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Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: SHRI R.S. SYAL
आदेश / ORDER
PER R.S. SYAL, VP:
This appeal by the assessee arises out of the order
dated 16-11-2011 passed by the CIT(A) in National Faceless
Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961
(hereinafter also called ‘the Act’) in relation to the assessment year
2018-19.
The appeal is time barred by 616 days. The assessee has filed
an affidavit explaining the reasons for the delay. I am satisfied
2 ITA No.507/PUN/2023 M/s. Kamal Mahila Nagari Sahakari Patpedhi Maryadit
with the reasons. The delay is condoned and the appeal is admitted
for disposal on merits.
Briefly stated, the facts of the case, are that the assessee is a
cooperative society which furnished its return claiming deduction
u/s.80P(2)(d). Interest income, inter alia, included interest from
deposits with nationalized banks at a gross amount of
Rs.2,51,149/-. After deducting expenses amounting to
Rs.1,56,943/- therefrom, the assessee offered for taxation such
interest income at Rs.94,206/- on net basis. The Assessing Officer
made addition of Rs.2,51,149/- towards interest income. The ld.
CIT(A) noted that the action of the AO led to the double taxation
of Rs.94,206/-, firstly by suo motu offering to tax by the assessee
and then the disallowance of the full amount on gross basis also
including the net interest income. Aggrieved thereby, the assessee
has approached the Tribunal.
I have heard both the sides and gone through the relevant
material on record. It is seen from the assessee’s Profit and loss
account, a copy placed at page 8 onwards of the paper book, that it
earned interest on loans, interest from banks and interest on
3 ITA No.507/PUN/2023 M/s. Kamal Mahila Nagari Sahakari Patpedhi Maryadit
investments all totalling to Rs.6,56,01,410/- on gross basis.
Simultaneously, the assessee paid interest on various deposits all
totalling to Rs.4,09,92,369/-, giving percentage of interest expense
to the interest income at 62.49%. This percentage was applied
across the board on all types of gross interest incomes for
computing interest income eligible for deduction u/s 80P(2)(d).
That was accepted by the AO and not controverted on behalf of the
Revenue before the Tribunal as well. Naturally, when it came to
the interest from nationalized banks, the assessee did not claim
deduction u/s 80P(2)(d) on the same, but offered the income to tax
on the same pattern by reducing the gross income by 62.49%
towards interest expenses and offered net income of Rs.94,206/-.
The action of the ld. CIT(A) has ultimately resulted into denying
the deduction towards interest expenses from the gross interest
received from Nationalised banks at Rs.2,51,149/- and charging
the gross amount of interest to tax. Once the calculation of interest
expense and interest income has been approved by the AO and also
applied in computing the deduction u/s.80P(2)(d) on other eligible
interest income, such a deduction towards expenses needs to be
4 ITA No.507/PUN/2023 M/s. Kamal Mahila Nagari Sahakari Patpedhi Maryadit
allowed towards interest earned from banks as well for the purpose
of inclusion in the total income. I, therefore, order to reduce the
amount of proportionate interest expenses of Rs.1,56,943/- from
the gross interest income from nationalized banks, which would
eventually mean that net interest income earned from Nationalised
banks would be taxed at Rs.94,206/-. It was this amount originally
offered by the assessee in its computation of total income.
In the result, the appeal is allowed to this extent. Order pronounced in the Open Court on 19th May, 2023.
Sd/- (R.S.SYAL) VICE PRESIDENT पुणे Pune; िदनांक Dated : 19th May, 2023 सतीश आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The Respondent 2. 3. The Pr.CIT concerned 4. DR, ITAT, ‘SMC’ Bench, Pune गाड� फाईल / Guard file. 5. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
5 ITA No.507/PUN/2023 M/s. Kamal Mahila Nagari Sahakari Patpedhi Maryadit
Date 1. Draft dictated on 18-05-2023 Sr.PS 2. Draft placed before author 19-05-2023 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.
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