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2023 (10) TMI 1266 - AT - Income TaxCalculation of deduction u/s 36(1)(viii) - quantum of total revenue from the operations[denominator] - reduction of interest on income tax refund from numerator (i.e. business income) as well as denominator (i.e. total revenue from operations) while calculating deduction - HELD THAT:- According to the assessee the amount of interest on income tax refund should be reduced from the total revenue from the operations also as same is not derived from the operations of the assessee bank. We agree with the arguments of assessee because interest on income-tax refund is not part of the business activity of the assessee and therefore, same cannot be form part of the total revenue from the operations also therefore, same should be excluded for the purpose of quantum of total revenue from the operations. We find that the Tribunal [2020 (4) TMI 13 - ITAT MUMBAI] has also directed the Assessing Officer to exclude the interest on income tax refund both from the profits and gains of the business as well as total revenue from the operations. We accordingly set aside the finding of the lower authorities and direct the AO to reduce the quantum of interest of income-tax refund from the total revenue from operations and thereafter compute the deduction u/s 36(1)(viii) of the Act accordingly. The grounds of appeal of the assessee are accordingly allowed.
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