2014 (7) TMI 1300 - AT - Income Tax

Treatment given to the receipt of manufacturing services income - income from other sources OR business income - HELD THAT - We find that in Tribunal in A.Y. 2006-07 has set aside the issue to the file of the AO for examination of the facts and contentions afresh and to decide accordingly. As no distinguishing facts have been brought before us respectfully following the findings of the Co-ordinate Bench in 2013 (7) TMI 1130 - ITAT MUMBAI we set aside the issue to the file of the AO. The AO is directed to decide the issue afresh in the light of the findings given as per the directions of the Tribunal for A.Y. 2006-07. Appeal filed by the assessee is allowed for statistical purpose.

Summary

Issues:
1. Treatment of Income from Manufacturing services as income from other sources
2. Treatment of lease rental as income from other sources
3. Treatment of other income as income from other sources
4. Disallowance of deduction u/s. 35(1)(iv)

Analysis:

Issue 1: Treatment of Income from Manufacturing services as income from other sources
The appeal was against the order of the Ld. CIT(A)-22, Mumbai regarding the treatment of income from manufacturing services as income from other sources for A.Y. 2007-08. The Ld. Counsel for the assessee argued that the issues in the present appeal were similar to those in the assessee's own case for A.Y. 2006-07, which was decided by the Tribunal. The Departmental Representative agreed with this. The Tribunal noted that the Ld. CIT(A) had followed the findings of A.Y. 2006-07 in the present case. As the issues were interlinked due to the treatment of manufacturing services income, the Tribunal set aside the matter to the AO for fresh examination based on the findings of the Tribunal for A.Y. 2006-07.

Issue 2: Treatment of lease rental as income from other sources
The grievance regarding the treatment of lease rental as income from other sources was also considered in connection with the overall treatment of income from manufacturing services. The Tribunal's decision to set aside the issue to the AO for fresh examination was based on the interlinked nature of all the grounds raised by the assessee in the appeal.

Issue 3: Treatment of other income as income from other sources
Similarly, the treatment of other income as income from other sources was part of the overall dispute related to the characterization of income from manufacturing services. The Tribunal's decision to remand the matter to the AO for fresh consideration applied to this aspect as well.

Issue 4: Disallowance of deduction u/s. 35(1)(iv)
The disallowance of deduction u/s. 35(1)(iv) was another grievance raised by the assessee. However, the Tribunal's decision to set aside the issues to the AO for fresh examination did not specifically address this disallowance. The appeal was allowed for statistical purposes, indicating that the Tribunal's decision was based on procedural grounds rather than a substantive determination of the issues raised.

In conclusion, the Tribunal's decision in this case focused on the interlinked nature of the various grounds raised by the assessee regarding the characterization of different sources of income. The matter was remanded to the AO for fresh examination in light of the findings of the Tribunal in the assessee's own case for A.Y. 2006-07.