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TMI Blog2012 (11) TMI 1223X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O disallowed the deduction of Rs. 50,43,534/- claimed by the assessee u/s. 80P(2)(a)(i) of the Act. The A.O. rejected the claim of the assessee u/s. 80P by giving the following reasons : "(1) The appellant credit co-operative is a primary co-operative bank as per explanation below sub-section 4 of section 80P and hence not eligible to claim deduction u/s. 80P(2)(a)(i) of the I.T. Act. (2) The clause (viia) inserted in section 2(24) by the Finance Act, 2006 to provide that the profits and gains of business of banking includes income of credit co-operative societies from providing credit facilities to its members. (3) The amendment to section 80(4) by Finance Act, 2006 provides that the provisions of section 80P shall not apply in realation to cooperative bank other than primary agricultural credit society and primary co-operative agricultural and rural development bank. (4) The explanation to section 80P(4) laid down that a "co-operative bank" shall have the meaning assigned to it in part-V of the Banking Regulation Act, 1949. (5) As per clarification issued by CBDT in F.No.133/06/2007-TPL vide letter dated 09/05/2008, co-operative bank shall have the meaning assig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Act, 2006 w.e.f. 01/04/2007. The relevant portion of amended section 80P(4) reads as under - "4. The provisions of this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. Explanation- For the purposes of this sub-section,- (a) "co-operative bank" and "primary agricultural credit society" shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (30 of 1949) (b) ...." 7.1 In view of the above explanation, the co-operative bank shall have the meaning stated in part V of the Banking Regulation Act, -"co-operatve bank" means a State Co-operative Bank, a Central Cooperative and a Primary Co-operative Bank. 7.2 In view of the above provision in part-V of the Banking Regulation Act, 1949 it is clear that co-operative society is not regarded as "cooperative bank". Further, it has also been laid down in section 56(ccii) in part-5 of Banking Regulation Act, that "Co-operative Credit Society" means a co-operative society, the primary object of which is to provide financial accommodation to its members and include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this appeal is squarely covered in favour of the assessee by the decision of ITAT "B" Bench, Pune in the case of ITO Vs. Jan Kalyan Nagari Sahakari Pat Sanstha Ltd., Order dated 26th June 2012. 6. In the case of Jan Kalyan Nagari Sahakari Pat Sanstha Ltd. (Supra), the Tribunal has considered the implication of insertion of Sub-sec. (4) to Sec. 80-P on the Credit Co-operative Societies and has held as under : "4. We have heard the rival submissions of the parties and perused the records. In this case, as per the facts on record, the assessee is a Cooperative Credit Society. Section 80P has undergone an amendment w.e.f. 1.4.2007 by insertion of Sub-sec. (4) which reads as under : "(4) The provisions of this section shall not apply in relation to any cooperative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. Explanation - For the purpose of this sub-section,- (a) "co-operative bank" and "primary agricultural credit society" shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (10 of 1949); (b) "primary co-operative agricultural and rural development ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk is treated as Co-Operative Bank in view of Cl. (cci) of sec 5 of the B. R. Act, 1949. Definition of 'Primary Co-operative Bank is given in cl. (ccv) of sec. 5 of B. R. Act, 1949, which reads as under; ' Primary co-operative bank means a co-operative society other than a primary agricultural credit society - (i) The primary object or principal business of which is the transactions of banking business; (ii) The paid-up share capital and reserves of which are not less than one lack of rupees; and a. The by-laws of which do not permit admission of any other cooperative society as a member: Provided that this sub-clause shall not apply to the admission of cooperative bank as a member by reason of such co-operative bank subscribing to share capital of such co-operative society out of funds provided by State Government for the purpose." On careful perusal of above definition it is seen that basic mandate any co-operative society to cover in definition of ' Primary Co-Operative Bank' is that it's primary object or principal business should be transactions of banking business. The term 'banking' is defined in B. R. Act and as per said definition there is no restriction that dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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