2019 (7) TMI 1031

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....d in allowing the assessee's plea and ought to have considered that s per the statement of income filed by the assessee, the profits and gains of business or profession are negative i.e. (-) Rs. 20.44 Crores and the profits being negative the assessee is not entitled in deduction u/s 80P. 2. The CIT(A) ought to have appreciated that the assessee itself in the statement of income has taken out the bank interest of Rs. 15.96 Crores out of the 'profits and gains from business' and showed the same under the head income from other sources, which should not have been treated as entitled for deduction u/s 80P(2)(e). 3. The CIT(A) erred in treating the interest expenditure debited in the P & L Account and interest income shown separ....

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....Assessing Officer held that as per section 80P(2)(e) the assessee is not entitled for deduction u/s 80P of the act. According to the AO deduction is allowable only from the source of business and profession. Since the assessee derived loss from its business, it is held that assessee is not eligible for deduction u/sec. 80P, accordingly, disallowed the deduction claimed by the assessee and made the addition. 5. Aggrieved by the order of the Assessing Officer (AO), the assessee went on appeal before the ld. CIT(A). The ld. CIT(A) observed that the assessee had received the income from letting out of godowns to the extent of Rs. 1.11 crores and earned the dividend income of Rs. 3.43 crores. As per computation of income, the assessee derived ....

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.... loans from banks and the Government institutions for the purpose of its business and paid huge interest on the loans apart from earning interest from temporary parking of deposit with the bank. The assessee submitted that it has paid the interest to Government and banks on it's short-term borrowings to the tune of Rs. 51,02,54,703/- which is also partly relatable to the deposits made in the banks, hence, argued that before arriving the income from profession or business, the interest relatable to the earning of interest income required excluded from business income in which case it would result in positive income and argued that the assessee is entitled for deduction u/sec. 80P which the ld.CIT(A) has allowed and submitted that no interfer....