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2011 (9) TMI 1058 - AT - Income TaxEligibility for deduction u/s 80P(2)(a)(i) - Held that:- Income arising from deposits in bank which could be said to be ready for utilization by the assessee in his business of providing credit facilities to its Members was held to be attributable to the business of providing credit facilities in order to fall within the ambit of section 80P(2)(a)(i) of the Act Disallowance of provisions of NPA is eligible for deduction u/s 80(P)(2) (a)(i) - Held that:- There is nothing brought on record to disregard that the interest irrecoverable, which is embedded in the NPAs is nothing but interest receivable from members, though not regularly received. It is only the defaulted interest income, which is sought to be claimed as a deduction. If the said deduction is not allowed, the natural corollary is that the enhanced income would become eligible for 80P(2)(a)(i), to which the assessee is otherwise entitled. Addition made on account of disallowance u/s 14A - Held that:- The assessee had not claimed any exemption under the provisions of section 10(38) of the Act i.e. in connection with the income which is exempt in the hands of the assessee. The deduction was claimed under chapter VIA of the Income Tax Act which had been allowed by the Assessing Officer while computing the income for the year under consideration. In the totality of facts and circumstances, we find no merit in the disallowance computed by Assessing Officer u/s 14A of the Act. Thus where the assessee had not claimed the dividend income exempt u/s 10(38) of the Act, we find support from the ratio laid down by Hon'ble Punjab & Haryana High Court in the case of CIT v Kings Exports [2009 (8) TMI 54 - PUNJAB AND HARYANA HIGH COURT ]. Upholding the order of CIT(A), we dismiss the ground of appeal raised by the Revenue.
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