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TMI Blog2016 (7) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is not a bank while deciding the issue of allowability of deduction under section 80P(2), the provisions of section 40(a)(ia) would not apply insofar as no TDS is liable to be made by the assessee. - Appeal of revenue dismissed. - ITA Nos. 47/PAN/2016 - - - Dated:- 21-7-2016 - SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER For the Appellant : Shri R.K. Pikale - CA. For the Respondent : Anand Shankar Marathe- DR ORDER PER GEORGE MATHAN, JUDICIAL MEMBER This is an appeal filed by the Revenue against the order of the Commissioner of Income Tax (Appeals), Panaji-1 in ITA Nos.445/CIT(A) PNJ-1/14-15, dated 30/11/2015. 2. The main issue involved in this appeal is that the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 meaning assigned to it in Chapter V of the Banking Regulation Act, 1949. A cooperative bank is defined in Section 5(cci) of Banking Regulation Act to mean a State Cooperative Bank-, a Central Cooperative Bank and a Primary Cooperative Bank. Admittedly, the appellant is not a State Cooperative Bank, a Central Cooperative Bank Thus what has to be examined is whether the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 43 only permits the society to accept deposits from its members. It is submitted that Bye .laws 43 does not permit receipt of deposits from persons other then members, the word any person is a gloss added in the impugned order as it is not found in Bye law 43. It is undisputed that the transactions with non members are insignificant/miniscule. On the above basis it cannot be conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 was a bar but the same was amended w.e.f. 12th January, 2001 as to permit a society to be admitted to the membership of the society. Therefore for the subject assessment years there is no prohibition to admitting a society to its membership and one of three cumulative conditions precedent to be a primary cooperative bank is not satisfied. However the impugned order construed the amended clause 9( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 benefits of deduction of income of co-operative society to the extent it is earned by providing credit facilities to its members. Therefore, to the extent the income earned is attributable to dealings with the non-members are concerned the benefit of Section 80P of the Act would not be available. In the above view of the matter, at the time when effect has been given to order of this Court, the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition made under sec. 40(a)(ia) read with sec. 194A of the Act of ₹96,38,099/- in the Assessment Year 2012-13, 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, 1949. 7. At the time of hearing, it is fairly agreed by both the parties that this issue was also squarely covered by the decision of the Coordinate Bench of this Tribunal in the case of Goa State Cooperative Housing Finance Federation Ltd. wherein it has been held that the assessee is not being treated as a bank and consequently, the provisions of section 40(a)(ia) does not apply. 8. We have considered the submissions. As we have already held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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