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U.P. Co-Operative Cane Union ... vs Commissioner Of Income-Tax on 30 January, 1997

36. As regards the applicability of section 80P(2)(a)(i), we find that the assessee has given loans only to its members. Shri Patankar, manager, in his statement under section 132(4) at the time of search itself had stated that for drawing a loan, the person concerned must be a member of the society (p. 66 of the paper book). Further, the confirmation from the chairman placed at page 132 of the paper book reveals that the loans were provided only to members. The Hon'ble Supreme Court in the case of U.P. Co-operative Cane Union Federation Ltd. v. CIT (supra) has held that the definition of a member of a co-operative society should be taken from the relevant laws of the concerned state. As the society is incorporated under the Maharashtra Co-operative Societies Act, the definition of a member and nominal member has to be adopted from the said Act. As per these definitions (p. 90 of the paper book), members include nominal members also who are admitted as per the bye-laws and the bye-laws 74 to 88 of the society clearly state that the society can admit nominal members. In view of the above facts, the assessee satisfies the conditions laid down under section 80P(2)(a)(i) of the Act and hence, it is entitled to deduction under section 80P of the Act. The interest earned by the assessee accordingly will be exempt under this section. The cash credits, even if taxed, will be considered as income from the same business, i.e., providing credit facilities to the members and, accordingly, they will also be entitled to deduction under section 80P and thus, the entire income of the assessee is entitled to deduction under section 80P and, accordingly, no addition is sustainable in the hands of the assessee-society.
Supreme Court of India Cites 9 - Cited by 96 - S C Agrawal - Full Document

Chander-Mohan Mehta vs Assistant Commissioner Of Income Tax ... on 13 January, 1999

32. The decision of this Bench in the case of Chander Mohan Mehta v. Asstt CIT (supra) is distinguishable on the facts and the ratio laid down in that case cannot be applied to the facts of the present case. In that case, it has been held that where an incriminating document is found, then it should be either accepted or rejected in toto. In the present case, no incriminating material has been found in the course of search. Further, the genuineness of application forms has been rejected in toto where the assessee has not been able to prove the same. Accordingly, that decision cannot be applied.
Income Tax Appellate Tribunal - Pune Cites 24 - Cited by 27 - Full Document
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