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TMI Blog2015 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... to be treated as business income. However, interest on Income tax refund at ₹ 44,241/- is to be treated as income from other sources. We, therefore, set aside the order of the CIT(A) on this issue and direct the AO to treat the receipt of interest income from Mr. Maneklal Bhandari as business income (Rs. 8,99,120/- ). - Decided partly in favour of assessee. Disallowance of expenses - AO disallowed the expenses because there was no business of the business with regard to housing development - Held that:- It is a fact that there was a slowness in the business of the assessee but the assessee, as we have observed in the previous GOA, had diversified its business to housing finance and was maintaining its business premises and business modus. This clearly shows that the assessee was carrying on the business and the expenses being incurred were business expenses. It is also a fact that there is no claim of the revenue authorities to hold the expenses to be non genuine. In such a circumstances, we are inclined to accept the arguments and GOA of the assessee to allow the expense, as disallowed. - Decided in favour of assessee. - ITA No. 4305/Mum/2006 ITA No. 4306/Mum/2006 ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see and on receipt of the objections, he shall first dispose off the objections of the assessee and then proceed to frame the assessment. 6. Since we have set aside the orders of the revenue authorities on legal grounds, to the file of the AO, we do not find any reason to adjudicate on merits. Hence, GOA on merits have therefore, become infructuous. 7. Appeals of assessment years 1998-99 to 2001-02 are thus allowed for statistical reasons/purposes. ITA No. 3252/Mum/2009: Asst. Year 2002-03: 8. The following grounds have been taken: 1. The learned Commissioner of Income tax (Appeals) erred in law in upholding the action of the learned Income tax Off icer (herein af ter referred to as Assessing officer ) in reopening the assessment under section 148. The appellant submits that the order passed under section 143(3) r. w. s. 147 is illegal, null and void and bad in law as the assessment for earlier years on similar issues were completed after thorough scrutiny and accepting the stand of the appel lant and there have been no changes in facts requi r ing reconsideration and further as the reasons for reopening have not been communicated to the appellant so far. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest levied under section 234B ; and to modify the assessment in accordance with the provisions of the Act. 7. Each of the above grounds of appeal are independent and without prejudice to each other. 8 The appellant craves liberty to add, to alter and/or amend the grounds of appeal as and when given . 9. Ground no. 1 pertains to issue and initiation of proceedings u/s 148. The assessee has taken in casual manner that assessments in earlier years was framed in scrutiny assessment and since there is no change in the facts and circumstances, the issue of notice is germane on those proceedings and therefore, it amounts to change of opinion, and therefore, initiation of reassessment proceedings are bad in law. 10. We have gone through the GOA and have perused the orders. We find that GOA is repetitive and cut paste, because the assessments in preceding years have been framed against the assessee, which we have set aside. Since the facts in the current year are different, the similar conclusion cannot be drawn and therefore, we sustain the proceedings u/s 148. Hence, ground no. 1 is rejected. 11. Ground no. 2 pertains to disallowance and claim of the assessee to treat i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity carried out by the assessee. 8. The interest was required to be treated as income from oilier sources in view of the decision of various courts including the decision in the case of South India Shipping Corporation Ltd vs CIT (240 ITR 2), and not as business income. 9. On application of the principle of Res-Judicata every assessment is a separate assessment and the assessee s contention that in A.Y. 1995-96 and 1996-97 the interest income is treated as business income cannot be accepted. Hence in view of the above facts and the decision of South India Shipping Corporation Ltd vs CIT (240 I]'R 24), and various other decisions on the subject, it is clear that interest income in this case was not assessable as business income but was required to be assessed as income from other sources . 13. The CIT(A), after considering the submissions, observed, 5 I have gone through the facts of the case, submission made and also the assessment order. I have noted that the appellant's prime objective as p e r Memorandum and Articles of Association is to carry on business of development of properties. However, from the incorporation of the company, the appellant never c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as income from other sources. 21. We, therefore, set aside the order of the CIT(A) on this issue and direct the AO to treat the receipt of interest income from Mr. Maneklal Bhandari as business income (Rs. 8,99,120/- ). 22. Ground no. 2 is therefore, partly allowed. 23. Ground no. 3 pertains to disallowance of expenses of ₹ 11,85, 083/-. 24. The revenue authorities disallowed the expenses because there was no business of the business with regard to housing development. 25. Before the revenue authorities the assessee produced audited accounts, books of accounts and details filed with ROC to show that the movement of business was slow as there was lull in the market. However business as such was going on and the expenses were claimed as genuine business expenses. 26. The revenue authorities disregarded the claim of the assessee. 27. Against this, the assessee is now before the ITAT. 28. Before us, the AR reiterated the submissions that lull in the business does not amount to close of business and therefore, the claim of business expenses was genuine. 29. The DR on the other hand relied heavily on the orders of the revenue authorities. 30. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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