TMI Blog2021 (12) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... and gains that is attributable and/or pertains to the non-members shall not be allowed as deduction under Section 80P(2)(a)(i). Thus, the profits and gains attributable to non-members arising as a result of advancement of loans was held to be not an allowable deduction under Section 80P(2)(a)(i) of the Act. - Appeal of the assessee is dismissed. - ITA No. 1085/Ahd/2019 - - - Dated:- 2-12-2021 - Shri Rajpal Yadav, Vice President For the Assessee : Shri Ashwin Shah, AR For the Revenue : Shri Urjit Shah, Sr. DR ORDER The assessee is in appeal before the Tribunal against the order of learned Commissioner of Income-Tax (Appeals)-2, Ahmedabad [ CIT(A) in short] dated 16.05.2019 passed for Assessment Year 2016-17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 578 (Guj.), he partly confirmed the disallowance. The findings recorded by the learned CIT(A) read as under:- I have carefully considered the facts of the case, the assessment order and the written submission of the appellant. The AO has made the disallowance of claim of exemption of interest on FD with Corporation Bank, Bank of Baroda, Bank of India, Dena Bank and S. K. District Central Co.op. Bank Ltd. of ₹ 23,48,749/- stating that the appellant is a cooperative society and interest from banks is not allowable to society relying on the decision of Honorable Gujarat High Court in the case of State Bank of India Vs. CIT (Supra). 2.4. The appellant relying upon the decision of (TO Vs. Jafari Momin Vikas Co.op. Credit Soc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance disallowance. The grounds of appeal are partly allowed. 5. The learned First Appellate Authority has allowed the deduction of interest income earned from a Co-operative Bank; because a Co-operative Bank happens to be a society first and such deduction has been allowed under Section 80(2)(d) of the Act. So far as interest incomes earned from nationalized bank are concerned, those have been excluded from eligible amount for grant of deduction under Section 80P(2) of the Act. This finding has been recorded by the learned CIT(A) on the strength of the Hon ble Gujarat High Court judgment in the case of State bank of India vs. CIT (supra). 6. Before me, learned Counsel for the assessee placed reliance upon the judgment of Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tributable and/or pertains to the non-members shall not be allowed as deduction under Section 80P(2)(a)(i) of the Act. The pertinent observation of the Hon'ble Court is reproduced as under: Clearly, therefore, once section 80P(4) is out of harm's way, all the assessees in the present case are entitled to the benefit of the deduction contained in section 80P(2)(a)(i), notwithstanding that they may also be giving loans to their members which are not related to agriculture. Also, in case it is found that there are instances of loans being given to non-members, profits attributable to such loans obviously cannot be deducted. 8. Thus, the profits and gains attributable to non-members arising as a result of advancement of loans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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