Sec. 80P(2)(a)(i) of Income Tax Act, 1961— Deduction — The assessee is a co-operative society registered under the Kerala Co-operative Societies Act, 1969. For the assessment year 2014-2015, 'Nil’ return was filed after claiming deduction u/s 80P of the I.T.Act. The reasoning of the AO to disallow the claim of deduction u/s 80P(2)(a)(i) of the I.T.Act was that the assessee was essentially doing the business of banking, and therefore, in view of insertion of section 80P(4) of the I.T.Act with effect from 01.04.2007, the assessee will not be entitled to deduction u/s 80P of the I.T.Act. In appeal, CIT(A) upheld the same. ITAT in appeal opined that 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 bit in this case, such a detailed examination has not been conducted by the A.O. At the time of assessment. Thus, ITAT allowed the appeal filed by the assessee for statistical purposes holding 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”.—SHOLAYOOR SERVICE CO-OPERATIVE BANK LIMITED vs. ITO.[2020] 26 ITCD Online 051 (ITAT-COCHIN)