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TMI Blog2025 (4) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal that impugns the order dated 12.12.2022 of the Income Tax Appellate Tribunal, Cochin Bench in I.T.A.No.309/ Coch/2020 pertaining to the assessment year 2012-13. 2. The brief facts necessary for disposal of this I.T. Appeal are as follows: The respondent/assessee is a company engaged in banking business, and for the assessment year in question, it had declared taxable income of Rs. 901,06,81,840/-. The said return was later revised to correct the figure of total income as Rs. 900,94,29,530/-. In its return, the assessee had also claimed a deduction of Rs. 28.50 crores under Section 36(1)(viii) of the Income Tax Act [hereinafter referred to as the "I.T. Act"] being the special reserve created, in an amount not exceeding 20% of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable under Section 36(1)(viii) of the I.T. Act, the assessee preferred an appeal before the First Appellate Authority which allowed the claim of the assessee and sustained the figure of Rs. 28.5 crores claimed towards deduction under Section 36(1)(viii) of the I.T. Act. In the further appeal carried by the Revenue before the Appellate Tribunal, the order of the First appellate authority in favour of the assessee was sustained by the Appellate Tribunal. It is therefore that the Department is in appeal before us raising the following substantial questions of law: (i) Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal is right in law in its computation of the quantum of deduction u/s.36(1)(viii) of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not discernible from the accounts was the gross expenditure incurred for the eligible business. It was under these circumstances that the assessee had computed the proportionate expenses for the eligible business by taking the ratio of the income earned and expenditure incurred in respect of the entire business and applying the said ratio to the income earned in respect of the eligible business. The resulting figure representing the proportionate expenditure for the eligible business was reduced from the income earned in respect of the eligible business to arrive at the profit of the eligible business. Thereafter, 20% of that figure was taken for the purposes of deduction under Section 36(1)(viii) of the I.T. Act. We see no reason to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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