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TMI Blog2023 (12) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... e revised grounds raised read as follows: 1. Grounds on section 154 of the Act: a. The notice issued under section 154 of the Act, is bad in law. b. The learned Assessing Officer is not justified in initiating a rectification proceeding u/s 154 of the Act, when there was no mistake apparent on record on the facts and circumstances of the case. c. The issue of whether the interest earned from banks out of the funds of the society was business income or income from other sources, was a debatable issue and no rectification ought to have been initiated, on the facts and circumstances of the case. d. The Learned Assessing Officer has not assumed proper jurisdiction and the order passed is bad in law on the facts and circumstances of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The appellant denies itself liable to be assessed to a total income of Rs. 26,45,057/- as against the income returned at Rs. 2,50,200/- for the assessment year 2017-18 on the facts and circumstances of the case. 3. The learned assessing officer is not justified in disallowing the claim of deduction under section 80P of the Act on the facts and circumstances of the case. 4. The learned assessing officer has erred in making disallowance of Rs. 23,94,857/- by stating that the interest income from business in not eligible for deduction under section 80P of the Act without appreciating that the appellant has received only Rs. 9,05,550/- towards interest from banks on the facts and circumstances of the case. 5. The learned assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,407/-. The assessment was completed under section 143(3) of the Act, vide order dated 27.12.2019. The AO, in the assessment completed under section 143(3) of the Act, disallowed the claim under section 80P of the Act to the extent of Rs. 23,94,857/-. Against the said Assessment Order, assessee filed appeal and the same is pending before the National Faceless Appeal Centre [CIT(A)]. 5. In the meanwhile, the AO passed an Order dated 29.01.2020, under section 154 r.w.s. 143(3) of the Act. In the said Order under section 154 of the Act, the AO made an addition of interest income of Rs. 9,05,550/- and arrived at the income of Rs. 44,56,157/-. The computation of income by the AO in the rectification order passed under section 154 of the Act re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant has considered the interest income of Rs. 9,05,550/- (i.e. Rs. 4,00,329/- (page 4) in P & L account and Rs. 5,05,221/- (Pg. 2 of paper book) in the computation) and arrived at a business profit of Rs,33,00,407/- and claimed the entire sum of Rs. 33,00,407/- as deduction under section 80P(2)(a)(i) and arrived at a taxable income of Rs. 2,50,200/- which represents income from house property and is not a subject matter of dispute. c. The case of the appellant was selected for scrutiny wherein it was proposed to disallow the claim of 80P(2)(a)(i) to the extent of interest income, earned from banks (purportedly Rs. 9,05,550/-) by placing reliance on the decision of the Hon'ble Karnataka High Court in the case of Totagars Co-operative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... U/s154 Income from House Property 2,50,200 2,50,200 Income from Business 33,00,407 33,00,407 Less: Interest income considered under other sources - (9,05,550) Income from other sources 9,05,550 9,05,550 Gross Total Income 44,56,157 35,50,607 Less: Deduction u/s 80P(2)(a)(i) 9,05,550 23,94,857 Taxable Income 35,50,610 11,55,750 f. Thus, it is humbly prayed before your Honours to; 1. Direct the learned assessing officer to reduce the interest income from the business profit and thereafter provide deduction of cost of funds and proportionate administrative expenses under section 57 of the Act against the interest income of Rs. 9,05,550/-. 2. Allow the deduction under section 80P(2)(a)(i) to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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