ITAT denies exemption U/s. 80P to Co-operative Bank as his area of operation not confined to a Taluk

We may without prejudice also examine the assessee’s claim of being a primary co- operative agricultural and rural development bank. The Revenue has rejected the assessee’s claim on the ground that it does not meet the definition thereof inasmuch as its area of operation is not confined to a Taluk (Explanation (b) of section 80P (4)). In this regard, we firstly observe that the assessee has not clarified if it is a member of the Rajasthan State Co-operative Land Development Bank and, if so, since when. Secondly, it has not shown that its principal object is to provide long term credit for agricultural and rural development activities, which constitutes the defining attribute of such a bank, with its object clause nowhere indicating so.

Thirdly, its area of operation admittedly extends beyond one Taluk. The reliance placed on the decision in the case of CIT & Anrs vs. D. Ananda Basappa (supra), based on section 54(1), invoking the provision as enshrined in section 13 of the General Clauses Act, 1897, is clearly misconceived, and rightly rejected by the Revenue. It does not take much strain, and a bare reading of said section would convince one that the investment that qualifies for exemption u/s. 54(1) is that in a residential house, i.e., specifies the nature of investment exempting the income. Clearly, if the investment is in more than one residential house, every part of the investment would satisfy the condition of being in a residential house, and where within the defined time period as provided under the section would qualify for exemption. The provision under reference in the instant case, i.e., Explanation (b) to section 80P(4), on the other hand, is a defining provision employing the word `means’. The same has to be strictly construed, as is well settled, besides having been explained lately by the hon’ble apex court in the case of West Bengal State Warehousing Corporation vs. Indrapuri Studio Pvt Ltd. (in Civil Appeal No. 3865 of 2006 dated 19-10-2010), wherein it held that the word `means’ in a definition signifies a hard and fast definition. Also, it is trite that an exemption provision is to be strictly construed. That apart, a bare reading of the provision makes it abundantly clear that the word `a taluk’ are with reference to the area of operation and not the nature of the area of operation, as contended by and on the assessee’s behalf. We, therefore, find no basis to consider the assessee as being a primary cooperative agricultural and rural development bank as defined in section 80P, so as to be entitled for tax benefit thereunder on its income as one such.

IN THE INCOME TAX APPELLATE TRIBUNAL

JAIPUR BENCHES ‘B’, JAIPUR

BEFORE S/SHRI R.K. GUPTA, JM and SANJAY ARORA, AM I.T.A No. 764/JP/2011

Assessment Year: 2007-08

Kekri Sahakari Bhumi Vikas Bank Ltd., Vs The ITO, Ward – 2,

Opp. Court, Post. Kekri, Beawar Distt. Ajmer

[PAN: AAATK 3393A]

(Assessee -Appellant) (Revenue-Respondent)

Assessee by Shri Sanjeev Jain, CA-AR

Revenue by Shri Vinod Johri, Senior DR

Date of hearing 29/02/2012

Date of pronouncement 23/03/2012

ORDER

Per Sanjay Arora, AM:

This is an Appeal by the Assessee, arising out of the Order by the Commissioner of Income-tax (Appeals), Ajmer (‘CIT(A)’ for short) dated 28-06-2011, dismissing the assessee’s appeal contesting its assessment u/s. 143(3) of the Income Tax Act, 1961 (‘the Act’ for short) dated 3 1-12-2009 for the assessment year (A.Y.) 2007-08.

Facts

2. The assessee is a Cooperative Society, formed under the Rajasthan State Co-operative Societies Act, 2001. It filed its return for the year on 29-02-2008, claiming exemption u/s. 80P(2)(a)(i) of the Act on its total income of Rs.70,49,499/-. In view of the amendment to section 80P vide Finance Act, 2006 w.e.f. 01-04-2007, excluding benefit u/s. 80P to co- operative banks other than the defined categories, the said relief was proposed to be disallowed by the Assessing Officer (AO). The assesse, in response, claimed to be a primary co-operative agricultural and rural development bank, which category of co-operative banks stood excepted  u/s. 80P(4). The same did not find the favour with the AO as the assessee was engaged in financing activities even other than purely agricultural activities. Also, its area of operation extended to Bhinai Tehsil and Arai Gram Panchayat, i.e., in addition to Kekri Tehsil. As such, the same were not confined to one Taluk, as stipulated under the defining clause of the said provision of section 80P(4) per Explanation (b) thereto. In appeal, the assessee agitated its case with reference to the decision in the case of CIT & Anrs vs. D. Ananda Basappa, 309 ITR 329 (Karnataka), rendered in the context of section 54 of the Act, wherein, drawing on section 13 of General Clauses Act, 1897, it was clarified that where the singular is used for a word, it is permissible to include plural. Accordingly, the expression ‘a residential house’ in section 54(1) should not be understood to indicate a singular number. It was further argued that the assessee is not a co-operative bank inasmuch as it does not engage in the business of banking. Though authorised to receive deposits from its members and others after getting approval from the NABARD/ RBI, the assesse-society had not yet received any deposits from either, as it had not even applied for the requisite approval from the NABARD/RBI. The said object, thus, stands only on paper. The ld. CIT(A) was of the view that section 80P(4) would apply in the instant case; the terms of the provision read with Explanation (b) thereto, restricting the area of operation to one Taluk, being explicit. Section 54 of the Act is worded differently, and its interpretation would be of no assistance in the instant case. Secondly, the assessee’s argument that it had not applied for any approval from NABARD / RBI was also considered by him as of no moment. It was clear from the reading of the objects clause of the appellant that it was a co- operative bank. Support was derived by him from the decision by the hon’ble apex court in the case of Madras Auto Rickshaw Drivers’ Co-operative Society vs. CIT (2001) 249 ITR 330 (SC). In the facts of that case, the assessee co-operative bank was formed to promote the economic interests of its members by purchasing auto rickshaw vehicles and selling them to its members on hire purchase terms. It claimed exemption u/s. 80P(2)(a)(i) on the ground of carrying on the business of providing credit facilities to its members. The same was disapproved by the hon’ble high court in the case of CIT vs.  Madras Autorickshaw Drivers’ Co-operative Society Ltd., 143 ITR 981 (Mad) on the basis that the object of the society was to purchase and sell autorickshaws, the payment of which was effected by the members in the form of hire purchase arrangement, which could not be considered an object of offering credit facilities to the members. The same was affirmed in appeal by the apex court, stating that though it sympathised with what the assessee was doing, it did not think that its activities can be said as provision of ‘credit facilities to its members’. The assessee’s claim for the deduction u/s. 80P(2)(a)(i) was, accordingly, dismissed by him.

Arguments

3.1 Before us, the assessee principal case was that it is not a co-operative bank. Section 5 (b) of the Banking Regulation Act, 1949 (‘B.R. Act’ for short) defines `banking’ to mean accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, or otherwise. The assessee not accepting any deposits from the public, could not be said to be a co-operative bank for the proscription of section 80P(4) to apply thereto. Reference was made to Circular No. 14 of 2006 dated 28-12-2006 by the CBDT explaining various provisions of the Finance Act, 2006 (Paper Book page 34-65), whereby vide para 22 (PB pg.50) the amendment to section 80P stands explained as under:-

`22. Withdrawal of tax benefits available to certain co-operative banks 22.1 Section 80P, inter alia, provides for a deduction from the total income of the co-operative societies engaged in the business of banking or providing credit facilities to its members, or business of a cottage industry, or of marketing of agricultural produce of its members, or processing, without the aid of power, of the agricultural produce of its members, etc.

22.2 The co-operative banks are functioning at par with other commercial banks, which do not enjoy any tax benefit. Therefore section 80P has been amended and a new sub-section (4) has been inserted to provide that the provisions of the said 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. The expressions ‘co-operative bank’, `primary agricultural credit society’ and `primary co-operative agricultural and rural development bank’ have also been defined to lend clarity to them.

22.3 Further, a new sub-section (viia) has been inserted in clause (24) of section 2 to provide that the profits and gains of any business of banking (including providing credit facilities) carried on by a co-operative society with its members shall be included in the definition of ‘income’.

22.4 Applicability – From assessment year 2007-08 onwards.’ (Sections 3 and 19)

The same clarifies that the withdrawal of tax benefit to co-operative banks (save the excluded categories) u/s. 80P is only as these were functioning at par with other commercial banks. The assessee is only engaged in lending activities and, as such, could not be considered as engaged in the business of banking, the defining feature of which is the acceptance of deposits from the public. The term `co-operative bank’ stands defined in section 5 (cci) of the Banking Regulation Act, 1949 to mean a `State Co-operative Bank’, a `Central Co-operative Bank’ and a `Primary Co-operative Bank’. A primary co-operative bank, in terms of section 5(ccv) of the B .R. Act, means a co-operative bank, other than a primary agricultural credit society (which stands excluded u/s. 80P (4)), the primary object of which is transaction of banking business, besides other ingredients. The assessee is clearly not a `state co-operative bank’ or a `central co-operative bank’ which, per section 5(ccvii) of the B.R. Act, are defined to have the meanings as respectively assigned to them in the National Bank for Agriculture and Rural Development Act, 1981 (‘NABARD Act’ for short). The mere existence of the power to accept deposits, the exercise of which was subject to approval from NABARD / RBI, could not by itself be considered as debilitating the assessee’s case. So however, it would yet be eligible for exemption u/s. 80P(2)(a)(i) by virtue of its second limb, i.e., the provision of credit facilities to its members.

3.2 The ld. DR, on the other hand, relied on the orders by the authorities below who, it was stated by him, had extensively reviewed the assessee’s case, issuing definite findings in the matter, so that the same merit confirmation.

Findings

4.1 We may before proceeding to discuss the assessee’s case on merits, extract the relevant provisions of the Act as well as the BR Act and the NABARD Act (relevant parts): 5

Income-tax Act, 1961

Definitions

`2. In this Act, unless the context otherwise requires,- (24) “income” includes –

(viia) the profits and gains of any business of banking (including providing credit facilities) carried on by a co-operative society with its members;’

Deduction in respect of income of cooperative societies

`80P. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee.

(2) The sums referred 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

(iii) the marketing of agricultural produce grown by its members, or

the whole of the amount of profits and gains of business attributable to any one or more of such activities: Provided that in the case of a co-operative society falling under sub-clause (vi) or sub- clause (vii) ….

(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 taluk and the principal object of which is to provide long-term credit for agricultural and rural development activities.’

The Banking Regulation Act, 1949 Interpretation

`5. In this Act, unless there is anything repugnant in the subject or context,–

(a) “approved securities” means -..

(b) “banking” means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise;

(c) “banking company” means any company which transacts the business of banking in India;

Explanation.–Any company which is engaged in the manufacture of goods or carries on any trade and which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader shall not be deemed to transact the business of banking within the meaning of this clause;’

Part V

APPLICATION OF THE ACT TO COOPERAIVE BANKS

Act to apply to co-operative societies subject to modifications `56. The provisions of this Act, as in force for the time being, shall apply to, or in relation to, co-operative societies as they apply to, or in relation to, banking companies subject to the following modifications, namely:–

(a) throughout this Act, unless the context otherwise requires,–

(i)references to a “banking company” or “the company” or “such company” shall be construed as references to a co-operative bank,

(ii) references to “commencement of this Act” shall be construed as references to commencement of the Banking Laws (Application to Co-operative Societies) Act, 1965 (23 of 1965);

(b) in section 2, the words and figures “the Companies Act, 1956 (1 of 1956), and” shall be omitted; (c) in section 5,–

(i) after clause (cc), the following clauses shall be inserted namely:–

(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-operative society, the primary object of which is to provide financial accommodation to its members and includes a co- 7

operative land mortgage bank;

(cciv) “primary agricultural credit society” means a co-operative society,–

(1) the primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including the marketing of crops); and

(2) the bye-laws of which do not permit admission of any other co-operative society as a member:

Provided that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose;

(ccv) “primary co-operative bank” means a co-operative society, other than a primary agricultural credit society,–

(1) the primary object or principal business of which is the transaction of banking business;

(2) the paid-up share capital and reserves of which are not less than one lakh of rupees; and (3) the bye-laws of which do not permit admission of any other co-operative society as a member:

Provided that this sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose;

Explanation.–If any dispute arises as to the primary object or principal business of any co- operative society referred to in clauses (cciv),(ccv) and (ccvi), a determination thereof by the Reserve Bank shall be final;

(ccvii) “central co-operative bank”, “co-operative society”, “primary rural credit society” and “state co-operative bank” shall have the meanings respectively assigned to them in the National Bank for Agriculture and Rural Development Act, 1981;”‘

National Bank for Agriculture and Rural Development Act, 1981

`2. (d) “Central Co-operative Bank’ means the principal co-operative society in a district in a state, the primary object of which is the financing of other Co-operative societies in the district:

Provided that in addition to such principal society in state, or where there is no such principal society in a district, the State Government may declare any one or more Co-operative societies, carrying on business in that district to be also or to be a Central Co-operative bank or Central Co-operative banks within the meaning of this definition;

(u) “State Co-operative Bank’ means the principal co-operative society in a state, the primary object of which is the financing of other Co-operative societies in the State:

Provided that in addition to such principal society in state, or where there is no such principal society in a State, the State Government may declare any one or more Co-operative societies, carrying on business in that State to be also or to be a State Co-operative bank or State Co-operative banks within the meaning of this definition;’

4.2 We may first examine the assessee’s claim that it not a co-operative bank, being not engaged in the business of banking and, therefore, not impeded or hit by the provisions of section 80P(4). We do not find any merit in the said claim. This is for the reason that the requirement of transacting banking business is not a pre-requisite for a Central or a State Co- operative Bank, i.e., other than a primary co-operative bank, even though the former are, without doubt, only co-operative banks (refer section 5 (cci) of the B. R. Act). The provisions of section 80P(4) read with Explanation thereto, does appear to be internally inconsistent insofar as a primary co-operative bank, which is also a co-operative bank, is concerned. It is defined as exclusive of primary agricultural credit society (Section 5 (ccv) of the B.R. Act), so that the two, i.e., ‘co-operative bank’ and `primary agricultural credit society’ (PACS for short), are mutually exclusive. That would, however, imply turning section 80P(4) on its head, i.e., treat the said provision as self-contradictory, a position which we are loathe to assume. The apparent dichotomy gets resolved when viewed in light of the provision of section 5 (cciv) of the B.R. Act, which provides for admission of a co-operative bank as a member of a PACS in certain cases. That is, it is permissible for a co-operative bank to be a member of PACS, so that the distinction between the two, i.e., `co-operative bank’ and `primary agriculture credit society’, does not appear to be as plain and neat, and gets blurred, i.e., even at the stage of a primary co- operative bank. A provision is required to be read as a whole, and in the manner that makes it workable, consistent with its avowed objects, which in the instant case is of according exemption only to the excluded categories of co-operative societies/banks. This is perhaps no better expressed or represented than by the clear wording of section 80P(4) itself, which excludes, i.e., from the ambit of section 80P(4), all co-operative banks other than PACS and primary cooperative agricultural and rural development bank. Now, could the assessee possibly claim to be both or either of the two excepted categories, i.e., PACS or primary cooperative agricultural and rural development bank, without conceding to being a co-operative bank? In fact, the two, i.e., the business of banking and providing credit facilities, are considered at par insofar as a co-operative society is concerned, as would be apparent from conjoint reading of sections 2(24) (viia) (inserted by the Finance Act, 2006 w.e.f. 01-04-2007), 80P 2(a)(i), 80P(4) and Explanation thereto. As such, in our view nothing turns on by seeking to emphasize the distinction between the two activities, i.e., business of banking and providing credit facilities, being para materia insofar as section 80P is concerned. A reading of the relevant provisions makes it clear that for the purposes of the Act, the financing of its constituents is considered as integral to banking, considering the same in a broad manner in relation to a co-operative society, even as clarified by the tribunal in the case of Kerala State Co-op. Agrl. Rural Development Bank vs.  Asstt. CIT (2011) 139 TTJ (Coch) 585 (refer para 4.6). It may be relevant to note that the only clause of section 80P(2) under which co-operative banks fall is sec. 80P(2)(a)(i). Secondly, if what the assessee states is correct, i.e., the intention of the Legislature was only to exclude the co-operative societies engaged in the business of banking, section 80P(4) would have been worded differently. All that was necessary, in that case, was to state so explicitly, i.e., exclude only the co-operative societies engaged in the business of banking and, thus, the entities covered by the first limb of section 80P(2)(a)(i), even as being contended by the assessee. Going by the assessee’s arguments, it would be permissible for a co-operative bank, though holding a banking license from RBI, yet engaged only in lending activities, which a banking company/cooperative bank can by virtue of sec. 6 of the BR Act., to claim exemption u/s. 80P(2)(a)(i), even post Finance Act, 2006. In fact, the income of most commercial banks also comes principally only from lending activities, i.e., providing financial accommodation to its constituents, and which could well be from own monies/capital. In our view, therefore, the assessee’s argument would be of no consequence, and notwithstanding its claim of being not a co-operative bank, though eligible for tax benefit u/s. 80P, it would stand to w.e.f. 01-04-2007, i.e., AY 2007-08 onwards, be exigible for relief thereunder only if it falls within the two categories of co-operative banks excepted by section 80P(4), i.e., `PACS’ and `primary co- operative agricultural and rural development bank’. Put succinctly, the assessee’s claim of being entitled to deduction u/s. 80P(2)(a)(i) without demonstrating it to be either a PACS or primary co-operative agricultural and rural development bank, cannot be countenanced and is to be rejected. And unless shown to be so, would stand to be taxed by virtue of section 2(24) (viia) read with section 28 (i) of the Act for the assessment year 2007-08 and the subsequent assessment years. We have in so stating also taken into account the explanatory notes to the amendment (per sections 3 and 19 of the Finance, Act 2006) vide para 22 of the CBDT Circular No. 14/2006 dated 28-12-2006 (PB Page 5), being in the nature of contemporanea exposito. It may also not be out of place to mention here that the onus in law to exhibit the satisfaction of the conditions or criterion subject to which deduction or exemption is exigible in law is squarely on the assessee.

4.3 Next, we consider the assessee’s case from the stand point of it falling within the two excepted categories as specified in section 80P(4). For this, we reproduce here-in-below appeal its main objects (refer para 3, page 2 of the appellate order):

`2. The objects for which the society is formed are as under:

a) To provide finance to its members against immovable property, agricultural land, residential house and plot, liquid assets (NSC, KVP and FDR of Bhumi Vikas Bank) and taking guarantee of two persons, against salary income for the objectives mentioned in section 67 of the Rajasthan Cooperative Societies Act, 2001, to finance without any securities to the members under various plans of State Govt. / Central Govt.

b) To receive deposit from members and others after getting approval from NABARD /RBI.

c) To fulfil the objects, society shall become member of the Rajasthan State Cooperative Land Development Bank and shall follow the policies laid by Rajasthan State Cooperative Land Development Bank.’ In the light of the foregoing, we find nothing in its object clause to suggest that its primary object is providing financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including marketing of crops), as stipulated per section 5 (cciv) of the B .R. Act, so as to qualify as a `primary agricultural credit society’ (PACS). The only object which enables it to provide financial accommodation is its object clause 2(a). The same only specifies the assets on the security of which the assesse-society may provide finance to its members. The securitization of a loan or advance is a different aspect of the matter, and completely different from the purpose or the activity for which finance is being provided, and which is being thus financed. The assessee claims the decision in the case of Madras Auto Rickshaw Drivers’ Co-operative Society vs. CIT (supra) as not applicable thereto, as while in that case the object clause was the promotion of economic interests of its members by purchasing auto rickshaw vehicles and selling the same to them on hire purchase terms, and not providing credit facilities to its members, in the present case, it is expressly so. We agree. However, that by itself is not sufficient, and it is to be in addition expressed to be for agricultural purposes or for purposes connected with agricultural activities, and on which its object clause, as also the assessee, is silent. So however, we are not inclined to oust the assessee’s case on that basis. This is as there is another window available to it in law, i.e., where the principal business is financing the agricultural or connected activities of its members (section 5 (cciv) read with section 56(c) of the B.R. Act). Though it could be argued that such principal business could be taken the cognizance of where it finds reflection in the assessee’s charter/object clause, we do not think it to be so. This is as such an interpretation would render the words ‘principal business’ occurring in the provision as superfluous and otiose, while it is well settled that each and every word of the statue has to be given its due meaning and, thus, effect. As such, though not expressly through its object clause, if it could yet be shown by the assessee that its principal business consists of providing financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including marketing of crops), it would in law qualify to be a PACS and, thus, exempt u/s. 80P(2)(a)(i) r/w s. 80P(4). As apparent, the purpose for which the finance is provided, as against its securitization, is only relevant, so that that the assessee would need to satisfy the taxing authority with regard thereto. Needless to add, this requirement has to be satisfied by it independently for each year, as there could well be a change in the profile of its lending activities with time. Further, we observe that the assessee’s claim of being a primary cooperative agricultural and rural development bank, which though would require independent examination and finding/s, is strongly indicative of the nature of its lending activities, which has a direct bearing on the question of it being a PACS (or not). There being no finding in the matter by the authorities below, we restore the matter for the purpose of necessary verification and issue of definite findings of fact/s, back to the file of the first appellate authority, who shall adjudicate the same after hearing the parties, including recourse to rule 46A, where the assessee leads any new evidence in this regard. Also, where any cooperative bank is a member of the assessee-society, it would have to be additionally shown that the same is so by subscribing to its share capital out of funds provided for the purpose by the State Government, i.e., falls within the proviso to sec. 5(cciv) of the B.R. Act. We direct accordingly.

4.4 We may without prejudice also examine the assessee’s claim of being a primary co- operative agricultural and rural development bank. The Revenue has rejected the assessee’s claim on the ground that it does not meet the definition thereof inasmuch as its area of operation is not confined to a Taluk (Explanation (b) of section 80P (4)). In this regard, we firstly observe that the assessee has not clarified if it is a member of the Rajasthan State Co-operative Land Development Bank and, if so, since when. Secondly, it has not shown that its principal object is to provide long term credit for agricultural and rural development activities, which constitutes the defining attribute of such a bank, with its object clause nowhere indicating so. Thirdly, its area of operation admittedly extends beyond one Taluk. The reliance placed on the decision in the case of CIT & Anrs vs. D. Ananda Basappa (supra), based on section 54(1), invoking the provision as enshrined in section 13 of the General Clauses Act, 1897, is clearly misconceived, and rightly rejected by the Revenue. It does not take much strain, and a bare reading of said section would convince one that the investment that qualifies for exemption u/s. 54(1) is that in a residential house, i.e., specifies the nature of investment exempting the income. Clearly, if the investment is in more than one residential house, every part of the investment would satisfy the condition of being in a residential house, and where within the defined time period as provided under the section would qualify for exemption. The provision under reference in the instant case, i.e., Explanation (b) to section 80P(4), on the other hand, is a defining provision employing the word `means’. The same has to be strictly construed, as is well settled, besides having been explained lately by the hon’ble apex court in the case of West Bengal State Warehousing Corporation vs. Indrapuri Studio Pvt Ltd. (in Civil Appeal No. 3865 of 2006 dated 19-10-2010), wherein it held that the word `means’ in a definition signifies a hard and fast definition. Also, it is trite that an exemption provision is to be strictly construed. That apart, a bare reading of the provision makes it abundantly clear that the word `a taluk’ are with reference to the area of operation and not the nature of the area of operation, as contended by and on the assessee’s behalf. We, therefore, find no basis to consider the assessee as being a primary cooperative agricultural and rural development bank as defined in section 80P, so as to be entitled for tax benefit thereunder on its income as one such.

5. In the result, the assessee’s appeal is allowed for statistical purposes.