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TMI Blog2022 (10) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... tors of the assessee, but as rightly submitted by the DR, the nature and characterization of the term development fund is not clear on record whether this fund is something which can be said to be attributable to the business activity of giving credit facilities to its members of the assessee or is it something outside the purview that has to be examined. In the interest of justice, therefore, set aside the order of NFAC and remand the matter to the file of the AO for adjudication as per law to conduct the detailed verification regarding interest of 2.5% of the loan amount taken as development fund by the assessee and whether it is attributable to the business activity of the assessee. That after examination of the facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have gone through the contents of the condonation petition and affidavit and the reasons enumerated therein. I am of the considered view that such a delay of 2 days cannot be attributable to the deliberate or malafide conduct of the assessee. The delay was purely circumstantial and un-intentional. The ld. DR did not had any objection for condonation of the delay. Accordingly, I condone the delay of 2 days and the case is heard on merits. 3. In this case it was observed from the Profit and Loss Account of the assessee that it had received Rs.4,97,750/- as Vikas Nidhi . It was observed further by the Assessing Officer (AO) that such receipt was not covered within the main objective of the assessee s society. Accordingly, the AO provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the said provision and accordingly, the NFAC upheld the addition. 4. At the time of hearing, the ld. AR submitted that as already evident from the submissions made before the NFAC, the additional rate of interest charged from the members @ 2.5% as development fund under the head Vikas Nidhi , such provision was approved in the Resolution passed by the Board of Directors in its meeting dated 30.05.2014. This is very much therefore, attributable to the business activity of the assessee i.e. providing credit facilities to its members, hence an allowable deduction under the said provision. The ld. AR further placed reliance on the decision of Hon ble Madhya Pradesh High Court in CIT vs. Dhar Central Co-operative Bank Ltd. (1984) 149 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard the parties, I am in conformity with the submissions of the ld. DR. The provisions of section 80P(2)(a)(i) of the Act allows deduction to the amount earned from the profits and gains of business attributable to the business activity of the assessee, which in this case is providing credit facilities to its members. The interest rate charged @ 2.5% of the loan amount as development fund, this has been passed in the Resolution of the Board of Directors of the assessee, but as rightly submitted by the ld. DR, the nature and characterization of the term development fund is not clear on record whether this fund is something which can be said to be attributable to the business activity of giving credit facilities to its members of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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