COMMISSIONER OF INCOME-TAX CHENNAI Vs. ATTUR AGRICULTURAL PRODUCERS COOPERATIVE MARKETING SOCIETY LTD

JUDGEMENT

(1.) THE above tax case is directed against the order of the Income-tax Appellate Tribunal made in I.T.A.No. 689/Mds/2001, dated 6.1.2006 with reference to the assessment year 1996-1997.

(2.) THE Revenue is the appellant. THE assessee is a co-operative society engaged in the marketing of agricultural products. THE assessee advanced loans to its members and received interest therefrom. THE assessee had claimed deduction under Section 80P(2)(a)(i) of the Income Tax Act and the Assessing Officer negatived the claim of the assessee as the primary objective of the assessee is not that of the credit society that is engaged in the business of banking. On appeal, by the assessee, the Commissioner of Income tax (Appeals), following the appellate order for the assessment years 1993-94 and 1994-95 held that the assessee is entitled to deduction in respect of interest income received on advances made to his customers for the purpose of deduction under Section 80P of the Income Tax Act. THE said order of the Commissioner of Income Tax (Appeals), on appeal by the Revenue, was confirmed by the Tribunal.