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TMI Blog2024 (4) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax (Appeals),[in short the ld. CIT(A) ], Surat, National Faceless Appeal Centre (in short the NFAC ), dated 21.04.2023 and 10.11.2022 respectively, which in turn arise out of separate assessment/rectification orders passed by Assessing Officer u/s 154 and 143(3)of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. First, we shall take assessee`s appeal in ITA No.115/SRT/2024 for assessment year 2017-18. The grounds of appeal raised by the assessee in ITA No.115/SRT/2024, are as follows: (1) The learned CIT(A) was not justified in denying relief u/s 80P(2)(d), particularly when there was a binding precedent emerging from the facts. (2) Alternatively, the CIT(A) ought to have granted relief u/s 80P(2)(a)(i) of the Act. (3) The learned CIT(A) grossly erred by narrating the entire facts of AY. 2018-19, in the appeal he was dealing for the AY.2017-18. (4) All of the above grounds are prejudice to one another. (5) The appellant craves leave to add, alter or vary any of the grounds of appeal. 3. The appeal filed by the assessee in ITA No.115/SRT/2024, for AY. 2017-18, is barred by limitation by 386 days. The assessee moved a petition for condonation of delay, reque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit, Ld. Counsel for the assessee, argued that assessee has claimed the deduction under section 80P(2)(d) of the Act in respect of interest received from the Co-operative Bank. The Ld. Counsel also stated that this issue was raised before the ld. CIT(A) by way of alternatively ground that deduction claimed by the assessee under section 80P(2)(d) of the Act, in respect of interest received from Cooperative bank is allowable. The Ld. Counsel submitted that it is a covered case and this Tribunal has allowed in many cases the deduction under section 80P(2)(d) of the Act in respect of interest received from Co-operative Bank. Therefore, deduction claimed by the assessee u/s 80P(2) (d) of the Act, in respect of interest received from Co-operative Bank should be allowed. 8. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 9. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of interest contemplated by Section 80AB should take in the net amount arrived at after meeting the expenses deductible from that item under the provisions of the Act as explained above. That is not the case here. Therefore, Section 80AB has no application to the facts of these cases. The interest paid on the loan transactions has to be deducted from the business income, and not from the interest received from the bank on the fixed deposits. The assessees were therefore right in the submissions which they made before the Commissioner of Income-tax in the revision petitions which they filed. This aspect of the matter has been overlooked by the Commissioner in passing the order, exhibit P-5.' 8.1 Similarly, in the case of Doaba Co-operative Sugar Mills Ltd (supra), the Punjab Haryana High Court has held as under: '5. The contention of Mr. Gupta, learned counsel appearing for the Revenue, is that the Tribunal was wrong in allowing deduction under Section 80P(2) (d) of the Act because it is not established that the assessee had derived the interest by investing all the amount of surplus funds. It is further contended by Mr. Gupta that the assessee has paid interest to Jal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was right in law in allowing deduction under Section 80P(2)(d) of the Income- tax Act, 1961 in respect of interest of Rs. 4,00,919 on account of interest received from Nawanshaln Central Cooperative Bank without adjusting the interest paid to the hank. Therefore, the reference is answered against the Revenue in the affirmative and in favour of the assessee.' 8.2 Moreover, the Bombay High Court in the case of Bai BhuribenLallubhai (supra) has held that the purpose for which the assessee borrowed money had no connection whether direct or indirect with the income which she earned from the fixed deposit and that she was not entitled to the deduction claimed under Section 12(2). The High Court held that if an assessee had no option except to incur an expenditure in order to make the earning of an income possible, then undoubtedly the exercise of that option is compulsory and any expenditure incurred by reason of the exercise of that option would come within the ambit of section 12(2) of the Indian Income-Tax Act but where the option has no connection with the carrying on of the business or the earning of the income and the option depends upon personal considerations or upo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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