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TMI Blog2019 (6) TMI 1293X X X X Extracts X X X X X X X X Extracts X X X X ..... bank, which is not eligible for deduction u/s 80P(2)(i) of the Income-tax Act, 1961." 3 "Whether on the facts and circumstances of the case and in law, the Ld. CJT(A) has erred in ignoring the fact that the facts of this case are different from the judgment of Hon'ble Bombay High Court in the case of Quepem Urban Cooperative Credit Society Vs. ACIT, dated 17.04.2015 (2015) 58 Taxmann.Com 11 3 (Bombay)." 4 "The appellant prays that the order of Ld. CIT(A) on the above grounds be set aside and that the Assessing Officer be restored." 5 The appellant craves leave to amend or to alter any ground or add a new ground, which may be necessary." 3. The brief facts of the case are that the assessee filed its return of income on 25.11.2014 declaring total income to the tune of Rs. Nil. The assessee claimed deduction under chapter VIA to the tune of Rs. 69,60,766/-. The case was selected for scrutiny under CASS. Thereafter, notices u/s 143(2) and 142(1) of the Act were issued and served upon the assessee. The assessee is a co-operative Credit Society and is in the business of collection of deposits and to provide credit facilities to its members for their welfare. The subscribe sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbers. The Co-Operative Banks have been defined in the Explanation to sub-section (4) to section 80P as under:- '80P(4)(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) 14. The Co-Operative Banks have been defined in the Part V of the BanKing Regulation Act, 1949 at section 56 (cci) as "Co-Operative Bank" means a state Co- Operative Bank, a Central Co-Operative Bank and a primary Co-Operative Bank. 15. Further the "Credit Co-Operative society" has been defined at section 56 (ccii) Banking Regulation Act, 1949, as a Co-Operative society, the primary object of which is to provide the financial accommodation to its members and includes a Co-Operative land mortgage bank. 16. It is clear from the above definition of Co-Operative Bank" and Credit Co- Operative society" as defined in the Part V of the Banking Regulation Act, 1949, that the "Co-Operative Bank" and "Credit Co-Operative Society" are two different institutions by virtue of their functions and the nature of activities being carried out by them. The very fact that the both the "Co-Operativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80P of the Act, and giving deduction thereunder, the word 'attributable' is much wider in impact than 'derived'. Its wide amplitude covers receipts from other activities related to the business of banking. If there is some commercial connection of the income with the said business/activity, it must be held as attributable to business. It would be sufficient for an appellant to establish a proximate connection between the income in question and the activity referred to in section 80P(2)(a)(i), to claim a deduction thereunder. 20. From the above, it is clear that legislature has used the words 'attributable' in the section 80P(2)(a)(i), which means that in the course of banking activity, if the society receives any income which is the outcome of the business of banking of such society, such an income is profits and gains of the business and therefore eligible for deduction under section 80P(2)(a)(i) and the principle is applicable in the case of the appellant society too. 21. The appellant is a Cooperative Credit Society and the sources of funds at it's disposal are from the deposits from its members and the appellant society in turn provides cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) unless they are declared a bank by the Reserve Bank of India. The extract of the judgment is as follows: "It is to be noticed that there is a seriously disputed question of fact which the Authorities under the IT Act have taken upon themselves to interpret in the face of the BR Act prescribing that in the event of a dispute as to the primary object or principal business of any co-operative society referred to in clauses (cciv), (ccv) and (ccvi) of Section 56 of the BR Act, a determination thereof by the Reserve Bank shall be final, would require the dispute to be resolved by the Reserve Bank of India, before the authorities could term the assessee as a co-operative bank, for purposes of Section 80P of the IT Act. Any opinion expressed therefore is tentative and is not final. The view expressed by this court, however, as to the assessee being a co-operative society and not a co-operative bank in terms of Section SOP (4) of the IT Act, shall hold the field and shall bind the authorities unless held otherwise by the Reserve Bank of India." Since the appellant is not recognized as Bank by the Reserve Bank of India, it cannot be treated as a Co-operative Bank. 25. Similar view h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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