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TMI Blog2018 (12) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... of expenses incurred for earning such commission and deduction has been separately allowed by the AO in respect of such expenses, there can be no distinct deduction u/s. 80P because of the negative income earned by the assessee from this activity. Therefore, countenance the view point of the first appellate authority on this point. The second component of the disallowance of deduction is interest received by the assessee on FDR with IDBI bank amounting to ₹ 3,01,034/-. Here again, it is noticed that the assessee earned interest income of ₹ 3,01,034/-. As per assessee’s own version given to the authorities, it incurred cost of funds at ₹ 3,32,967/- for earning such interest income. Once again, it is clear that the deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act, 1961 (hereinafter also called as the Act ) in respect of MSEB commission income and interest received on FDRs with bank. 3. Briefly stated, the facts of the case, are that the assessee is a Co-operative society engaged in the business of banking, providing credit facilities to its members. The return was filed declaring total income of ₹ 14,050/-. After claiming deduction of certain expenses, the assessee declared net profit of ₹ 3,61,567/- as against the gross receipts of ₹ 70,12,976/-. Deduction u/s. 80P was claimed and the assessee offered total income of ₹ 14,050/-. The AO observed that the assessee earned income by way of commission amounting to ₹ 1,33,390/- for collecting MSEB bills from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the AO. Under such circumstances, the question arises as to whether the assessee can still claim deduction u/s. 80P in respect of gross receipt of commission income when there is, in fact, a loss in this activity. 5. Section 80AB provides that : Where any deduction is required to be made or allowed under any section included in this Chapter under the heading `C- Deductions in respect of certain incomes in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of expenses incurred for earning such commission and deduction has been separately allowed by the AO in respect of such expenses, there can be no distinct deduction u/s. 80P because of the negative income earned by the assessee from this activity. I, therefore, countenance the view point of the first appellate authority on this point. 6. The second component of the disallowance of deduction is interest received by the assessee on FDR with IDBI bank amounting to ₹ 3,01,034/-. Here again, it is noticed that the assessee earned interest income of ₹ 3,01,034/-. As per assessee s own version given to the authorities, it incurred cost of funds at ₹ 3,32,967/- for earning such interest income. Once again, it is clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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