TMI Blog2015 (10) TMI 1594X X X X Extracts X X X X X X X X Extracts X X X X ..... would fall within the scope of mutuality. Hence, in view of our above discussion, we do not find any infirmity in the order of the learned CIT(A) in holding that the interest income, commission income and policy charges, etc., received from non-members will not be eligible for deduction under section 80P. - As A.R. for the assessee has submitted that the assessee society has incurred some expenditure in the course of earning interest income and from doing the insurance of non-members-borrowers and that the expenditure so incurred is required to be deducted and only the net income is liable to be taxed, we find force in this contention of the assessee. Only the net income from non-members is required to be taxed. The Assessing Officer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee company had been providing credit facility to non-members and the interest and other income earned from non-members was not eligible for deduction under section 80P, as the same is restricted to the business of providing credit facilities to the members of the society only. It was submitted by the assessee that the impugned loan amount was given by the society to its employees which was incidental or conducive to the attainment of objects of the society. It was also submitted that the LIC agency was obtained and the insurance of the members was done for the purpose of securing the loan amount. The LIC commission and the policy charges were also incidental to the business of providing credit facility to its members and, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any or more of such activities, as mentioned in sub-section (2) of section 80P of the Act, shall be deducted. We are here concerned with the activity of carrying on the business of banking or providing credit facilities to its members by a co-operative society. The other activities mentioned in the relevant section are not carried on by the assessee society. Admittedly, the assessee is not in the business of banking. The other activity is of providing credit facilities to its members. Such credit facility has been restricted to the members of the society only and it does not include lending to non-members or even employees or staff members. In our view, the lending of amount on interest to staff members is not, in any way, connected or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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