BASUDEBPUR UTTARBARH SAMABAY KRISHI UNNAYAN SAMITY LTD.,PURBA MEDINIPUR vs. A.C.I.T., CIR - 27(2) NOW CIR - 27(1), HALDIA

The appeal of the assessee is filed belatedly by 323 days. In this regard, the assessee has filed an application for condonation of delay supported with an affidavit stating therein sufficient reasons for condonation of delay. Ld.Sr. DR has also not objected to condone the delay. Considering the prayer of the assessee in the application and the sufficient reasons for delay, I condone the delay of 323 days in filing the appeal and the appeal of the assessee is admitted for hearing.

It was submitted by the ld. AR that the only issue in the assesse’s appeal is regard to the addition representing proportionate interest of investment in excess of the capital and the reserve surplus to the extent of Rs. 56,96,933/-. It was the submission that the interest has been calculated at Rs.4,86,563/- and the addition has been made denying the assessee the benefit of deduction u/s. 80P (2)(a)(i) of the Act. It was the submission that in first place the assessee’s has not owned such an interest, in the second place even if the interest is to be added, the assessee’s is entitled to the deduction proceedings of 80P(2)(a)(i) of the Act in the respect of said interest. It was primarily submitted that the addition as made by the AO in respect of the proportionate interest may be deleted.

In reply the Ld.Sr. DR vehemently supported the order of the AO and the JCIT(A).

I have considered the rival submissions. A perusal of the profit and loss account of the assessee clearly shows that the assessee has not earned the interest of Rs. 4,86,563/-. The AO has calculated the probable excess investment over and above the capital and reserve surplus and has made the calculation of interest on proportionate basis by saying that the assesse has earned the interest of Rs.32,30,423/- on an investment of Rs.3,78,23,489/-. As it is noticed that the assessee has not earned such interest, the addition made by the AO itself is deleted.