TaxTMI 
TaxTMI 
2014 (2) TMI 1346
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....bers and treating the same as not directly related with the objects of the society, is against law and facts of the case. 2. That order of the Ld. CIT(A), Jalandhar, confirming the disallowance of Rs. 14,27,433/- on account of non deduction of TDS from nominal members is against law and facts of the case. 3. That the Ld. CIT(A), Jalandhar, has erred in not appreciating that the term 'member' is not defined under the Income Tax Act, 1961 and that the definition of member as given in the Punjab Cooperative Societies Act includes both nominal and associate members with in its ambit. 4. That order of the Ld. CIT(A), Jalandhar, has erred in holding that the decision of Hon'ble Bombay High Court in Jalgaon D....
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....rying to make out is that interest has been paid to members of the Co-operative society and therefore it is not required to deduct tax at source as per provisions of section 194A(3)(I) and 194A(3)(I)(B) of the Act. The contention so raised is factually not only incorrect but also is not borne out from the facts and evidence available on record. The assessee co-operative society has itself provided bifurcation of the details of interest paid to members and nominal members i.e. non-members and non-members as under: 1. Nominal Members FDRs Accounts Rs.15,83,113/- 2. Nominal Members SB Accounts Rs.2,42,129/- 3. Non members FDRs Accounts Rs.5,47,849/- 4. Non members SB Accounts Rs.8,69,297/- ....
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....ted the books of accounts and furnished audit report has commented against column 27(a) of the audit report that compliance has been made with the provisions of Chapter XVIIB regarding deduction of tax at source. This is factually incorrect as the assessee has not deducted tax at source on the payments of interest made to nominal and non members. This fact has also been admitted by the counsel Sh. V.K.Prashar advocate in his written reply reproduced hereinabove. What is exempt from deduction of tax at source u/s 194A is the payment of interest made to members of the society and non else. It was, therefore, incumbent on the part of the assessee society to deduct tax at source on the payments of interest made to nominal and non- members. ....
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....The Ld. CIT(A) confirmed the action of the A.O. with regard to disallowance of Rs. 14,27,433/- for non deduction of tax at source from interest paid to nominal members and admission fees of Rs. 2,520/- received from nominal members. 4. The Ld. counsel for the assessee relied upon the submissions made before the ld. CIT(A). 5. The Ld. DR, on the other hand, relied upon the orders of both the authorities below. 6. We have heard the rival contentions and perused the facts of the case. In the present case, the disallowance has been made u/s 40(a)(ia) of the Act, with regard to the interest payments to the nominal members, since the assessee has failed to deduct tax at source of such payments made to the nominal members. The Hon'....
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...."or" should not be read as "and". Any interest income received by the co-operative society engaged in carrying on the business of banking activities from the members or non-members, is liable for exemption under this sub-clause. The assessee was a co-operative society carrying on the business of banking and extending credit facilities to its members and nominal members. The assessee claimed exemption u/s 80P(2)(a)(i). The Assessing Officer added interest derived from the loans advanced to the nominal members as income from other sources and disallowed the claim of the assessee that this should be treated as income derived from banking business which was eligible for exemption u/s 80P(2)(a)(i) . The CIT(A) and the Tribunal held that....