a co operative bank, the provisions of section 80P(4) will not have application in the assessee's case and therefore, it is entitled to deduction u/s. 80P(2)(a)(i) of the Act. Hence, we are of the view that the order of the CTT(A) is correct and in accordance with law and no interference is called for 1.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are deductible. However, as per the provision of sub section (4) of the section 80P inserted by Finance Act, 2006 from Assessment Year 2007-08, the provision of section 80P shall not apply in relation to any cooperative bank other than a primary agricultural credit society or a primary cooperative agricultural and rural development bank. Further on going through the by-laws of the society, the purpose of the society is found as follows: 1. Create good relation between its members and increase zeal. 2. Collect funds and deposits from its members. 3. To give funds for business and other need to its members who are In need. 4. To provide goods for livelihood and house in concession rate to its members and do the work of production, purchase and sale. . 6. The reply filed by the assessee is duly considered. In view of the above discussion it is dear that the assessee society is a cooperative bank other than a primary agricultural credit society or a primary cooperative agricultural and rural development banks. Therefore, sub section (4) of section SOP is applicable to the assessee and deduction u/s.80P(2)(a)(i), is not an allowable deduction, hence the entire profit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be equivalent to taking deposits from members of the society only which has got a much restricted meaning and the relationship between a society and a public has, to be understood in a much larger sense. In this connection, it would1 be useful to refer to the decision of the Hon'ble Jurisdictional High Court wherein, their Lordships of Gujarat High Court have considered the above provisions of s. 80P(2)(a)(i) in the case of CIT vs Baroda Peoples Co-op. Bank Ltd 280 ITR 282 (Guj) . Their lordships have held at Para 28 of said judgment as under: 28. Section 80P(2)(a )(i) of the Act permits a co-operative society engaged in carrying on the business of banking or providing credit facilities to its members to claim deduction of the whole of the amount of profits and gains of business attributable to such activity viz., business of banking or providing credit facilities to its members. On a plain reading, it becomes apparent that the two activities are distinct and separate activities. The first activity viz., carrying on the business of banking connotes a larger activity than the activity of providing credit facilities to its members. The latter is restricted qua the ..... 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