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2018 (10) TMI 1394 - AT - Income TaxDeduction u/s.80P(2)(c)(ii) - interest from nationalized bank - Held that:- We have perused the relevant materials available on record. It is a settled principle of law that the assessee is not entitled to deduction of the interest income accrued from the fixed deposit lying with the nationalized bank out of his surplus fund. Such was not required for business purposes. The said ratio has been upheld by the Jurisdictional High Court in the case of State Bank of India vs. CIT (2016 (7) TMI 516 - GUJARAT HIGH COURT). The assessee disputed the quantum of addition of ₹ 14,62,750/- as interest income instead of ₹ 9,64,984/-. Since the assessee in appeal before us disputed the quantum of addition, we find it fit to send the matter back to the file of AO to re-compute the disallowance of the interest income on the fixed deposit of the assessee lying with the nationalized bank. However, we further direct the AO to exclude and/or deduct the amount of interest expenditure incurred by the assessee on such deposits with the nationalized bank. The assessee be given an opportunity of being heard by AO and also to be allowed to rely upon the evidences in support of his case to be considered by the Ld. Assessing Officer. Appeal of the assessee is partly allowed for statistical purposes.
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