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TMI Blog2021 (12) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... ers. AO computed the proportionate amount of interest on the deposits from non-members which was not eligible for deduction under section 80P(2)(a)(i). Both the parties and perused the materials available on record including the case law cited the assessee. The provisions of section 80P(2)(a)(i) provides the deduction to a co-operative society engaged in the business of banking or providing credit facilities to its members. The provisions of the section are without any ambiguity. In other words, the income from the activity of financing from the members is only eligible for deduction under section 80P(2)(a)(i) of the Act. If there is any income arising to the co-operative society from the non-members that will not be subject to deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 143 of the Income Tax Act, 1961 (here-in-after referred to as the Act ) relevant to the Assessment Year 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 ₹ 9,43,169.00 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 there was the surplus fund available with the assessee which was deposited with the banks in order to generate the interest income as well as to maintain the liquidity for the repayment of the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgment of Hon ble Supreme Court in the case of Mavilayi Service Cooperative Bank Ltd. v. CIT reported in 123 taxmann.com 161. 7. On the other hand the learned DR vehemently supported the order of the authorities below. 8. We have heard the rival contentions of both the parties and perused the materials available on record including the case law cited by the learned AR for the assessee. The provisions of section 80P(2)(a)(i) of the Act provides the deduction to a co-operative society engaged in the business of banking or providing credit facilities to its members. The provisions of the section are without any ambiguity. In other words, the income from the activity of financing from the members is only eligible for deduction under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... societies were held to be entitled to the benefit of the deduction contained in Section 80P(2)(a)(i) of the Act, notwithstanding the fact that the society may also be giving loans to its members which are not related to agriculture. However, if it is found that there are instances of loans being given to the non-members, profits attributable to such loans obviously were not liable to be deducted. The essence of this decision is that absolute denial of deduction under Section 80P(2)(a)(i) of the Act to the assessee's (cooperative societies) engaged in the providing credit facilities to the non-members along with its members is not warranted under the Act and only that part of profit and gains that is attributable and/or pertains to the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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