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TMI Blog2017 (8) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer is that the activities of credit society are akin to a society carrying on banking business. In my considered opinion, it is a complete misnomer on the part of the Assessing Officer to treat the assessee as a co-operative bank within the meaning of Sec. 80P(4) of the Act without establishing that the assessee is a co-operative bank in the eyes of law. Therefore, the CIT(A) made no mistake in allowing the claim of assessee for exemption u/s 80P(2)(a)(i) of the Act and accordingly, Revenue fails in this aspect. Claim for exemption u/s 80P(2)(d) with respect to interest on deposits with other co-operative banks - Held that:- In view of the clear phraseology of Sec. 80P(2)(d) of the Act and the judgment of the Hon'ble Karnataka High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 334/- and interest on fixed deposit with bank ₹ 20,58,272/-. It was also noticed by the Assessing Officer that on the expenditure side, the major expenditure was on account of interest paid of ₹ 48,27,784/-. In this manner, the net income earned by the assessee was claimed as exempt u/s 80P(2)(a)(i) of the Act. The Assessing Officer was of the view that assessee was carrying on the activity of accepting deposits and extending loan facilities, an activity which was akin to the business of banking. Therefore, according to the Assessing Officer, assessee was to be understood as a co-operative bank and because of Sec. 80P(4) of the Act, exemption u/s 80P(2)(a)(i) of the Act was not available to the assessee. As a consequence, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income was earned on deposits with other co-operative banks and was, therefore, specifically exempt in terms of Sec. 80P(2)(d) of the Act apart from being subsumed in the income eligible for exemption u/s 80P(2)(a)(i) of the Act. Be that as it may, the CIT(A) noted that the Ahmedabad Bench of the Tribunal in the case of SBI Employees Co-operative Credit Society Ltd., (2015) 57 taxman.com 367 dated 26.3.2015 had ruled that interest income from bank was not eligible for benefit of Sec. 80P(2)(d) of the Act. Against such a decision, assessee is in appeal before the Tribunal. 5. In this background, the cross-appeals have been heard together and a consolidated order is being passed for the sake of convenience and brevity. 6. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the business of providing credit facilities to its members, and not the business of banking. Factually speaking, I find no infirmity in the claim of the assessee inasmuch as there is no case made out by the Assessing Officer that the assessee society has a banking licence to carry on business of banking. The only point made out by the Assessing Officer is that the activities of credit society are akin to a society carrying on banking business. In my considered opinion, it is a complete misnomer on the part of the Assessing Officer to treat the assessee as a co-operative bank within the meaning of Sec. 80P(4) of the Act without establishing that the assessee is a co-operative bank in the eyes of law. Therefore, in my view, the CIT(A) made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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