TMI Blog2022 (11) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... ities shall be deductible in the computation of total income. The claim of assessee for deduction has been negated by the authorities below, inter alia, on the ground that it admitted certain Members, described as Nominal Members , who were neither entitled to dividend nor voting rights. On going through the above definition of Member , it becomes overt that the term Member also includes a Nominal Member. Once it is accepted that the assessee, governed by the Karnataka Act, made advances to certain Nominal Members from whom interest income was earned, there can be no doubt whatsoever that the deduction u/s 80P(2)(a)(i) has to be allowed. Taking note of the fact that the Citizen Co-operative Society Ltd. vs. ACIT [ 2017 (8) TMI 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction was claimed under 80P(2)(a)(i), in respect of credit facilities provided to two types of categories of members, who are regular and nominal/associate members. He disallowed the claim of deduction on the ground that credit facilities provided to non-members were not eligible for deduction. The ld. CIT(A) echoed the assessment order on this account. 4. I have heard both the sides and gone through the relevant material on record. The assessee Co-operative society is admittedly engaged in carrying on the business of banking and providing credit facilities. Section 80P(2)(a)(i) provides that in the case of co-operative society engaged in carrying on the business of banking or providing credit facilities to its members, the whole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned, there can be no doubt whatsoever that the deduction u/s 80P(2)(a)(i) has to be allowed. The Department has heavily relied on the judgment of Hon'ble Supreme Court in the case of Citizen Co-operative Society Ltd. vs. ACIT (supra) . That was a case in which Andhra Pradesh Mutually Aided Co-operative Society Act, 1995 was under consideration, which did not admit `Nominal Member within the ambit of the term Member . Recently, the Hon'ble Supreme Court in Mavilayi Service Co-Operative Bank Ltd. vs. CIT (2021) 123 taxmann.com 161 (SC) considered its earlier judgment in Citizen Co-operative Society Ltd. vs. ACIT (supra) vide para 46 of its order. Taking note of the fact that the Citizen Co-operative Society Ltd. vs. ACIT (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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