ITO-26(2)(5), Mumbai V. M/S RAMARAJA KSHATRIYA CO-OP CREDIT SOC. LTD., Mumbai

ITA 4896/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3411 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 23-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANIL TOPIWALA
• Keywords: Co-operative Credit Society; Set aside
• Section: 80P; 113; 56

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 4896/MUM/2019 (ASSESSMENT YEAR 2014-15) I.T.A. NO. 4897/MUM/2019 (ASSESSMENT YEAR 2015-16 ) ITO-26(2)(5) ROOM NO. 319 3 RD FLOOR KAUTILYA BHAWAN BANDRA KURLA COMPLEX BANDRA EAST MUMBAI-400 051. VS. M/S. RAMARAJA KSHATRIYA COOPERATIVE CREDIT SOCIETY LIMITED 04, GROUND FLOOR KAVERI COMPLEX KURLA PIPELINE ROAD PRABHAT WADI, SAKI NAKA MUMBAI-400 072. PAN : AAAAR9632A ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI ANIL TOPIWALA DEPARTMENT BY SHRI BHARAT ANDHLE DATE OF HEARING 09.03.2021 DATE OF PRONOUNCEMENT 11 .03.2021 O R D E R PER SHAMIM YAHYA (AM) :- THESE ARE APPEALS BY THE REVENUE AGAINST RESPECTI VE ORDERS OF LEARNED CIT(A) FOR A.Y. 2014-15 & 2015-16. 2. THE COMMON ISSUES RAISED READ AS UNDER :- 1. 'WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE ASSESSEE'S CLAIM FO R DEDUCTION U/S. 80P(2)(D) OF THE I.T. ACT, 1961 DISREGARDING THE PRO VISIONS OF SECTION 80P(4) OF THE ACT,1961.' 2. ' WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT CO-OPERATIV E BANKS ARE CO- OPERATIVE SOCIETIES AND AS SUCH THE ASSESSEE IS ENTIT LED TO CLAIM INTEREST EARNED FROM DEPOSIT KEPT WITH CO-OPERATIVE BANKS AS A DEDUCTION U/S. 80P(2)(D) OF THE ACT, 1961.' 3. ' THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTOR ED.' 3. SINCE FACTS ARE SIMILAR WE ARE REFERRING TO THE ORDER OF A.Y. 2014-15. M/S. RAMARAJA KSHATRIYA COOPERATIVE CREDIT SOCIETY LIMITED 2 4. BRIEF FACTS ARE THAT THE ASSESSING OFFICER DISAL LOWED THE DEDUCTION U/S. 80P(2D) OF THE I.T. ACT BY HOLDING THAT THE ASSESSE E WAS A COOPERATIVE BANK AS PER SECTION 80P(4). HE CONCLUDED AS UNDER :- (L) ON PERUSAL OF THE BALANCE SHEET AS ON 31.03.2014 , IT IS SEEN THAT THE MAJOR ITEM ON THE LIABILITY SIDE IS A FIGURE OF RS. 26.20 CRORES REFLECTED AGAINST THE HEAD DEPOSITS'. ON THE ASSET SIDE, THE MAJOR ITEM I S RS.31.42 CRORES SHOWN AGAINST THE HEAD 'LOAN AND ADVANCES'. FROM THES E, IT IS CRYSTAL CLEAR THAT THE ASSESSEE ON THE ONE HAND ACCEPTS DEPOSITS FROM THE MEMBERS FOR WHICH INTEREST IS PAID TO THEM ON THE OTHER HAND, IT AD VANCES LOANS OUT OF THESE DEPOSITS ETC. TO THE NEEDY MEMBERS FROM WHOM INT EREST IS RECEIVED AT A HIGHER RATE. THESE ARE THE SILENT FEATURES OF A BUSIN ESS ACTIVITY AND THAT BUSINESS IS NOTHING BUT 'BANKING BUSINESS. (2) FURTHER, PERUSAL OF THE BALANCE SHEET AS ON 31.0 3.2014 OF THE ASSESSEE REVEALS UNCLAIMED DIVIDEND OF RS.1,47,919/-. THE DE CLARATION OF DIVIDEND IS AN ATTRIBUTE OF A BUSINESS WHEREIN PROFIT HAS BEEN DER IVED ALMOST EVERY YEAR, OUT OF WHICH THERE WAS DECLARATION OF DIVIDEND, PART OF WHICH IS APPEARING IN BALANCE SHEET AS UNCLAIMED IN LAST FEW YEARS. THIS IS ALSO A CHARACTERISTIC OF THE BUSINESS ACTIVITY. (3) FROM THE BALANCE SHEET OF THE ASSESSEE AS ON 31.0 3.2014, IT IS FURTHER SEEN THAT A RESERVE HAS BEEN CREATED FOR 'BAD AND DOU BTFUL DEBTS' OF RS.41,00,000/-. THE CREDIT BALANCE IN THAT RESERVE W AS RS. 35,00,000/- FOR THE IMMEDIATELY PRECEDING FINANCIAL YEAR. THIS IS AN OTHER SALIENT FEATURE OF A BUSINESS CARRIED ON BY THE ASSESSEE. FROM THE ABOVE, IT IS ABUNDANTLY CLEAR THAT WHAT THE ASS ESSEE CARRIED ON, IS NOTHING ELSE THAN THE BANKING BUSINESS. TO HOLD THAT I T IS BANKING BUSINESS, ONE NEED NOT NECESSARILY CARRY ON A FULL-FLEDGED BAN KING BUSINESS WITH A LICENCE FROM THE CONCERNED AUTHORITIES. THAT IS IT IS N OT ESSENTIAL TO SATISFY EACH AND EVERY REQUIREMENT OF A BANK ENGAGED IN BANK ING BUSINESS. FURTHER, FROM THE BALANCE SHEET OF THE ASSESSEE, IT IS SEEN THAT AUTHORISED SHARE CAPITAL IS RS.15 CRORES WHILE THE ISSUED AND SU BSCRIBED SHARE CAPITAL STANDS AT RS.3,55,77,030/- AS ON 31.03.2014. FURTHER, THE RESERVE FUND OF THE ASSESSEE SHOWS A CREDIT BALANCE OF RS. 4.12 CRORES AS ON 31.-03.2014. IN THIS BACKGROUND, IT NEEDS TO BE SEEN WHETHER THE ASSES SEE IS A BANKING INSTITUTION ENGAGED IN BANKING ACTIVITY. FOR THIS, A REFERENCE MAY BE MADE TO THE RELEVANT PROVISIONS OF THE BANKING REGULATION ACT, 1949 (REPRODUCED IN PARA 5 ABOVE). ACCORDING TO SECTION 5(CCII), 5(CCV) A ND 5(CCVI) OF BANKING REGULATION ACT, WHERE PRINCIPAL BUSINESS OF A PRIMARY CREDIT SOCIETY IS THE TRANSACTION OF BANKING BUSINESS AND ITS PAID UP CAPITAL AND RESERVES ATTAINED THE LEVEL OF RS.L LAKH, THAT PRIMARY CREDIT SOCIETY AUTO MATICALLY BECOMES A PRIMARY CO-OPERATIVE BANK. FURTHER, ITS BANKING BUSI NESS ACTIVITY IS CARRIED ON IN THE CITY / SUBURB OF MUMBAI. M/S. RAMARAJA KSHATRIYA COOPERATIVE CREDIT SOCIETY LIMITED 3 5.7 OVER AND ABOVE ALL THESE, AS PER THE BANKING REG ULATION ACT, 1949, THERE ARE THREE BASIC TESTS FOR JUDGING WHETHER A GIVEN CO OPERATIVE CREDIT SOCIETY/PATPEDHI IS A COOPERATIVE BANK OR NOT. FIRSTLY, THE PRIMARY OBJECT OR PRINCIPAL BUSINESS TR ANSACTED SHOULD BE BANKING BUSINESS. SECONDLY, THE PAID UP SHARE CAPITA L AND RESERVE SHOULD BE RS. ONE LAKH OR MORE. THIRDLY, BY A MEMBER, IF THESE CONDITIONS ARE FULFILLED, THE COOPERATIVE CREDIT SOCIETY WILL BE REGARDED TO BE PRIMARY CO-OPERATIVE BANK. IN THE PRESENT CASE, FIRST TWO CONDITIONS ARE S ATISFIED AND THE ASSESSEE IS TO BE REGARDED AS A PRIMARY COOPERATIVE BANK. YET ANOTHER ASPECT CONCERNING THE ISSUE IS THAT THE DECIS ION OF HON'BLE KARNATAKA HIGH COURT IN CIT, BELGAUM VS. BAFLUR SURU BASAV PATHINAI SAHAKARI'SANGH NIYAM ST, BAGALKOT IN FAVOUR OF THE AS SESSEE HAS BEEN CHALLENGED BY THE DEPARTMENT AND AN STP AGAINST THAT DE CISION HAS BEEN ADMITTED BY HON'BLE APEX COURT ON 06.07.2015 (2015)( 62 TAXRNAN.COM 216(SC). THE SAME IS PENDING. SIMILARLY, THE DEPARTMENT HAS FILED SLR AGAINST THE D ECISION OF HON'BLE MUMBAI HIGH COURT IN ; CASE OF GUPEM URBAN C-OPERAT IVE CREDIT SOCIETY LTD. VS. ACIT [2015] 58 TAXMAN.COM 113 (BOMBAY), WHICH HA S BEEN ADMITTED VIDE ORDER NO.CC NO.17&85/20I5 DATED OS. 10.2015 AND IS PENDING. 5.8 ALTHOUGH THE ASSESSEE'S REPRESENTATIVE HAS CITED S OME DECISIONS OF HON'BLE COURTS OF OTHER STATES, IT IS NOT KNOWN WHETHER THOSE HAVE BEEN ACCEPTED BY THE DEPARTMENT. HENCE, WITH DUE RESPECT TO THOSE DECISIONS, THE SAME RE NOT -FOLLOWED IN -THIS ORDER. 5.9. TO SUM UP, VIEWED AGAINST THE BACKDROP OF THE FOREGOING D ISCUSSION, AND THE EMERGING POSITION, THE EXPLANATIONS FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS ARE DEVOID O/MERIT. AFTER CAREFUL CONSIDERATION, THE AO HELD THAT THE ASSESSEE'S CASE F ALLS WITHIN THE MISCHIEF OF SUB-SECTION (4) OF SECTION SOP AND THEREFORE, THE DEDUCTION CLAIMED OF RS.1,69,20,631/- U/S. 80P(2) IS HEREBY DISALLOWED P ENALTY PROCEEDINGS U/S.271(L)(C) OF THE I. T. ACT, 1961 IS HEREBY INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 4. UPON ASSESSEES APPEAL LEARNED CIT(A) DELETED TH E DISALLOWANCE HOLDING THAT THE WAS NOT A COOPERATIVE BANK. THE LEARNED CI T(A) HELD AS UNDER :- 7. I HAVE CONSIDERED THE FACTS OF THE CASE, ORAL CON TENTIONS AND WRITTEN SUBMISSIONS OF THE APPELLANT AS AGAINST THE OBSERVATION S/FINDINGS OF THE AO IN THE ASSESSMENT ORDER. THE CONTENTIONS/SUBMISSIONS O F THE APPELLANT ARE BEING DISCUSSED AND DECIDED AS UNDER:- 7.1 A CAREFUL AND CONSIDERATE PERUSAL OF THE GROUN DS OF APPEAL REVEALED THAT THE ESSENCE OF THE MERITS OF THE PRESENT APPEAL IS THAT THE APPELLANT IS AGGRIEVED BY THE ACTION OF THE AO IN REFUSING TO GRAN T THE DEDUCTION U/S.80P(2)(A)(I) TO THE TUNE OF RS.1,69,20,631/-. THI S HAS BEEN CHALLENGED VIDE GROUNDS 3.2 TO 3.4 WHICH SHALL BE ADJUDICATED TOG ETHER. M/S. RAMARAJA KSHATRIYA COOPERATIVE CREDIT SOCIETY LIMITED 4 7.2 I HAVE VERY CAREFULLY PERUSED THE IMPUGNED ORDER , THE ENTIRE RELEVANT FACTS AND CIRCUMSTANCES OF THE MATTER AND THE SUBMISSIO NS OF THE LD. AR, AS WELL AS THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY HIM. I HAVE ALSO PERUSED WITH CIRCUMSPECTION, THE PERTINENT DETAILS AND MATERIALS ON RECORD. 7.3 ON THIS ENTIRE ISSUE, IT IS PERTINENT TO MENTION TH AT THE ACTIVITIES MENTIONED IN SECTION 80P(2)(A)(I) ARE A CO-OPERATIVE SOCIETY ENGAGED IN CARRYING ON BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS'. AS PER SECTION 80P(4), THE PROVISIONS OF SECTION SOP SHALL NOT APPLY IN RELATION TO ANY CO-OPERATIVE BANK. THEREFORE, EVEN AFT ER THE INSERTION OF SEC. 80P(4), THE CO-OPERATIVE SOCIETY ENGAGED IN PROVIDIN G CREDIT FACILITIES TO ITS MEMBERS CONTINUED TO BE ENTITLED FOR DEDUCTION U/S 8 0P(2)(A)(I). THERE IS NO PROHIBITION U/S. SOP NOT TO ALLOW DEDUCTION TO SUCH CO -OPERATIVE SOCIETIES IN RESPECT OF BUSINESS RELATING TO ITS MEMBERS. 7.4 FURTHER, IT IS TO BE NOTED THAT THE BANKING BUSINESS H AS BEEN DEFINED UNDER SECTION 5(B) OF THE BANKING REGULATION ACT, 1949 IN THE FOLLOWING MANNER: 'BANKING' MEANS THE ACCEPTING, FOR THE PURPOSE OF LEND ING OR INVESTMENT, OF DEPOSITS OF MONEY FROM THE PUBLIC, RE PAYABLE ON DEMAND OR OTHERWISE, AND WITHDRAWAL BY CHEQUE, DRAFT , ORDER OR OTHERWISE. 7.5 THE BANKING REGULATION ACT, 1949 DEFINES A CO-OPE RATIVE BANK IN CL. (CCI) OF SEC. 5 (AS INSERTED BY SEC. 56 OF THE SAID ACT) AND CO-OPERATIVE CREDIT SOCIETY IS NOT INCLUDED BUT ITS IDENTITY IS KEPT SEPA RATE BY WAY OF INDEPENDENT DEFINITION IN CLAUSE (CCII) OF SEC. 5 OF THE BANKING REGULATION ACT WHICH IS REPRODUCED AS UNDER: (CCI) 'CO-OPERATIVE BANK' MEANS A STATE CO-OPERATIVE BANK, A CENTRAL CO-OPERATIVE BANK AND A PRIMARY CO-OPERATIVE BANK (CCII) 'CO-OPERATIVE CREDIT SOCIETY' MEANS A CO-OPERATI VE SOCIETY, THE PRIMARY OBJECT OF WHICH IS TO PROVIDE FINANCIAL ACCO MMODATION TO ITS MEMBERS AND INCLUDES A CO-OPERATIVE LAND MORTGAGE BA NK; ' 7.6 ON PLAIN READING OF THE BANKING REGULATION ACT, 1 949, NOWHERE IT IS SUGGESTED THAT THE TERM 'CO-OPERATIVE BANK' ALSO INCLU DES 'CO-OPERATIVE CREDIT SOCIETY'. FURTHER, THE PRIMARY CO-OPERATIVE BA NK IS DEFINED IN CL. (CCV) OF SEC. 5 OF THE BANKING REGULATION ACT 1949 AS UNDE R: '(CCV) 'PRIMARY CO-OPERATIVE BANK' MEANS A CO-OPERATIV E SOCIETY, OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY I) THE PRIMARY OBJECT OR PRINCIPAL BUSINESS OF WH ICH IS TRANSACTION OF BANKING BUSINESS: II) THE PAID-UP SHARE CAPITAL AND RESERVES OF WHICH A RE NOT LESS THAN ONE LAKH OF RUPEES: AND M/S. RAMARAJA KSHATRIYA COOPERATIVE CREDIT SOCIETY LIMITED 5 III) THE BYE-LAWS OF WHICH DO NOT PERMIT ADMISSION OF ANY OTHER CO- OPERATIVE SOCIETY AS A MEMBER: 7.7 THEREFORE, GOING BY THE DEFINITION OF 'BANKING', 'CO-OPERATIVE BANK' AND 'PRIMARY COOPERATIVE BANK AS MENTIONED ABOVE, IF A C O-OPERATIVE SOCIETY IS NOT ALLOWED TO ACCEPT DEPOSITS OF MONEY FROM THE PUBLIC FOR THE PURPOSE OF LENDING OR INVESTMENT, IT CANNOT BE SAID THAT THE PRIME OBJECT OR PRINCIPAL BUSINESS OF THE APPELLANT IS BANKING BUSINESS. HENCE , IT WILL NOT BE A PRIMARY CO-OPERATIVE BANK AND CONSEQUENTLY NOT A CO-OPERATI VE BANK. 7.8 IN THIS REGARD, I ALSO FIND THAT THE CASE OF THE APPELLANT, INTER-ALIA, IS COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH C OURT IN THE CASE OF QUEPEM URBAN CO-OPERATIVE CREDIT SOCIETY LTD. VS. AC IT [2015] 58 TAXMANN.COM 133 (BOM): [2015] 377 ITR 272 (BOMBAY), DECIDED ON 17.04.2015 WHEREIN IT IS HELD THAT THE ASSESSEE CANNOT BE CONSIDERED AS A CO- OPERATIVE BANK FOR THE PURPOSES OF SECTION 80P(4) OF TH E ACT, UNLESS THE FOLLOWING THREE CONDITIONS ARE SATISFIED- (I) THE PRINCIPAL BUSINESS OR PRIMARY OBJECTI VE SHOULD BE BUSINESS OF BANKING (II) ITS PAID UP SHARE CAPITAL AND RESERVES SHO ULD NOT BE LESS THAN RUPEE ONE LAC (III) ITS BYE-LAWS DO NOT PERMIT ADMISSION OF AN Y OTHER CO-OPERATIVE SOCIETY AS ITS MEMBER. IT IS ALSO PERTINENT TO NOTE THAT IN THE ABOVE QUOTED DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF QUEPEM URBAN CO-OPERATIVE CREDIT SOCIETY LTD. (QUOTED SUPRA), THE HONBLE HIGH COURT HAS ALSO TAKEN DUE NOTE OF THE DECISION IN THE CASE OF TOTGARS COOPERA TIVE SALES SOCIETY LIMITED. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASS ESSEE BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CITIZEN COOPER ATIVE SOCIETY LTD. (CIVIL APPEAL NO. 10245 OF 2017 VIDE ORDER DATED 8.8.2017) AND THE MAVILAYI SERVICE COOPERATIVE BANK LTD. & ORS. VS. CIT, CALICUT & ORS . (CIVIL APPEAL NOS. 7343- 7350 OF 2019 DATED 12.1.2021. WE FIND THAT THE ASSE SSING OFFICER HAS COMPLETELY ERRED IN TREATING THE ASSESSEE AS COOPER ATIVE BANK AND INVOKING THE PROVISIONS OF SECTION 80P(4). SECTION 80P(4) PROVID ES THAT :- (4) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY I N 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, M/S. RAMARAJA KSHATRIYA COOPERATIVE CREDIT SOCIETY LIMITED 6 ( A ) 'CO-OPERATIVE BANK' AND 'PRIMARY AGRICULTURAL CREDIT SOCIETY' SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO THEM IN PART V OF TH E BANKING REGULATION ACT, 1949 (10 OF 1949); ( B ) 'PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELO PMENT BANK' MEANS A SOCIETY HAVING ITS AREA OF OPERATION CONFINED TO A TAL UK AND THE PRINCIPAL OBJECT OF WHICH IS TO PROVIDE FOR LONG-TERM CREDIT FOR AGRI CULTURAL AND RURAL DEVELOPMENT ACTIVITIES. 7. HONOURABLE SUPREME COURT IN THE CASE OF CITIZEN COOPERATIVE SOCIETY LTD. (CIVIL APPEAL NO. 10245 OF 2017 VIDE ORDER DA TED 8.8.2017) HAS SETTLED THE LAW THAT FOR BEING CONSIDERED AS A COOPERATIVE BANK LICENCE FROM RBI IN THIS REGARD IS A SINE QUA NON. IN ABSENCE OF THE RBI LIC ENCE AS SUCH THE ASSESSEE CANNOT BE TREATED AS COOPERATIVE BANK. HENCE DISALL OWING THE DEDUCTION BY REFERRING TO THE PROVISIONS OF SECTION 80P(4) IS CO MPLETELY UNSUSTAINABLE. MOREOVER SECTION 80P(2)(D) PROVIDES EXEMPTION TO IN TEREST EARNED ON FIXED DEPOSIT IN COOPERATIVE SOCIETIES. IT IS NOBODY'S CA SE THAT COOPERATIVE BANK ARE NOT COOPERATIVE SOCIETIES. 8. MOREOVER SIMILAR ISSUE WAS ELABORATELY DEALT BY A LARGER BENCH OF HONOURABLE SUPREME COURT IN THE CASE OF THE MAVILAY I SERVICE COOPERATIVE BANK LTD. & ORS. VS. CIT, CALICUT & ORS. (CIVIL APP EAL NOS. 7343-7350 OF 2019 DATED 12.1.2021) AND THE ISSUE WAS DECIDED IN FAVOU R OF THE ASSESSEE. WE MAY GAINFULLY REFER TO THE HON'BLE APEX COURT OBSERVATI ON IN PARA 21 AS UNDER, WHEREIN THE HON'BLE APEX COURT REFERRED TO ITS EARL IER DECISION OF CITIZEN COOPERATIVE SOCIETY LTD. (SUPRA) :- THE FOLLOWING PROPOSITIONS MAY BE CULLED OUT FROM THE JUDGMENT: (I) THAT SECTION 80P OF THE IT ACT IS A BENEVOLENT P ROVISION, WHICH WAS ENACTED BY PARLIAMENT IN ORDER TO ENCOURAGE AND PROM OTE THE GROWTH OF THE CO-OPERATIVE SECTOR GENERALLY IN THE ECONOMIC LIFE OF THE COUNTRY AND MUST, THEREFORE, BE READ LIBERALLY AND IN FAVOUR OF THE ASS ESSEE; (II) THAT ONCE THE ASSESSEE IS ENTITLED TO AVAIL OF DED UCTION, THE ENTIRE AMOUNT OF PROFITS AND GAINS OF BUSINESS THAT ARE ATTRIBUTABLE TO ANY ONE OR MORE ACTIVITIES MENTIONED IN SUBSECTION (2) OF SECTIO N 80P MUST BE GIVEN BY WAY OF DEDUCTION; M/S. RAMARAJA KSHATRIYA COOPERATIVE CREDIT SOCIETY LIMITED 7 (III) THAT THIS COURT IN KERALA STATE COOPERATIVE MAR KETING FEDERATION LTD. AND ORS. (SUPRA) HAS CONSTRUED SECTION 80P WIDELY AND LIBERALL Y, HOLDING THAT IF A SOCIETY WERE TO AVAIL OF SEVERAL HEADS OF DEDUC TION, AND IF IT FELL WITHIN ANY ONE HEAD OF DEDUCTION, IT WOULD BE FREE FROM TAX NOTW ITHSTANDING THAT THE CONDITIONS OF ANOTHER HEAD OF DEDUCTION ARE NOT SATI SFIED; (IV) THIS IS FOR THE REASON THAT WHEN THE LEGISLATU RE WANTED TO RESTRICT THE DEDUCTION TO A PARTICULAR TYPE OF CO-OPERATIVE SOCIETY , SUCH AS IS EVIDENT FROM SECTION 80P(2)(B) QUA MILK CO-OPERATIVE SOCIETIES, THE LEGISLATURE EXPRESSLY SAYS SO - WHICH IS NOT THE CASE WITH SECTION 80P(2)(A )(I); (V) THAT SECTION 80P(4) IS IN THE NATURE OF A PROVISO TO THE MAIN PROVISION CONTAINED IN SECTION 80P(1) AND (2). THIS PROVISO SP ECIFICALLY EXCLUDES ONLY CO- OPERATIVE BANKS, WHICH ARE COOPERATIVE SOCIETIES WHO MUST POSSESS A LICENCE FROM THE RBI TO DO BANKING BUSINESS. GIVEN THE FACT TH AT THE ASSESSEE IN THAT CASE WAS NOT SO LICENCED, THE ASSESSEE WOULD NOT FALL WITHIN THE MISCHIEF OF SECTION 80P(4). 9. RESPECTFULLY FOLLOWING THE PRECEDENT AS ABOVE, W E UPHOLD THE LEARNED CIT(A)S ORDER. 10. IN THE RESULT, REVENUES APPEALS STAND DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 11.3.2021. SD/- SD/- (RAMLAL NEGI) (SHAMIM YA HYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 11/03/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI