TMI Blog2021 (12) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 80P(2)(a)(i) of the Act. If there is any income arising to the co-operative society from the non-members that will not be subject to deduction under section 80P(2)(a)(i) of the Act As relying on STATE BANK OF INDIA (SBI) VERSUS COMMISSIONER OF INCOME TAX [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] it is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the State Bank of India is not being attributable to the business as envisaged under the provisions of the Act. Thus the same cannot be deducted under section 80P(2)(a)(i) of the Act. Thus there remains no ambiguity that income received by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961 (here-in-after referred to as the Act ) relevant to the Assessment Year 2016-17. 2. In response to the notice of hearing Shri Ankit Chokshi has sent an email praying for adjournment. However, with the assistance of Ld.D.R we have gone through the record and found that the main issue involved in this appeal relates to exclusion of interest income earned from Nationalized Bank for claiming of deduction u/s.80P(2) of the Act. The Ld.CIT(A) has followed the judgment of Hon ble Jurisdictional High Court in the case of SBI 72 taxmann.com 64 and confirmed the disallowances. The Ld. First Appellate Authority has hardly made any detailed discussion in the impugned order. In view of above fact we declined the request for adjournmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... banks of ₹ 37,92,758/- would not qualify for deduction u/s.80P(2)(a)(i) of the Act. Therefore, the deduction u/s.80P is not allowable for the interest income of ₹ 37,92,758/-. (After allowing proportionate expenditure: Addition ₹ 19,79,690/-) 5. Aggrieved assessee preferred an appeal to the learned CIT (A) who confirmed the order of the AO. 6. Being aggrieved by the order of the learned CIT (A) the assessee is in appeal before us. 7. The learned DR before us vehemently supported the order of the authorities below. 8. We have heard the ld. DR and perused the materials available on record. The provisions of section 80P(2)(a)(i) of the Act provides the deduction to a co-operative society engaged in the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso find pertinent to note that recently, the Hon ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. v. CIT reported in 123 taxmann.com 161 has held that wherein, the primary agricultural credit societies were held to be entitled to the benefit of the deduction contained in Section 80P(2)(a)(i) of the Act, notwithstanding the fact that the society may also be giving loans to its members which are not related to agriculture. However, if it is found that there are instances of loans being given to the non-members, profits attributable to such loans obviously were not liable to be deducted. The essence of this decision is that absolute denial of deduction under Section 80P(2)(a)(i) of the Act to the assessee's (cooper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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