TaxTMI 
TaxTMI 
2024 (7) TMI 1084
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....er referred to as "the Act" for short], for the Assessment Year (AY) 2018-19. 2. Grounds raised are as under :- "1. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in dismissing the appeal filed by Appellant, thereby, upholding the order of the learned AO and confirming the addition amounting to INR 75,33,834. 2. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in not appreciating the fact that learned AO has wrongly applied 41.1% as against 59.9% while calculating proportionate expenditure to be allowed under section 57 of the Act. 3. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in not apprec....
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....e Assessing Officer applied a proportionate rate of 41.1% to the total interest income earned by the assessee to calculate the interest allowable against the said income which came to Rs. 56,46,254/-and accordingly the balance taxable income was worked out at Rs. 80.91 lakhs. Since the assessee had already included Rs. 5.57 lakhs in its total income, the balance amount of Rs. 75.33 lakhs was added to the income of the assessee. The working of the Assessing Officer computing the addition to be made to the income of the assessee so made is at paragraph No. 5 of his order as under:- "5. After considering reply of the assessee and discussion made in the foregoing paragraphs deduction u/s 57 of the Act is recomputed as under :- Interest recei....
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....visions of Section 57 of the Act, had apportioned 41.1% of the total interest income earned by the assessee for the said purpose. Drawing our attention to the calculation of the Assessing Officer, as reproduced above, he pointed out that Rs. 1.37 crores was the interest received by the assessee from the scheduled banks. It was against this income which was held to be taxable under the head 'income from other sources' u/s 56 of the Act that expenses relatable to the earning of the said income were to be allowed to deduction in terms of provisions of Section 57 of the Act as per the Assessing Officer. The Assessing Officer, he pointed out had apportioned 41.1% of the interest income earned by the assessee amounting to Rs. 56.46 lakhs, subject....
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....the ITAT's order assessee has been asked to clarify the pro-rata proportionate expenses claimed by you and justify as per books of account. Assessee has furnished reply and calculation of proportionate expenses has been given. The same is as under: Expenditure Ratio = Total Expenses 13987953/- * 100=85.15% Total Income 16427503/- Proportionate Expenses from Income of Bank Interest (Expense Ratio 85.15%*Bank Interest 2887397/-=24,36,277/-) 100 As per Assessment Order of Income-tax Officer, Baroda- Total Income as per Order 143(3) - 28,61,159/- Deduction 80P(2)(d) - 26238/- Less: Proportionate Expenses - 24,36,277/- Taxable 4,24,882/- TAXABLE INCOME - 4,24,882/-" 9. The ld. Counsel for the assessee con....