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2021 (1) TMI 912 - 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 - CIT(A) held that since 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, and hence, the A.O. has correctly denied the claim of deduction u/s 80P(2)(a)(i) - HELD THAT:- In the instant case, 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. The 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 As decided in in the case of M/s.Vikasha Vividhoddesha Sahakara Sangha Niyamitha [2019 (11) TMI 1565 - ITAT BANGALORE]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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