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TMI Blog2016 (8) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... tion without adjustment against the interest expenditure or not? The fact that interest was paid by the assessee on borrowed funds was very much on record as can be seen from the answer given by the petitioner to the queries raised by the Assessing Officer. In fact, in the reasons recorded also, Assessing Officer does not refer to any external material which could be the source of such income that the assessee had expended ₹ 11.22 croes by way of interest. Thus the Assessing Officer having examined the specific claim of deduction under section 80P(2)(d) of the Act, it would now not be open for him to reexamine the claim which would be based on mere change of opinion - SPECIAL CIVIL APPLICATION NO. 1124 of 2015 - - - Dated:- 24-8-2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is engaged in processing of milk and manufacturing of milk products and cattle feed. The assessee filed e-return of income for AY 200910 on 29.09.2009 declaring nil income. The assessment was completed u/s.143(3) and income was determined at ₹ 4,62,94,340 vide order dated 30.12.2011. 2. On examination, it is noticed that assessee has claimed deduction u/s.80P(2)(d) of ₹ 69,98,348/- . It is further noticed that the during the year under consideration, the assessee received total interest of ₹ 2,58,93,000/- out of which an amount of ₹ 69,98,348/- was interest received from Cooperative banks Cooperative Societies. It is also noticed that the assessee has paid interest of ₹ 11,22,07,000/-. As such, net in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x, Circle5 , judgement dated 12.7.2016 passed in Tax Appeal No.93/2008 and connected appeals. In such judgement, the Court held that deduction under section 80P(2)(d) of the Act would be available on the whole of the interest income and would not be adjusted against the interest expenditure which is not related to earning of such interest income. 5. Revenue however, supports the notice on the ground that the petitioner had not pointed out that the society had incurred interest expenditure of ₹ 11.22 crores. The interest income of ₹ 69.98 lacs had to be adjusted against such expenditure before any deduction could be claimed as was held by the Allahabad High Court in case of Commissioner of Income Tax v. Dugdh Utpadak Sahakari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the investment of amount received on sale of milk, milk products etc. from GCMM F Ltd. Similarly, the dividend of ₹ 77,2l,996/- has been claimed as deduction u/s.80P(2)(d) of the IT. Act as the amount was invested in earlier years from our own funds. Please note that we have not borrowed any funds for purchase of shares on which we earned dividend income and claimed as deduction u/s. 80P(2)(d). As the interest and dividend has been received from the Co-Op-erative Societies and earned out of investment made from our own funds, we are entitled to full deduction u/s 80P (2)(d) of the Income-tax Act. We have earned interest on short term deposit with coop Bank or from Co-op-Societies. We submits that no expenditure whatsoever in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... answer given by the petitioner to the queries raised by the Assessing Officer. In fact, in the reasons recorded also, Assessing Officer does not refer to any external material which could be the source of such income that the assessee had expended ₹ 11.22 croes by way of interest. Thus the Assessing Officer having examined the specific claim of deduction under section 80P(2)(d) of the Act, it would now not be open for him to reexamine the claim which would be based on mere change of opinion. Quite apart from the question of validity of such reasons, in view of judgement of this Court in case of The Surat Vankar Sahakari Sangh Ltd (supra) in view of settled principles of law, reopening would not be permissible. 10. In the result, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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