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2022 (12) TMI 1013 - AT - Income TaxRevision u/s 263 - Deduction u/s 80P - deducting proportionate amount of interest expense while computing taxable interest from the nationalized banks - HELD THAT:- Interest income received from Nationalized Bank is not eligible for deduction u/s. 80P - In the Case of State Bank of India Vs CIT [2016 (7) TMI 516 - GUJARAT HIGH COURT] wherein it was held that interest derived by depositing surplus funds with bank not being attributable to business carried on by society, cannot be deducted under section 80P(2(a)(i). Hence, ground no. 1 is dismissed. Proportionate amount of interest expenses following in the case of Totagars Co-operative Sales Society Ltd. [2015 (4) TMI 829 - KARNATAKA HIGH COURT] wherein it was held that net interest income that is interest income reduced by administrative expenses and other proportionate expenses to said income had to be brought to tax u/s 56. Assessee is entitled for deduction of proportionate expenditure which it has incurred and the same needs to be calculated by the Assessing Authority. We therefore deem it fit to remit the matter back to the file of the AO, who will examine the case of the assessee and quantify the proportionate expenditure and pass appropriate orders by giving due opportunity to the assessee. Therefore we partly allow this ground of appeal.
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