9911796707
TMI Blog2001 (7) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... 1983-84, respectively, disregarding the provisions of section 80AB of the Income-tax Act, 1961?" The assessment years involved are 1982-83 and 1983-84, the relevant previous years being S.Y. 2037 and S.Y. 2038, respectively. The assessee claimed deduction of interest of Rs.3,007 and Rs.3,308, respectively, for both the years under section 80L of the Act as the said income was earned as interest from compulsory deposits. The Income-tax Officer disallowed the said claim and the assessee went in appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner upheld the assessment orders and being aggrieved the assessee carried the matter in appeal before the Tribunal for both the years. The Tribunal for the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputing the said income under each of the heads. In so far as the heads specified under items "A" to "E" in section 14 of the Act, it is not necessary for us to deal with the same for the present controversy. Under item "F" "Income from other sources" is to be computed. Section 56 of the Act provides the nature of income which is to be considered as falling under the said head and section 57 provides for deductions which are permissible for ascertaining the income specified under section 56 of the Act. Section 80AB falls in Chapter VI-A and the said Chapter deals with deductions to be made in computing the total income. Section 80AB provides for deduction to be made with regard to income included in the gross total income. It is stated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has earned interest income from compulsory deposits and is seeking deduction of the said interest income under section 80L of the Act. It appears that the assessee has also earned dividend income from certain shares held by it and for earning such dividend income the assessee had made borrowings on which it has paid interest. Therefore, in relation to dividend income there is a deficit as worked out under the provisions of section 56 read with section 57(i) of the Act. The stand of the Revenue is that the interest income earned on compulsory deposits has to be set off against such deficit in relation to the dividend account and if the net figure is negative, i.e., deficit, then the assessee cannot claim any deduction under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in section 57 and except for clause (iii) the interest income from compulsory deposits cannot be computed under any other clause. Section 57(iii) provides that any other expenditure which is not in the nature of capital expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income shall be deducted from such residuary income. In the present case, admittedly, no expenditure has been incurred for earning interest from compulsory deposits and hence there is no question of reducing the figure of interest income. Now in so far as the contention of the Revenue to set off one income against another income under the head "Income from other sources" is concerned, no such provision is found in secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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