TaxTMI 
TaxTMI 
2013 (8) TMI 1199
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....and justice. 2. That the order of the Assessing Officer as upheld by the Commissioner of Income tax (Appeals) Chandigarh holding that the income of Rs. 9,62,280/- out of the amount of interest received from commercial banks as income from other sources and that too setting off/allowing expenses attributable to the earning of the said income @ 1% more particularly when the loans raised have been deposited in the banks and have earned interest under consideration as per the provision of the law in thefacts and circumstances of the case is bad in law and needs to be set-aside. 3. That the order of the Assessing Officer as upheld by the Commissioner of Income tax (Appeals) Chandigarh disallowing claim of the appellant u/s 80P(....
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....wing the decision of Hon'ble Punjab & Haryana High Court in assessee's own case in ITA No. 643/2010 vide order dated 10.5.2011, interest received from various banks was held to be income from other sources and not eligible f or deduction u/s 80P. Action of the Assessing Officer was confirmed by the ld. CIT(A). 5 Before us, the ld. counsel of the assessee fairly admitted that no doubt the Hon'ble High Court has clearly held that interest from bank is to be treated as income from other sources and not eligible for deduction u/s 80P(2)(a) (i) of the Act has to be allowed. However, at the same time if it is treated to be the income from other sources then the expenditure incurred for earning such income has to be allowed in terms....
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.... is concerned, it was admitted before us that the assessee has not borrowed any amount for the purpose of making FDRs therefore, interest paid on the borrowings cannot be allowed as deduction u/s 57 (iii). The Hon'ble Supreme Court in case of CIT V. Dr. V.P. Gopinath (2001) 248 ITR 449 (S.C) has held accordingly . In that case that the assessee received interest from the bank on the fixed deposit which was income in his hands and it could stand diminished only if there was a provision in law permitting such diminution. There was no such provisions of law and the interest on the loan taken from the bank did not reduce his income by way of interest on the fixed deposit. On the above facts it was held as under: "Held, that the int....
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....se of the appellant, the entire interest payable does not pertain to incomes, eligible for deduction u/s 80P(2)(a) (i) of the Act. Hence, if the disallowance of interest payable is made u/s 43B, the appellant will be eligible for deduction u/s 80P(2) (a)(i) of the Act only in respect of the interest, which pertains to the income eligible for deduction under this section. As it will not be possible to separately work out the amount of interest payable u/s 43B in respect of the income eligible for deduction u/s 80P(2) (a)(i) and incomes not so eligible; the Assessing Officer is directed to restrict the disallowance of interest payable u/s 43B of the Act on proportionate basis only in respect of income, which is not eligible for deduction u/s ....
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....ponse to the query it was stated that the assessee was treating the immovable property as its capital asset and therefore, any gain received should be treated as capital gain. The Assessing Officer did not accept the submissions and treated the income of Rs. 1,45,22,463/- as business income. Action of the Assessing Officer has been confirmed by the ld. CIT(A). 14 Before us, the ld. counsel of the assessee reiterated the submissions made before the Assessing Officer and the ld. CIT(A). 15 On the other hand, the ld. DR for the revenue strongly supported the order of Assessing Officer and the ld. CIT(A). 16 After considering the rival submissions we agree with the observations of the Assessing Officer that the assessee was to grant lo....