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2018 (8) TMI 2027 - AT - Income TaxDeduction claimed u/s 36(l)(viia) i.e. 10% of the rural advances - Rural limits would be eligible for deduction @10% under section 36(1)(viia) and the Branches mentioned below falling under Urban Areas as per the Census Department and hence not eligible for deduction @ 10% under section 36(1)(viia) - HELD THAT:- Assessing Officer has mislead himself by taking out the rural branches that are falling within 8Km from municipal limit and town planning scheme from the eligible deduction. Census Report misinterpreted in relation to the definition of the “Rural Branch” to that extent. The provisions of the Income Tax Act,1961 have to be read strictly and nothing which is not intended nor mentioned could be read or intrapolated. While the section clearly mentions with explanation as to what a scheduled bank is and what a rural branch of a schedule bank means and the Hon’ble High Court has defined as to what a Rural Branch means in relation to the place in which the Branch is situated, any attempt to expand the definition bringing into the explanation given with regard to any other section which is not relevant even for harmonious interpretation of the Act cannot be accepted. Hence, keeping in view the provisions of the Act, facts on the record and as the rural branches namely Daria, Khuda Ali Sher, Kaimbwala, Delhi Jounti Block, N.Delhi Bamnoli, Chandi Mandir, Dadu Majra, Bahadurgarh, and Sarangpur have been found to be situated in the Rural Areas / Villages wherein the population is less than 10,000 as required under section 36(1)(viia) read with Explanation (ia) below sub clause (viia) to Section 36 of the Income Tax Act,1961 the disallowance made by the Assessing Officer in relation to these Branches is hereby ordered to be deleted. The branches namely Kasauli, Palampur, Sankhol, Kot Fatta, Raipur Rani ,Nurpur, Kangra, Nalagarh, Nalagarh(ADB), Jandiala, Mustafabad, Ghagga, Begowal, Mehatpur, cheema, Shekhpura, Gardhiwala, Badni Kalan, Hadiyala, Dhillwan, Nagrota Bhagwan and Chachhrauli being the branches situated in the urban areas are not eligible for deduction @ 10% of aggregate advances. - Appeals of the assessee are partly allowed.
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