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2016 (5) TMI 1153 - PUNJAB AND HARYANA HIGH COURT

2016 (5) TMI 1153 - PUNJAB AND HARYANA HIGH COURT - TMI - Deduction u/s 80P(2)(a)(i) in respect of interest received from employees who are not the members of the assessee-Society denied - Held that:- The Tribunal while accepting the appeal of the revenue and adjudicating the issue against the assessee had clearly noticed that the benefit under Section 80P(2)(a)(i) of the Act is available to the assessee where the interest is earned from the core activity of the assessee-Society and the interest .....

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MITTAL, J. 1. This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 (in short the Act ) against the order dated 28.4.2015 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Chandigarh Bench B , Chandigarh (hereinafter referred to as the Tribunal ) in ITA Nos. 847/Chd/2013 and 810/Chd/2013 for the assessment year 2010-11, claiming the following substantial questions of law:- i) Whether in the facts and circumstances of the case, the orders (Annexure A- .....

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e case the Learned Income Tax Appellate Tribunal is correct in law in upholding the expenses of 1% of income attributable to the earning of interest income under the provision of Section 57(iii) of the Income Tax Act, 1961? iv) Whether in the facts and circumstances of the case, the Learned Income Tax Appellate Tribunal has grossly erred in upholding the order of the Assessing Officer and reversing Commissioner of Income Tax (Appeals) Chandigarh with regard to the interest income of ₹ 27,1 .....

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erse more so when the earlier order of the Tribunal was a reasoned order and has not been even distinguished? vi) Whether on the facts and in the circumstances of the case the Learned Income Tax Appellate Tribunal was right in law in holding that the income by way of interest on loans advanced to its employees and the deposits held with schedule banks was chargeable to tax u/s 56 under the head income from other sources without allowing any deduction in respect of cost of funds and proportionate .....

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re A-1) framed the assessment at ₹ 37,73,963/- (rounded off ₹ 37,73,960/-) as net taxable income by levying income tax on the said income and disallowed various claims under Section 80P(2) (a)(i) of the Act. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity the CIT(A) ]. The CIT(A) vide order dated 22.5.2013 (Annexure A-2) partly allowed the appeal upholding the certain disallowance made by the Assessing Officer and the addit .....

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sing the order of the CIT(A) with regard to the disallowance of ₹ 27,19,241/- under Section 80P(2)(a)(i) of the Act being amount of interest received by the assessee on various loans advanced to its employees as a condition of service of its employees holding the income as 'income from other sources' and not 'income from business'. Hence, the present appeal by the assessee. 3. We have heard learned counsel for the appellant-assessee. 4. The assessee has filed one appeal aga .....

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s Punjab State Cooperative Federation of Housing Building Societies Ltd.) whereby the question has been decided in favour of the revenue. Accordingly, question No. (ii) cannot be held to be a substantial question of law. 7. Question Nos. (iii) and (vi) as have been sought to be raised now do not arise from the order of the Tribunal as no such plea was argued before the Tribunal. Thus, no substantial question of law emanates from the order of the Tribunal and, therefore, do not arise for consider .....

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ssessee had clearly noticed that the benefit under Section 80P(2)(a)(i) of the Act is available to the assessee where the interest is earned from the core activity of the assessee-Society and the interest earned from employees would not fall for such deduction under Section 80P(2)(a)(i) of the Act. The relevant observations of the Tribunal read thus:- 17. After considering the rival submissions we find that the Hon'ble Supreme Court has clearly held that deduction u/s 80P(2)(a)(i) of the Act .....

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