TaxTMI 
TaxTMI 
2001 (10) TMI 62
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.... considering the claim for deductions under section 80P(2) of the Income-tax Act, 1961, made by the assessee he disallowed proportionate expenses relatable to such income and the net income in respect of profits and gains of the activities with its members, which was made on estimated basis, the income of the assessee was increased to Rs.78,635. The Appellate Assistant Commissioner did not agree with the Assessing Officer and allowed deduction of the entire expenses without dividing it proportionately. The Tribunal finally held that as the assessee was carrying on business which was indivisible, the proportionate expenses incurred for carrying on such business cannot be separated between business activity with members and business activ....
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....d. [1971] 82 ITR 452 (SC), would not apply to the facts of the present case. However, we are unable to sustain it. The allowability of expenses while computing the net taxable income does not depend on the question of exemption and taxable in part where the activity is one and indivisible which is well settled by the apex court. The case before the apex court was that the assessee was engaged in the cultivation of sugarcane and manufacture of sugar. While the income derived from cultivation was exempted from income-tax, as agricultural income, the income from the activity of the manufacturing activity is not exempted. The assessee, manufacturer, who was carrying it on as a single indivisible activity claimed all expenses laid out wholly....
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....n view of the fact that a perusal of the question itself disclosed that income from various ventures was earned in the course of one indivisible business, the impugned order upholding the apportionment of the expenditure and allowing deduction of only that proportion of it which was referable to the taxable income, was unsustainable. The present is also the case alike. The nature of deductions under section 80P(2) refer to that where whole of the amount of gross profits and gains of business are attributable to any one or more of such activities. It is true that the scheme of sections 10 and 80P(2) is not identical but, at the same time it is apparent from the facts of the case that to draw any distinction no foundation has been laid in ....