Deduction U/s. 80P not allowable to Co-operative society if it provides Credit facility to other than members

ITO Vs M/s. Siddasiri Pattin Souharda Sahakari Niyamit (ITAT Bangaluru)

In this case assessee-society was involved into giving funds to the non-members. It could not be termed as co-operative society meant only for its members and providing credit facilities to its members, hence assessee was not entitled to deduction under section 80P(2)(a)(i) of Income Tax Act, 1961 because the principle of mutuality is not followed.

ITAT remand the appeal to the file of the CIT (A) to decide the issue afresh in the light of  observations made in order.