9911796707
|
Home
Issues involved: Determination of whether the interest income of the assessee should be assessed under the head 'Business' or 'Other sources'.
Summary: The High Court of Madras was tasked with deciding whether the interest income of the assessee should be assessed under the head 'Business' or 'Other sources'. The Income-tax Officer initially assessed the interest income under 'Other sources' due to the lack of a clear money-lending business. However, the Appellate Assistant Commissioner determined that the assessee was indeed engaged in money-lending activities post-partition, leading to the income being categorized as business income. Upon appeal by the Department, the Tribunal found that the assessee, despite being a minor, was involved in money-lending activities both before and after the partition. The Tribunal concluded that the interest income should be taxed under 'Income from other sources'. The Revenue argued that the Tribunal's findings did not support the assessee's money-lending business, citing legal definitions of 'business' from relevant cases. The Court referenced legal precedents to define 'business' as a systematic, profit-driven activity, emphasizing the need for a profit motive and organized dealings. Applying these principles to the case, the Court found that the assessee's consistent money-lending activities, interest earnings, and family background in money-lending indicated a clear business purpose. The interest income derived from these transactions was deemed as business income. In conclusion, the Court ruled in favor of the assessee, determining that the interest income should be assessed under the head 'Business'. The Court found sufficient evidence of a money-lending business conducted by the assessee, leading to the income being categorized as business income.
|
