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2020 (9) TMI 275 - AT - Income TaxDeduction u/s 80P(2)(a)(i) - As per AO assessee was essentially doing the business of banking, and therefore, in view of insertion of section 80P(4) with effect from 1-4-2007, the assessee will not be entitled to deduction u/s 80P - HELD THAT: -Narration in loan extracts in the audit reports by itself may not conclusive to prove whether loan is a agricultural loan or a non-agricultural loan. The gold loans may or may not be disbursed for the purpose of agricultural purposes. Necessarily, the A.O. had to examine the details of each loan disbursement and determine the purpose for which the loans were disbursed, i.e., whether it is for agricultural purpose or non-agricultural purpose. In these cases, such a detailed examination has not been conducted by the A.O. There should be fresh examination by the Assessing Officer as regards the nature of each loan disbursement and purpose for which it has been disbursed, i.e., whether it for agricultural purpose or not. The A.O. shall list out the instances where loans have disbursed for non-agricultural purposes etc. and accordingly conclude that the assessee's activities are not in compliance with the activities of primary agricultural credit society functioning under the Kerala Co-operative Societies Act, 1969, before denying the claim of deduction u/s 80P(2) - the issue raised in these appeals is restored to the files of the Assessing Officer. - Directions to follow case THE MAVILAYI SERVICE CO-OPERATIVE BANK LTD. [2019 (3) TMI 1580 - KERALA HIGH COURT] - Appeals filed by the assessee are allowed for statistical purposes
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