A.O.allows deduction of proportionate cost, administrative and other expenses, if A.O. proposes to assess interest income earned from bank deposits.

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Last updated: 03 March 2021
Quick Summary
This ruling clarifies that if an Assessing Officer (AO) proposes to tax interest income earned by a cooperative society from bank deposits, they must also allow a deduction for proportionate administrative and other expenses. The case involved a cooperative bank claiming deductions under Section 80P, but the AO disallowed them based on lending to 'non-members'. The Tribunal's decision focuses on the principle of allowing related expenses when income is brought to tax.

Court :
ITAT Bangalore

Brief :
Both the appeals filed by the assessee are directed against the common order dated 12.06.2019 passed by Ld CIT(A), Mangaluru and they relate to the assessment year 2015-16 and 2016-17. Sincecertain common issues are urged in these two appeals, both the appeals were heard together and are being disposed of by this common order, for the sake of convenience.

Citation :
ITA 1289/BANG/2019

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