HC : Co-op. credit society’s sale under Government’s Public Distribution System qualifies for Sec. 80P benefit

Madras HC reverses ITAT's order, grants deduction u/s. 80P(2)(a)(i) to assessee (a society engaged in the business of banking and providing credit facilities to its members) on income earned from fair price shops set up under the Public Distribution System (PDS) of the Government for AY 2005-06; Rejects AO’s stand that since the activity related to PDS was not related to assessee's banking activity, the income arising therefrom was not allowable u/s 80P(2)(a); Notes that the assessee had set up fair price shops pursuant to directives issued by the Government, which are binding on the assessee-society; Further notes that activity of establishing a fair price shop clearly falls within the scope of assessee-society’s by-laws; Also holds that the definition of 'credit society' is wider in import to include any activity that the Government may, by notification, specify, concludes that the given activity cannot be truncated from the activities of the credit society, relies on Bombay HC ruling in Ahmednagar District Central Cooperative Bank Limited,:HC