9911796707
TMI Blog2024 (7) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... O, and the AO is directed to verify as to whether the formula adopted by the assessee for apportioning interest expenses to the earning of interest income returned to tax u/s 56 of the Act is the same as that adopted in AY 2014-15 and accepted by the AO in assessment of that year. If found to be so, no addition is made to the income of the assessee. In sum and substance the AO is directed to apportion expenses for claim u/s 57 of the Act in the manner done in A.Y 2014-15. With the above direction the issue is restored back to the AO. The appeal filed by the assessee is accordingly allowed for statistical purposes. - Mrs. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Shri Dhinal Shah, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute being of the manner in which expenses of the assessee were to be apportioned to the earning of income u/s 56 of the Act. The Revenue authorities rejecting assesses apportionment and allocating expenses on a different basis which is being disputed before us. 4. The background of the case is that the assessee is a co-operative society registered under Gujarat Co-operative Societies Act, 1961, and engaged in the business of banking as well as providing of credit facilities to its members, collection of deposits from members for the purpose of lending it as well as investment of the same when the funds are not used for lending purposes. During the impugned year, the assessee was noted to have received total income of Rs. 2,27,56,020/-, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60/- Addition as discussed in para 4 above - Rs. 75,33,834/- Assessed total income - Rs. 80,91,594/- Total Income (rounded off) - Rs. 80,91,590/- 5. The matter was carried in appeal before the ld. CIT(A), but none appeared on behalf of the assessee before him and accordingly the ld. CIT(A), in the absence of any assistance from the assessee, reiterated the order of the Assessing Officer. 6. Aggrieved by the same, the assessee has come up in appeal before us. 7. At the outset itself, the ld. Counsel for the assessee fairly stated that it was a complete fault of the assessee for not appearing before the ld. CIT(A) and there was no reasonable cause with the assessee for not having appeared in the first appellate proceedings. Having said so, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us, and pointed out that the total expense incurred by the assessee was to the tune of Rs. 2.18 crores, of which Rs. 2.05 crores was the interest paid on Members deposit alone. That, it was these expenses which needed to be apportioned to the interest income earned by the assessee on investments which constituted 59.9% of the total income earned by the assessee. He pointed out that in the case of the assessee, for AY 2014-15, the Hon ble ITAT had directed the Assessing Officer to allow expenses incurred by the assessee in the earning of identical interest income which was held for not eligible for deduction u/s 80P(2)(a)(i) of the Act. Our attention was drawn to paragraph No.5 of the order of the ITAT in ITA No. 2227/Ahd/2017, order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see on account of allocation of interest expenses against the interest income earned / offered to tax under Section 56 of the Act. 10. Ld. DR fairly agreed with the same, though he stated that the calculation of the apportionment of expenses of the impugned year be restored back to the Assessing Officer to determine as to whether there were in the apportionment as agreed to by the Assessing Officer in AY 2014-15. 11. In view of the above and for the purpose of calculating the correctness of expenses apportioned by the assessee to the earning of interest income returned to tax under the head income from other sources , the issue is restored back to the Assessing Officer, and the Assessing Officer is directed to verify as to whether the formu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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