9911796707
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Issues:
- Interpretation of deduction under section 80P(2)(a)(i) for a co-operative society engaged in banking or providing credit facilities to its members. - Treatment of various income sources like staff loans, interest on non-performing assets, security fee, and miscellaneous income under section 80P(2)(a)(i). Analysis: The judgment deals with an appeal by the revenue against the CIT(A)'s order for the assessment year 2001-02 regarding the deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961. The primary issue revolves around whether certain income sources like staff loans, interest on non-performing assets, security fee, and miscellaneous income are eligible for exemption under section 80P(2)(a)(i) for a co-operative society engaged in banking or providing credit facilities to its members. The Assessing Officer categorized the income of the co-operative society under two heads, distinguishing between interest income from members and other sources like staff loans and miscellaneous income. The CIT(A) referred to a Tribunal decision and held that income from staff loans was part of the banking business, aligning with the decision of the jurisdictional High Court. The Tribunal upheld the CIT(A)'s decision regarding staff loans, citing the High Court's ruling. Regarding interest on non-performing assets and security fee, the CIT(A) analyzed the nature of these incomes and concluded that they were related to providing credit facilities to members and hence eligible for deduction under section 80P(2)(a)(i). The Tribunal agreed with the CIT(A)'s reasoning, emphasizing the direct connection between these incomes and the business of providing credit facilities. The judgment delves into the interpretation of the phrase 'attributable to' in section 80P(2)(a)(i) as distinct from 'derived from', citing relevant Supreme Court precedents. It highlights that if income is incidental to the business of providing credit facilities, it qualifies for deduction under section 80P(2)(a)(i). The Tribunal analyzed various income sources in light of this distinction, ultimately upholding the CIT(A)'s decision on the eligibility of the diverse income streams for exemption. In conclusion, the Tribunal found no infirmity in the CIT(A)'s order and dismissed the revenue's appeal, affirming the eligibility of the assessed income sources for deduction under section 80P(2)(a)(i). The judgment provides a detailed analysis of the legislative intent behind the deduction provision and clarifies the scope of income sources eligible for exemption for co-operative societies engaged in banking or providing credit facilities to members.
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