Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (3) TMI 1007 - AT - Income TaxDisallowance of deduction u/s 80P(2)(i) - addition of gross interest income treating interest received from banks and govt. securities as income from other sources u/s 56 - Held that:- Major portion of interest income is from government securities and are not in the nature of short term deposits. Therefore, the facts of the case are clearly distinguishable from the facts discussed in the case of Totagars Co-op. Sale Society Ltd. vs. ITO (2010 (2) TMI 3 - SUPREME COURT) and that of co-ordinate bench in the case of Jafari Momin Vikas Co-op. Credit Society Ltd. [2014 (1) TMI 481 - ITAT AHMEDABAD]. This interest income is on investments not of short term nature except bank interest which too includes interest on Fixed Deposits. In these circumstances, we are of the view that as the assessee suo moto has given a proposition of taxing the interest and commission income on investments to be taxed u/s 56 of the Act and has also shown that proportionate expenses of ₹ 3,31,828/- have been incurred to earn the above income and the same has duly been accepted by the assessing authority, so we find it justified that Assessing Officer has rightly taxed the interest income of ₹ 2,16,689/- as income from other sources. From going through the above provisions it is very clear that the assessee is eligible for deduction of ₹ 50,000/- under section 57 of the Act and the same should have been allowed by the Assessing authority. Partly allow the appeal of assessee and accordingly the addition made by Assessing Officer shall be reduced to ₹ 1,68,305/- [Rs.2,16,689/- minus ₹ 50,000/- deduction u/s 80P(2)(c)].
|