2015 (10) TMI 1594

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..... ssessing Officer consequent to denial of its claim of deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 (for short "the Act"). 2. Brief facts of the case are that the assessee is a Co-operative Credit Society of the employees of Reserve Bank of India. The major activity of the assessee is in the nature of obtaining contributions from its members and lending the amount so received from such contribution to its members on interest. The interest so earned is distributed among the members. 3. The Assessing Officer noticed that the assessee had shown to have received interest income of Rs. 18,38,500, from persons other than members of the society. He also observed that the assessee had received insurance commission of Rs. 2,81,2 .....

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..... ssessee has vehemently stressed that the act of giving loan to the staff members of the society was incidental to the business activities of the assessee of providing credit facilities to its members. He has further stressed that the provisions of section 80P are of wider import as the relevant word used in respect of business income is the word "attributable" and not the word "derived" from such activities of the society, as are enumerated in section 80P. 6. The learned Departmental Representative, on the other hand, has relied upon the findings of the lower authorities. As per the provisions of section 80P, where an assessee is a co-operative society and its gross total income includes any income from the activities as referred to in the .....

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..... ges, etc. However, the commission income and policy charges received from non-members though the borrowers of the assessee society will neither fall within the purview of business activity of providing credit facility to its members nor the same 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. 9. At this stage, the learned 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 n .....

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