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TMI Blog2010 (1) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Tolani, A.K. Garodia, JJ. Rajesh Arora, C.A. for the Appellant B.K. Gupta, Sr. DR. for the Respondent ORDER A.K. Garodia, Accountant Member:- 1. All these appeals are assessee's appeals directed against combined order of Ld CIT(A)-III, New Delhi dated 26.5.2009 for assessment year 2001-02, 2002- 03 and 2003-04. Since identical issue is involved in all the three years, all these appeals were heard together and are being disposed off by this common order for the sake of convenience. 2. Since the issue involved is identical in all the three appeals, we reproduce the ground of appeal from assessment year 2001-02 i.e. in I.T.A. No. 3361/Del/2009. "The Ld CIT(A) has erred in law and facts iof the case in trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore Ld CIT(A). It is held by the Ld CIT(A) also that interest income is assessable under the head income from other sources only. Regarding expenses claimed by the assessee, it was held by Ld CIT(A) that essential expenses which are required to be incurred for retaining the status of the company has to be allowed as expenditure incurred for the purpose of earning of interest income and hence such expenditure has to be allowed as deduction u/s 57(iii) of the IT Act. In this regard, he has placed reliance on the judgment of Hon'ble Allahabad High Court rendered in the case of CIT v. Ramapur Timber and Turnery Co. Ltd. as reported in 129 ITR 58 (Alld.). He has also relied upon the judgment of Hon'ble Calcutta High Court rendered in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee has to be assessed as business income. At this juncture, it was enquired by the Bench as to whether the assessee got registration from RBI as a Non Banking Financial Co. (NBFC). It was also pointed out by the Bench that a clear finding is given by the Assessing Officer that the assessee company is not engaged in money lending business and in reply nothing could be brought on record by the Ld AR of the assessee to show that the assessee is engaged in the business of money lending. It was also submitted that the assessee company is not registered with RBI as a NBFC. Reliance was placed on various judicial pronouncements as under:- a) CIT v. Paramount Premises (P) Ltd. 190 ITR 259 (Bom.). b) CIT v. Karnal Co-operative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company, we are of the considered opinion that interest income earned by the assessee company is assessable as income from other sources and not as income from business. 9. Regarding various judgments cited by Ld AR of the assessee, we find that these judgments are not applicable in the present case because the facts are different. In the case of CIT v. Paramount Premises (Pvt.) Ltd (supra), the interest income was earned by the assessee in that case on delayed receipts of installments. In that case some interest was received on idle funds and fixed deposits also but the assessee was engaged in that case in a business of builders and idle amounts were deposited with banks and given on loans on temporary basis and under these facts, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case are different and hence this judgment is of no help to the assessee. Regarding another judgment of Hon'ble Madras High Court rendered in the General Corporation Ltd (supra) also, we find that in this case also, the facts are different. In that case, the production in mining business of the assessee was stopped on account of cyclone and the assessee company did some prospecting work and incurred expenditure with a view to resume production. Under these facts, it was held that the business has not stopped where the assessee started prospecting to find out whether the business could be carried on and incurred expenditure in order to resume production. In the present case, the facts are different and hence this judgment is also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the paper book, the ld CIT(A) has already allowed deduction on account of various expenses which are necessary for retaining the status of the company such as audit fees, filing fees, general charges, professional charges and in addition to this, the Assessing Officer has already allowed deduction on account of interest expenses and further expenses debited by the assessee in the PandL A/c are on account of salary, bonus, conveyance, staff welfare and service tax. Now, the question is whether these expenses can be considered as expenses necessary for retaining the status of the company. We are of the considered view, that these expenses are not necessary for retaining the status of the assessee company and hence as per this Tribunal deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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