2023 (6) TMI 437

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....espect of interest income earned from nominal members. 3. Briefly stated, the facts of the case are that the assessee is a cooperative credit society engaged in the business of providing credits facilities to its members. During the year under consideration, the assessee received interest income of Rs. 36,20,022/- from its nominal members and claimed the same as deductible u/s. 80P. The AO did not allow the deduction on the net interest income of Rs. 3,90,600/-, which action came to be countenanced in the first appeal. Aggrieved thereby, the assessee has come up in appeal before the Tribunal. 4. I have heard the rival submissions and gone through the relevant material on record. It is seen that the extant issue of granting deduction o....

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.... of a society after registration and includes a nominal, associate or sympathizer member". 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 Maharashtra 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. 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' wit....

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....of the above discussion, we overturn the impugned order and direct to grant deduction u/s 80P(2)(a)(i), as claimed by the assessee. 5. Following the precedent, I allow this ground of appeal raised by the assessee. 6. The second issue of non-granting of deduction u/s. 80P in respect of income earned from `insurance fees' was not pressed by the ld. AR. The same is, therefore, dismissed as not pressed. 7. The third issue is about non-granting of deduction u/s. 80P in respect of Electricity Commission. The assessee carried out the activity of collection of electricity bills from customers and then depositing it with the Maharashtra State Electricity Distribution Company Limited (MSEDCL). For doing this activity, it was awarded commissi....