Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 216 - AT - Income TaxRevision u/s 263 - assessee had earned interest income on investments made with co-operative bank - PCIT directed the A.O. to bring to tax the aforesaid interest income by denying the claim u/s 80P - submission of the learned AR is that when income is sought to be assessed on the said interest income, the expenses incurred for earning such income would be entitled to deduction u/s 57 - HELD THAT:- The Hon’ble jurisdictional High Court in the case of Totagars Co-operative Sale Society Ltd. v. ITO[2015 (4) TMI 829 - KARNATAKA HIGH COURT] had held when the assessee-co-operative society earned interest on deposits kept with scheduled banks only the net interest, i.e., the interest income reduced by the administrative expenses and other proportionate expenditure to earn the said income had to be brought to tax u/s 56. The assessee has not raised the plea before the PCIT that it has to be given deduction u/s 57 of the I.T.Act, in respect of expenditure for earning the interest income. However, inspite of such plea not being raised before the PCIT, we are of the view that since the Act prescribes for taxing only the net income (i.e. total income minus the expenses incurred for earning such income), this plea of the assessee has to be necessarily entertained, especially in the light of the judgment of Totagars Sale Co-operative Society [Supra} - Accordingly, the case is restored to the files of the A.O. The A.O. is directed to examine whether assessee has incurred any expenditure for earning interest income, which is assessed under the head `income from other sources’. If so, the same shall be allowed as deduction u/s 57 of the I.T.Act. The A.O. shall examine the aforesaid issue untrammeled by the direction of the PCIT in the impugned order passed u/s 263 - Appeal filed by the assessee is partly allowed for statistical purposes.
|