2024 (9) TMI 1103

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....the income tax act, 1961 (the act) dated 19 October 2022 by the central processing Centre Bangalore made an adjustment on account of disallowance of deduction under section 80P(2)(d) with respect to interest income earned by these cooperative society from other cooperative banks amounting to Rs. 410,340/-, is dismissed. 2. Brief facts of the case shows that assessee is a resident Housing cooperative society, filed its return of income on 28/12/2021 for the impugned assessment year where the due date was 31/12/2021 declaring total income of Rs. 43,160/-. The assessee has earned interest from various cooperative banks on fixed deposit and interest of Rs. 4,016,247/- and Rs. 6670/- totaling to Rs. 422,917/-. Assessee claimed deduction under....

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....n 142, such return shall be processed in the following manner, namely:- (a) the total income or loss shall be computed after making the following adjustments, namely:-   (i) any arithmetical error in the return; ^68[***]   (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return;   ^69[(iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139;   (iv) disallowance of expenditure ^70[or increase in income] indicated in the audit report but not taken into account in computing the total income in the return;   (v) disallo....

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....ion. Thus, claim of deduction under section 80P(2)(d) is also not classified as incorrect claim. Merely because part of the interest is disclosed by the assessee is interest income in profit and loss account and part of the income shown by the assessee under the head income from other sources does not change the character of the income and consequent deduction of such income, if available. Therefore, the claim of the assessee in the return of income is also not an incorrect claim. 9. Thus, the adjustment of disallowance of deduction under that section is not permissible adjustment provided under section 143(1) of the act. Therefore the intimation passed under section 143(1) is not sustainable. 10. On the merits of the case, provisions....