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TMI Blog2014 (6) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... see has rightly been allowed by the FAA - Decided against Revenue. Cessation u/s 41(1) of the Act - Refund of excess Bank processing charges – Held that:- Refund of bank processing charges and sundry balances returned back could not be taxed under the head income from other sources, that both the amounts should be assessed under the head income from business - income on cessation of liability pertain to section 41 of the Act, that assessee had rightly claimed the income under the head income from business/ profession - assessee was carrying on business during the year under appeal - both the items are to be treated as part of the business income of the assessee – Decided against Revenue. - ITA No. 795/Mum/2013 - - - Dated:- 4-6-2014 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Profession in nature and none of the expenses are relatable to any of the receipts i. e. incurred to earn of such receipts. (3)The appellant prays that the order of the CIT(A) on the above ground be set-aside and that of the AO be restored. (4)The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 2. Assessee-firm is engaged in the business of builders, constructors and suppliers of building materials, filed its return of income on 23. 03. 2009 declaring total income of Rs. 1, 46, 710/-. AO completed the assessment u/s. 143(3) of the Act on 21. 12. 2010 determining the income of the assessee at Rs. 51, 64, 480/-. 3. During the assessment proceedings, AO found that assessee had co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Assessee preferred an appeal before the First Appellate Tribunal (FAA). After considering the submissions of the assessee, FAA held that opening stock was converted into capital asset during the year, that on conversion of the stock-in-trade in capital asset in November 2007, the project had achieved its finality, that since a conversion was done during the year, it could not be said that assessee had not carried out any business activity, that AO was not trying in holding that loss from business/profession was not allowable. He directed the AO to allow the loss from business and profession. Referring to the order of the Prudential Insurance Company Ltd. (19 Taxmann. com. 292-Mumbai), he held that AO should allow set off of loss from bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted earlier. With these observations, Ground of appeal no. 1 is decided against the AO. 7. Next ground of appeal is about direction given by the FAA to the AO in respect of refund of excess bank processing charges and cessation of liabilities u/s. 41 of the Act under the head business income as stated in para-3, AO had held that refund of processing charges(Rs. 4. 87 lakhs) and cessation of liabilities (Rs. 3. 15 lakhs) could not be allowed as no business was carried out by the assessee. During the appellate proceedings FAA held that refund of bank processing charges and sundry balances returned back could not be taxed under the head income from other sources, that both the amounts should be assessed under the head income from business. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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