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TMI Blog2021 (12) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Years 2014-15 & 2015-16. First we take up ITA No. 1308/AHD/2019 for A.Y. 2014-15 2. The only issue raised by the assessee is that the learned CIT-A erred in confirming the order of the AO by sustaining the addition of Rs. 4,65,000.00 by disallowing the deduction claimed under section 80P(2)(a)(i) of the Act. 3. The facts in brief are that the assessee in the present case is a co-operative society and engaged in the activity of providing credit facilities to the members. In the year under consideration, the assessee has shown gross amount of interest of Rs. 10,50,786.00 which is inclusive of the interest from non-members of Rs. 6,85,971.00. As per the AO s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble Gujarat High Court in the case of State Bank of India versus CIT reported in 72 Taxmann.com 64 wherein it was held as under: The Income Tax Appellate Tribunal was also justified in holding that interest income of Rs. 16,14,579/- and Rs. 32,83,410/-respectively on deposits placed with State Bank of India was not exempt under section 80P(2)(a)(i) of the Income Tax Act, 1961. 8. In view of the above, it is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the State Bank of India is not being attributable to the business as envisaged under the provisions of the Act. Thus the same cannot be deducte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notwithstanding that they may also be giving loans to their members which are not related to agriculture. Also, in case it is found that there are instances of loans being given to nonmembers, profits attributable to such loans obviously cannot be deducted." 9.1 Thus, the profits and gains attributable to non-members arising as a result of advancement of loans was held to be not an allowable deduction under Section 80P(2)(a)(i) of the Act. In view of the above, we do not find any merits in the argument advanced by the learned counsel for the assessee. 9.2 The next aspect arises how to determine the income which is not eligible for deduction under section 80P(2)(a)(i) of the Act. It is for the reason that the assessee is not maintaining a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on cogent materials. Furthermore, if the assessee has made deposits in the banks out of the money borrowed from the members, then the corresponding interest cost borne by the assessee should be allowed as deduction. 9.4 Thus, we hold that there is no infirmity in the order of the learned CIT (A), requiring any interference. Hence, we uphold the same. Hence, the ground of appeal of the assessee is dismissed in terms of above direction. 10. In the result, the appeal filed by the assessee is allowed for the statistical purposes. Coming to ITA 1309/AHD/2019 for A.Y. 2015-16 11. At the outset, we note that the issues raised by the assessee in this ground of appeal is identical to the issues raised by the assessee in ITA No. 1308/AHD/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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