9911796707
TMI Blog2013 (11) TMI 1379X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent-assessee had earned income of Rs.31.5 lacs as "Investment Manager" from Fareast Corporation Pvt. Ltd. and M/s European Investment Ltd. but this income should be taxed under the head "income from other sources". Tribunal, it is submitted has erred in holding it as "business income". 2. The respondent-assessee, an individual, was carrying on six different types of business activities as per paragraph 3.1 of the assessment order. For the purpose of the said activities, the assessee had also setup six different sole proprietorship concerns. The details of the sole proprietorships and the activities carried on are as under:- " S. No. Name of Concern Business Activities 1. M/s Ashok Mittal & Co Dealing in shares, investments loan f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her observed that the claims were too high when compared to the business carried out by the each proprietary concern. He accordingly disallowed on ad-hoc basis some portion of the expenditure incurred by M/s Litolier. First appellate authority agreed with the Assessing Officer. On further appeal before the tribunal, an order of remand was passed for fresh decision after examining the veracity of claim by the assessee. 4. In the second round, the Assessing Officer examined claim of Rs.31,50,000/- received as management and advisory fee from Fareast Corporation Pvt. Ltd. and M/s European Investment Ltd. under the heading "Miscellaneous Income". The Assessing Officer has held as under:- "3. Miscellaneous Income That during the year the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment manager under this agreement, the company agreed to pay sum of Rs.1,50,00/- per month. The assessee was asked to indentify expenses attributable to Misc. expenses vide not sheet entry dated 19.11.2010. However, the assessee has stated that he has not maintained the separate records of expenses incurred by M/s Litolier against different sources of income and segregated the expenses in the ratio of income earned which is not acceptable especially when this income is assessed as income from other sources. This income cannot be accepted to be business income since the assessee has not been able to identify and substantiate the expenses incurred for earning such income. There does not appear to be any expenses on account of infrastructure, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent-assessee were allowed by the Assessing Officer under the head "other business income" of M/s Litolier and there was no dispute that expenses were incurred by M/s Litolier. He has held:- "4.1 After examining the nature of these receipts and the accounting treatment in the appellant's books of accounts, I am of the opinion that the Assessing Officer has not appreciated the facts. The controversy regarding whether the income is to be treated as business income or as Income from Other Sources has arisen on account of the appellant crediting the gross amount of Rs.31,50,000/- to the Profit & Loss Account of M/s. Litolier, which is engaged in the business of trading of lam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seen that the Assessing Officer has not disallowed any portion of the expenditure claimed by M/s. Litolier, thus, implicitly accepting that the expenditure is duly incurred. Whether the expenditure is deducted against the Income from Business of M/s. Litolier or against the Income from Other Sources, it results in no difference to the taxable income. Moreover, it is seen that the appellant also derives income from business of speculation, dealing, in shares, investments, loan finance and related activities in the name of M/s Ashok Mittal & Co. Hence the management of the funds and assets of the two afore-mentioned companies is along the lines of the business activity of the other proprietorship concern. I find no cogent reason in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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