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TMI Blog2018 (7) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... Mahesh R. Uppin; Mr. N.Shankaranarayana Bhat, Advs., Mr. Tata Krishna, Adv. for Mr. Chythanya, Adv., and Mr. A.Shankar & Mr. Lava, Advs. for Respondents/Assessees JUDGMENT The Revenue has preferred these Appeals under Section 260A of the Income Tax Act, 1961 ('Act' for short). 2. The substantial questions of law framed in the memorandum of appeal arising out of the common order passed by the Income Tax Appellate Tribunal, Panaji Bench, Panaji, relating to the different assesses- respondents herein for the assessment year 2013-14 are identical, as such these appeals are disposed of by the common judgment. The substantial questions of law suggested by the revenue and considered by us are extracted here under: "1. Whether on the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has clearly stated that the assessee is a Co- operative society and has not obtained any banking license. The business of the assessee is to provide credit facilities to its members. Since the assessee cannot carry on any banking business, the interest on investment is taxable as income from other source. Therefore, the aforesaid facts, which is not in dispute clearly establishes that it is not a Co-operative Bank. In fact, the Revisional Authority also in its order has categorically stated that the assessee is a Co-operative society, which provides credit facilities. Section 80P of the Act deals with the deduction of income of a society. In the case of any assessee being a Co-operative society, the whole of the amounts of profits and gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rural development bank. The Legislature did not want to deny the said benefits to a primary agricultural credit society or a primary co-operative agricultural and rural development bank. They did not want to extend the said benefit to a Co-operative bank which is exclusively carrying on banking business i.e. the purport of this amendment. Therefore, as the assessee is not a Co- operative bank carrying on exclusively banking business and as it does not possess a licence from Reserve Bank of India to carry on business, it is not a Co-operative bank. It is a Co-operative 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rary decision was brought to our notice. We further noted that the issue has been considered in ITA No.31/Panji/2017 in case of Shri Basveshwar Pattin Souhard Sahakari Niyamit Vs. ITO in order dated 15/06/2017 wherein it has been noted that the Hon'ble Karnataka High Court has considered the decision of the Apex Court relied upon by the AO in the decision rendered in the case of M/s Totgar's Cooperatives Sales Society Ltd. Vs. ITO. Accordingly in the facts as the stand in the case of these respective cooperative societies which have been noticed to be admittedly engaged in the activity of accepting deposits and providing credit facility to its members, interest received from the banks on the surplus money kept in fixed deposits has been hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act the meaning of the words Co- operative Bank is the meaning assigned to it in Chapter V of the Banking Regulation Act, 1949. A Co-Operative bank is defined in Section 5(ccl) of Banking Regulation Act to mean a State Co-operative bank, a Central Co- operative Bank and a primary co- operative bank. Admittedly, the appellant is not a State Co-operative Bank, a Central Co-operative Bank. Thus what has to be examined is whether the appellant is a primary Co-operative Bank as defined in Para V of the Banking Regulation Act. Section 5(ccv) of the Banking Regulation Act defines primary Co-operative Bank to mean a Co- operative Society which cumulatively satisfies the following three conditions: 1) Its principal business or primar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. The contention of Ms. A. Desai, learned counsel appearing for the appellant that in view of the definition of the word "income" 'as provided in Section 2(24) (vila), the respondents' Societies are to be treated as a Bank cannot be accepted. This aspect has also been taken note by the Division Bench while disposing of the said appeals in the case of M/s. The Quepem Urban Co-Operative Credit Society Ltd.,(Supra). 8. Taking note of the observations in the said judgment in the case of M/s. The Quepem Urban Co-operative Credit Society Ltd., (Supra) to the effect that merely giving credit facilities to the members would not be co-operative Bank but continued to be a Co-operative Society and as there is no material on record that the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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