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TMI Blog2014 (4) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... ry co-operative agricultural and rural development bank. It is also not the claim of the Assessee that Assessee is a primary agricultural credit society. If we read both the sections, Sec. 80P(2)(a)(i) and Sec. 80P(4) together, we find that the provisions of Sec. 80P(4) mandates that the provisions of Sec. 80P will not apply to any co-operative bank other than a primary agricultural credit society or primary co-operative agricultural and rural development bank but as per the provisions of Sec. 80P(2)(a)(i), a co-operative society engaged in carrying on the business of banking or providing credit facilities to its members is entitled for deduction. Since the assessee is a primary co-operative bank, therefore in our opinion the assessee is hit by the provision of section 80P(4) and assessee will not be entitled for deduction u/s 80P(2)(a)(i). As gone through the order of this tribunal for the assessment year 2006-07. We noted that this decision will not assist the assessee as there was no section 80P(4) there during the impugned assessment year. This section has been inserted w.e.f. 1.4.2007 Sec. 80P(2)(a)(i) it is apparent that if the co-operative society is engaged in carryin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HON BLE JUDICIAL MEMBER Assessee by : Shri B. Barthakur, Ld. DR Revenue by : Shri Prakash G. Ghali, C.A. Shri Praveen P. Ghali, C.A. ORDER PER P.K. BANSAL All the three appeals have been filed by the revenue while C.O filed against the order of CIT(A), Belgaum dtd. 26.2.2013 for the assessment years 2007-08, 2008-09 and 2009-10.The revenue has taken the following common effective grounds of appeal in each of the assessment years :- 1. The Learned CIT(Appeals) erred in law and on facts in not considering the fact that the byelaws of the assessee society prohibits membership from the person other than a farmer (agriculturist) or worker since the society is formed with he objectives for providing credit facilities to its members, supply of agriculture implements, seeds, fertilizers, consumer goods to its members who are farmers and workers. 2. The Learned CIT(Appeals) erred in law and on facts in not appreciating the fact that the assessee society being a credit co-operative society engaged in providing credit facilities to its members (i.e. farmer and workers) can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee filed the details submission and accepted that the assessee society was registered as a primary agricultural credit society and it was engaged in providing credit facilities to its members but as per Karnataka Govt. order dated 11.12.1996 the credit society was converted into primary agricultural krishi seva sahakari bank and new certificate dated 8.9.1997 was issued with the new bye-laws. As per the bye-law 10 the bank is authorised to operate and collect current account and savings account deposits, fixed deposits, pigmy deposits, recurring deposits etc. The object of the bank is included advancing of the short term medium term and long term loans and loss on security of gold and silver articles. The bank is also providing safe deposit locker facilities. Thus the society was converted into a co-operative bank. The CIT(A) allowed the deduction to the assessee u/s 80P(2)(a)(i) towards the interest received by the society from Vishwanath Sugars Ltd which is a nominal member of the aforesaid co-operative society. The revenue went in appeal before ITAT. ITAT set aside the matter to the file of the CIT(A) so far it relate to deduction u/s 80P. The ITAT upheld the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to in sub-section (1) shall be the following, namely :- (a) in the case of a co-operative society engaged in- (i) carrying on the business of banking or providing credit facilities to its members, or the whole of the amount of profits and gains of business attributable to any one or more of such activities. 80P(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 (10 of 1949); (b) primary co-operative agricultural and rural development bank means a society having its area of operation confined to a taluka and the principal object of which is to provide for long-term credit for agricultural and rural development activities. 5.1 From the plain reading of Sec. 80P(2)(a)(i) it is apparent that if the co-operative society i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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