2013 (6) TMI 795 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A)-XIX, New Delhi regarding assessment for AY 2009-10.

Issue 1: Treatment of interest earned on bank deposits

The Assessing Officer treated the interest earned on bank deposits as income from business or profession. The CIT(A) directed the Assessing Officer to assess the interest earned on bank deposits under the head income from business or profession. The Tribunal observed that the exceptions provided in Explanation to Section 73 were applicable to the case, and the interest earned on bank deposits should be treated as income from business and profession. The Tribunal upheld the decision of the CIT(A) in this regard, dismissing the revenue's appeal.

Issue 2: Classification of loss on purchase and sale of shares

The Assessing Officer treated the loss on sale and purchase of shares as speculative loss under Explanation to Section 73 of the Act. However, the CIT(A) held that the loss on sale and purchase of shares was not speculative loss and deserved to be treated as business loss. The Tribunal referred to previous judgments and held that the exceptions provided in Explanation to Section 73 were applicable to the case, and the loss arising from trading of shares cannot be considered as speculative loss. The Tribunal dismissed the revenue's appeal in this regard, upholding the decision of the CIT(A).

Issue 3: Set off of brought forward business losses and depreciation

The CIT(A) directed the Assessing Officer to set off brought forward business losses and depreciation against the interest earned on bank deposits by the assessee. Since the Tribunal had already decided in favor of the assessee on the treatment of interest earned on bank deposits and classification of loss on purchase and sale of shares, it upheld the decision of the CIT(A) regarding the set off of losses and depreciation. The Tribunal dismissed the revenue's appeal on this ground as well.

In conclusion, the Tribunal dismissed the revenue's appeal against the CIT(A)'s order, upholding the treatment of interest earned on bank deposits as income from business or profession, classification of loss on purchase and sale of shares as business loss, and the set off of brought forward business losses and depreciation.