2018 (10) TMI 1506 - HC - Income Tax

Deduction u/s 80I - Income derived from the business for the purpose of deduction - interest and Miscellaneous receipts - Held that - The income put under the head other income was treated as business income for the earlier assessment years also and the Tribunal pointed out that it was not a peculiar feature for the assessment year 1992-1993 alone. Confronted with this factual situation, department s representative accepted the same as business receipt. The department had accepted before the Tribunal that the interest and other miscellaneous receipts qualify for deduction under Section 80I of the Income Tax Act, 1961. As the department themselves have treated the same as business receipts for all the previous years and they also accepted for the year under consideration, it should be treated as business receipt. Thus, the Tribunal was fully justified in holding that they do not want to deviate from the consistency adopted by the Commissioner of Income Tax (Appeals) for the year under consideration as was done for the previous years. No substantial question of law.

Summary

Issues:
Interpretation of income as business income for deduction under Section 80I of the Income Tax Act, 1961.

Analysis:
The High Court of Madras heard an appeal filed by the Revenue against an order passed by the Income Tax Appellate Tribunal. The appeal was admitted based on the substantial question of law regarding the treatment of interest and miscellaneous receipts as income derived from business for the purpose of deduction under Section 80I of the Income Tax Act. The Tribunal's order was examined, which stated that the income classified under "other income" was considered as business income for previous assessment years as well, not just for the year in question. The department's representative accepted this classification as business receipts. Consequently, the Court concluded that the question of law did not arise for consideration since the department had consistently treated interest and miscellaneous receipts as business income for all previous years, including the year under review. The Court upheld the Tribunal's decision not to deviate from the consistency adopted by the Commissioner of Income Tax (Appeals) for the relevant year and previous years. Therefore, the appeal by the Revenue was dismissed, and it was held that the substantial question of law did not warrant consideration.