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2019 (11) TMI 1565 - AT - Income TaxEligibility of deduction u/s 80P - assessee is a co-operative society registered under the Karnataka Co-operative Societies Act, 1959 - Denial of deduction as assessee was providing credit facilities to Non-members, namely, associate / nominal members - nominal and associate members of assessee is more than 15% of the total membership, there has been a violation of provisions of Karnataka Co-operative Societies Act, 1959 - HELD THAT:- Admittedly, assessee has been accepting deposits and given loans primarily to associate / nominal members. the assessee-society is accepting deposits and also providing credit facilities to nominal / associate members far exceeding 15% of its total business. A.O. has come to a categorical finding that regular members is less than 15%, whereas, non-members, i.e., nominal / associate members are exceeding 87% of the total members. This categorical finding of the A.O. has not been dispelled by the assessee before the Tribunal. Therefore, there is a clear violation of provisions dealing with non-members as per Karnataka Co-operative Societies Act, 1959. Therefore, the ratio of the judgment of the Hon’ble Supreme Court in the case of Citizen Co-operative Society [2017 (8) TMI 536 - SUPREME COURT] is clearly applicable to the facts of the instant case Assessee could not controvert the categorical finding of CIT (A) regarding violation of the provisions of Karnataka Co Operative Societies Act, 1959 as noted above - Decided against assessee.
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