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2017 (3) TMI 146 - HC - Income TaxDeduction of expenditure incurred in earning income under Section 56 - assessee is a Thrift and Credit Society - ITAT allowed clam - Held that:- This Court is of the opinion that the ITAT’s reasoning cannot be faulted. Concededly the nature of the activities i.e. that which resulted in income under Section 80P and that which resulted in income from other sources are identical. This involves the collection, deposits and management of funds from the assessee’s subscribers/members. In other words, the source is inextricable to the nature of the expenditure. In the circumstances, all that the AO could have possibly done was to scrutinize the returns to find whether, having regard to the income derived under Section 56, the expenses claimed were extraordinary or seemingly disproportionate. In the present case, the very nature of the expenditure i.e. inextricability would, in the absence of any factual inquiry, lend credence to the assessee’s claim. Thus ITAT’s reasoning is sound and does not call any interference - Decided against revenue
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