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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 ..... provide deduction of cost of funds and proportionate administrative expenses as a deduction under section 57 of the Act for interest income assessed as Income from Other Sources . This prayer of the assessee has been accepted by the jurisdictional High Court in the case of Totgars Co-operative Society Ltd., Vs. ITO [ 2015 (4) TMI 829 - KARNATAKA HIGH COURT] In light of the above AO is directed to allow cost of funds and proportionate administrative expenses for earning interest income as deduction under section 57 of the Act. It is ordered accordingly. - Shri George George K, Vice President For the Assessee : Shri. Narendra Sharma, Advocate For the Revenue : Shri. Ganesh R Ghale, Advocate, Standing Counsel for Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistrative expenditure under section 57 of the Act on the facts and circumstances of the case. 3. The appellant denies the liability to pay interest under section 234A, 234B and 234C of the Act in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, period and on what quantum the interest has been levied are not in accordance with law and further are not discernible from the order and hence deserves to be cancelled on the facts and circumstances of the case. 4. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 5. In view of the above and other grounds that may be urged at the time of the hearing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer ought to have allowed cost of funds under section 57 of the Act against the interest income on the facts and circumstances of the case. 7. Without further prejudice and not conceding that the inference of Rs. 9,05,550/- was to be taxed as other income, the cost of funds and proportionate expenditure was to be allowed against the interest earned of Rs. 9,05,550/- on the facts and circumstances of the case. 8. The appellant denies the liability to pay interest under section 234A, 234B and 234C of the Act in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, period and on what quantum the interest has been levied are not in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... INCOME FROM BUSINESS OR PROFESSION 33,00,407 2. INCOME FROM CAPITAL GAINS 0 2. INCOME FROM OTHER SOURCES 9,05,550 3. ADJUSTMENTS OF CURRENT YEAR LOSSES 0 3. TOTAL (AFTER INTRA HEAD ADJUSTMENT) 6=(1+2+3+4)-5 44,56,157 4. LOSSES OF CURRENT YEAR SETOFF AGAINST 6 0 5. BROUGHT FORWARD LOSSESS SET OFF AGAINST (6-7) 0 6. GROSS TOTAL INCOME INCLUDING SPECIAL INCOME) 9=6-(7+8) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Sale Society reported in [2017] 395 ITR 611 . d. The learned assessing officer erroneously restricted the 80P deduction to Rs. 9,05,550/- and made a disallowance of Rs. 23,94,860/- (26,45,060-2,50,200/-), and passed the order of assessment under section 143(3) of the Act dt:27.12.2019 (Pg.16 of paper book), which ought to have been vice versa. e. The appellant has preferred an appeal against the said order, which is pending before the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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