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TMI Blog2025 (5) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... all the appeals are similar. We decided to take up all the appeals together and pass a common order for the sake of convenience. Since the grounds raised by the assessee in all the appeals are identical, grounds of appeal raised for the A.Y. 2015-16 in ITA No. 2275/Bang/2024 is reproduced herein below for reference. "1. The Order of the learned Commissioner passed under section 250 of the Act is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant's case. 2. The Appellant denies to be assessed to tax on total income as determined by the learned AO of Rs. 42,94,690/- as against the total income reported by the Appellant of Rs. NIL on the facts and circumstances of the case. Tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59. The assessee filed their return of income and claimed deduction u/s. 80P of the Act. Thereafter, the case was selected for limited scrutiny through CASS and notices u/s. 143(2) and 142(1) were issued. The assessee appeared and furnished the details called for by the AO. Thereafter the AO intimated that the assessee is not entitled to claim deduction u/s. 80P(2)(d) of the Act on the interest income earned from the scheduled banks and co-operative banks. Thereafter, the assessee filed a revised computation and the AO observed that out of the total 224 members, 41 members are "C" class members and therefore denied the deduction claimed under Section 80P(2)(a)(i) on the entire interest income received from the members. Similarly, in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e heard the arguments of both sides and perused the materials available on record. 9. The only dispute involved in this appeal is against the disallowance of deduction claimed u/s. 80P(2)(a)(i) of the Act for the reason that the concept of mutuality ceases to exists when the nominal members are present and not entitled to share the profits or losses and also barred from holding voting rights. The AO as well as the Ld.CIT(A) had treated the nominal members as non-members / general public and held that since the assessee society is dealing with the non-members, the benefit granted u/s. 80P(2)(a)(i) could not be available to the society. 10. We are surprised to note that, how the authorities can give such findings even after the judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, the rules and the bye-laws for the time being in force but a reference to 'members' anywhere in this Act in connection with the possession or exercise of any right or power or the existence or discharge of any liability or duty shall not include reference to any class of members who by reason of the provisions of this Act do not possess such right or power or have no such liability or duty;" Considering the definition of 'member' under the Kerala Act, loans given to such nominal members would qualify for the purpose of deduction under section 80P(2)(a)(i)." 11. In view of the said judgment of the Hon'ble Supreme Court, we have no hesitation to hold that the assessee society is entitled for deduction u/s. 80P(2)(a)(i) of the Act ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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