Case Law Details
M/s. Vijaya Bank Employees Housing Co-operative Society Ltd. Vs ACIT (ITAT Bangalore)
Conclusion: In present facts of the case it was observed by the Hon’ble Bench that where a deduction is necessary in order to ascertain the profits and gains, such deductions should be allowed. Profits should be computed after deducting the expenses incurred for business though such expenses may not be admissible expressly under the Act, unless such expenses are expressly disallowed by the Act.
Held: The assessee is a housing co-operative society whose activities is to acquire land and develop the same into sites and allot them to its members at a reasonable price. The assessee for the assessment year 2010-2011, filed the return of income on 13.10.2010 declaring excess of income over expenditure at Rs.21,57,631. The AO during the course of assessment proceedings, noted that the assessee was in receipt of interest income from bank of Rs.5,78,37,690 and also the assessee had claimed expenditure of interest paid on sites deposits of Rs.4,75,00,000.
The AO disallowed the claim of interest of Rs.4,75,00,000 by making following observations:-
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