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2017 (6) TMI 231 - AT - Income TaxDeduction under section 80P eligibility - whether the assessee, being a co-operative society register under the Maharashtra State Co-operative Act 1960, enables its members to obtaining loans and to make deposits as per the bye laws of the society, can be equated to be engaged in the banking business or with the co-operative bank so as to be treated under exclusionary clause of sub-section 4 of section 80IP? - Held that:- We find that this issue has been decided in the case of Quepem Urban Co-Operative Credit Society Ltd vs. ACIT [2015 (6) TMI 573 - BOMBAY HIGH COURT] wherein held that the contention of the revenue that the appellant is not entitled to the benefit of Section 80P(2)(a)(i) of the Act in view of the fact that it deals with non-members cannot be upheld. This for the reason that Section 80P(1) of the Act restricts the benefits of deduction of income of co-operative society to the extent it is earned by providing credit facilities to its members. Therefore, to the extent the income earned is attributable to dealings with the non-members are concerned the benefit of Section 80P of the Act would not be available. In the above view of the matter, at the time when effect has been given to the order of this Court, the authorities under Act would restrict the benefit of deduction under Section 80P of the Act only to the extent that the same is earned by the appellant in carrying on its business of providing credit facilities to its members. - Decided in favour of assessee.
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