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the Assessing Officer had denied a portion of claim of deduction u/s 80P of the I.T.Act for the reason that assessee was essentially doing the business of banking and disbursement of agricultural loans by the assessee was only minuscule. Therefore, the Assessing Officer concluded to the extent of the disbursement of agricultural loan alone, assessee is entitled to deduction u/s 80P(2) of the I.T.Act. The Assessing Officer after perusing the narration of the loan extracts for the financial period 2009-2010 and 2013-2014, came to the conclusion that out of the total loan disbursement, only a minuscule portion has been advanced for agricultural purposes. The narration in loan extracts / audit reports by itself may not conclusive to prove whether loan is a agricultural loan or a non-agricultural loan. The gold loans may or may not be disbursed for the purpose of agricultural purposes. Necessarily, the A.O. had to examine the details of each loan disbursement and determine the purpose for which the loans were disbursed, i.e., whether it is for agricultural purpose or non-agricultural purpose. In these cases, such a detailed examination has not been conducted by the A.O. Further, the A.O. has not examined to what extent loans, if any, has been disbursed to non-members. we are of the view that there should be fresh examination by the Assessing Officer as regards the nature of each loan disbursement and purpose for which it has been disbursed, i.e., whether it for agricultural purpose or not.It is ordered accordingly.

Shanti Prime Publication Pvt. Ltd.

Sec. 80P(2)(a)(i) of Income Tax Act, 1961— Deduction— The assessee preferred stay applications seeking to stay the recovery of outstanding tax arrears. The relevant assessment years were 2010-2011 and 2014-2015. The assessee was a co-operative society registered under the Kerala Co-operative Societies Act, 1969. For the assessment years 2010-2011 and 2014-2015, 'Nil’ returns were filed after claiming deduction u/s 80P of the I.T.Act. The assessment orders were passed for assessment years 2010- 2011 and 2014-2015, wherein the Assessing Officer disallowed part of claim of deduction u/s 80P of the I.T.Act. The A.O. allowed deduction u/s 80P of the I.T.Act only proportionately to the extent of agricultural loan disbursed by the assessee and disallowed a portion of the claim of deduction u/s 80P(2)(a)(i) of the act in respect of disbursement of non-agricultural loan. the appeals filed by the assessee were rejected by the CIT(A) for assessment years 2010-2011 and 2014-2015.
Aggrieved by the orders passed by the CIT(A), the assessee has preferred these appeals before the Tribunal. Tribunal were of the view that there should be fresh examination by the Assessing Officer as regards the nature of each loan disbursement and purpose for which it has been disbursed, i.e., whether it for agricultural purpose or not. Tribunal have disposed of the appeals, the stay applications filed by the assessee were dismissed as infructuous. The appeals filed by the assessee were allowed for statistical purposes and the stay applications were dismissed. --- POOMANGALAM SERVICE CO-OPERATIVE BANK LIMITED vs. ITO.[2020] 23 ITCD Online 48 (COCHIN)