TaxTMI 
TaxTMI 
1982 (7) TMI 168
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.... Rai Singh Nagar Kraya Vikraya Society. The ITO, therefore, treated this amount of Rs. 5,200 as the income of the assessee. The CIT(A) has confirmed the same. According to the CIT(A), the amount of Rs. 5,200 was accrued interest. He further observed that the assessee was following mercantile system of accounting and, therefore, the interest accrued was includible in the income of the assessee. He, therefore, confirmed the addition. Shri Ranka, the ld. Counsel for the assessee submitted that the interest of Rs. 5,200 was on sticky loan and, therefore, the same had rightly not been included in the income of the assessee. The D.R., on the other hand, has supported the order of the authorities below. The case that interest was with reference to....
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....income of the assessee. The relevant clauses in sub-s. (2) referred to earlier are to the following effect: 1. If the society is engaged in the carrying on the business of banking or providing credit facilities to its members. 2. If the co-operative society is engaged in the marketing of the agricultural produce of its members. 3. If the co-operative society is engaged in the purchases of the agricultural implements, goods, live stocks or other articles intended for agriculture for the purpose of supplying them to its members. 4. The ITO held that the assessee had not advanced any loan nor had in any way financed the above 13 persons from whom interest was received. According to him, these persons had regular business transactio....
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....ported as (1981) 129 ITR 821 (Guj), (1978) 115 ITR 709 (Kar), (1974) 94 ITR 129 (all) and (1980) 124 ITR 282 (Guj). He also referred to a de of the Jaipur Bench of the Tribunal in ITA No. 170 of 1980 dt. 30th April, 1980 for the asst. yr. 1976-77. The D.R. on the other hand has relied upon the decision of the Madras High Court in (1982) 135 ITR 355 (Mad). He submitted that this was a direct case on the application and scope of s. 80P(2)(i) of the IT Act, and, therefore, the issue was directly covered under this. We have considered the rival submissions. We have also gone through the various judicial pronouncements relied on behalf of the assessee, as well as the Revenue. The revenue's reliance is on the decision of the Madras High Court in ....
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.... that main source of income of the society, Inter alia, was advancing credit facilities to the members and non-members. He further submitted that it is an admitted fact that the members to whom the credit facilities of deferred payment against goods supplied by the assessee society were the members of the society. He, therefore, urged that this decision on the contrary supported the case of the assessee. 6. In our opinion, the assessee deserves to succeed. The Hon'ble Madras High Court has clearly stated that where the primary object of a society is to provide credit facilities to its members whether as a loan or in any other way will be entitled to deduction under s. 80P(2)(i) of the IT Act. In view of the above discussions, we are unab....