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2011 (7) TMI 587 - ITAT, COCHINValidity of revisionary proceedings u/s 263 - dis-allowance of interest on the partner's credit balance as standing in the assessee's books, which stood claimed and allowed as a business deduction on ground of the non-carrying of any business by the firm/s during the year - assessee firm taken over by company - assessee contends to be in fact carrying on business as it was undertaking collection of interest accrued up to 31.03.2004 - Held that:- Lack of proper inquiry, where warranted, would by itself deem an order erroneous, prejudicial to the interest of the Revenue. CIT, opined that receipt of interest during the year would not amount to the conduct of business by the assessee, and the relevant interest income is liable to tax u/s. 176(3A) and not u/s. 28(i). In our view, the matter, before being subject to such conclusive findings, would be required to be factually determined. Its assessment as 'business' income, and allowance of interest u/s. 36(1)(iii) there-against, are patently contrary to the facts on record - Decided partly in favor of assessee.
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