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TMI Blog2014 (5) TMI 1099X X X X Extracts X X X X X X X X Extracts X X X X ..... ng credit facility to its members only. Where as Assessing Officer rightly worked out to Rs. 9,31,471/- credit facilities given to the non members also, which are not eligible for deduction u/s 80P(2)(a)(i) of the I.T. Act. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the disallowance of Rs. 1,74,516/- made on account of cash collection counter u/s 80P(2)(a)(i) of the I.T. Act, 1961 is not applicable to the assessee society, nor the society claimed deduction u/s 80P(2)(a)(i) against this income in his return of income filed. 3. The order of CIT(A) be vacated and that of the AO's order be restored. 4. The appellant craves leave to addition, amend, alter or delete any grounds of appeal. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit facility given to its members. The assessee has borrowed funds also from NDCC Bank for advancing credit facilities to its members. On these facts, in order to determine the issue as to whether the assessee society is eligible to claim deduction in respect of income earned on loans advanced to members, the provisions of section 80P(1) & (2)(a) has to be looked into. The relevant provisions read as under: "80P. (1) Where, in the case of an assessee being cooperative 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 sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erative society, engaged in the business of providing credit facility to its members is exempt. The assessee has earned income from facilities provided to its members. The fact that the income earned from members from loans advanced, which were partially secured out of borrowing from NDCC Bank, does not make any difference. Nowhere, it has been provided in the above section that in order to earn income from providing credit facilities to its members, amount used for giving credit facilities to its members should not be from borrowing from cooperative banks. In view of above, the CIT(A) was justified in observing that the assessee is eligible for deduction u/s 80P(2)(a)(i) and accordingly, the addition made by the Assessing Officer of Rs. 9, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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