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TMI Blog2015 (8) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... the undisputed facts of the case, i.e., of the interest income in the undisputed facts of the case arising out of bank FDRs and ICDs. In fact, the A.O.’s finding that the same has no nexus with the assessee’s business, remains unchallenged. Rather, the assessee’s plea in the appellate proceedings was for the netting of the interest income in-as-much as the assessee had also paid interest. While the interest income stands specifically assessed as income from other sources for A.Y. 1997-98, there is no head-wise classification of the income for A.Y. 1998-99, which though cannot be read to imply or mean that the said income stands assessed as business income, particularly considering the clear finding/s in the matter and the undisputed facts of the case. For A.Y. 1999-2000, again, there is a clear reference by the A.O. to the reasons mentioned by him in the assessment order for A.Y. 1998-99, the immediately preceding year. In fact, the A.O., and only rightly, has gone further to state that the interest income could not be regarded as derived from the assessee’s business That is to say, that the interest income does not form part of the assessee’s business, the same could not in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flects a conflict in the judicial view at the relevant times, precluding penalty. Can the assessee under such circumstances be said to have concealed, or furnished inaccurate, particulars of income, so as to attract the provision of penalty u/s. 271(1)(c)? The Revenue s case 4.2 The Revenue s case, on the other hand, is that there is no basis for the assessee being allowed the benefit of sec.10-B on its interest income. The said income, as clearly brought out by the Assessing Officer (A.O.) in the assessment order for A.Y. 1997-98, the first of the three years under reference, has nothing to do with the assessee s business activity, assessing the same as income from other sources. Likewise for A.Y. 1998-99, where the A.O. has again given a categorical finding that the interest income has no nexus with the assessee s business activity. In the case of Paramount Premises (P.) Ltd. (supra), which was subsequently followed by the Hon'ble jurisdictional High Court in the Nagpur Engineering Co. Ltd. (supra), the issue was of whether the interest income is assessable as income from business or from other sources. The Hon ble Court found that the tribunal had given a defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his orders for A.Ys. 1997-98 and 1998-99, some of which we enlist as under: 1) Orissa State Warehousing Corp. vs. CIT [1999] 237 ITR 589 (SC); 2) Cambay Electric Supply Indl. Co. Ltd. vs. CIT [1978] 113 ITR 84 (SC). 3) CIT vs. Raja Bahadur Kamakhya Narayan Singh [1948] 16 ITR 325 (PC); 4) CIT vs. K K Doshi Co. [2000] 245 ITR 849 (Bom); 5) CIT vs. S. G. Jhaveri Consultancy Ltd. [2000] 245 ITR 854 (Bom) 6) South India Shipping Corporation vs. CIT [1999] 240 ITR 24 (Mad); 7) Fenner (India) Ltd. vs. CIT [1999] 239 ITR 480 (Mad); 8) North East Gases (Pvt.) Ltd. vs. CIT [1996] 220 ITR 372 (Gau); 9) CIT vs. Cement Distributors Ltd. [1994] 208 ITR 355 (Del); and 10) Hindustan Lever Ltd. vs. CIT [1980] 121 ITR 951 (Bom). This finding by the A.O. has not been disturbed; rather, not even contested by the assessee at any stage. The ld. Authorized Representative (AR), on this being pointed out during hearing, i.e., that the interest income stands specifically assessed u/s.56, i.e., as income from other sources, for A.Y. 1997-98, would submit that it stands assessed as business income for the subsequent two years. Further, the tribunal v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be business income would be clearly incorrect in view of his clear finding of it being not connected with the assessee s business activity but only by way of interest on surplus funds, i.e., for the time being. There is nothing on record to suggest otherwise, i.e., of the interest bearing deposits as occassioned by the assessee s business requirements, of a clear nexus with business, much less an intimate relationship, denoting one of first degree, as contemplated by law, which thus is with the said deposits. 5.4 As regards the reference to the decision by the tribunal for A.Y. 2000-01, the ld. AR omitted to refer to the last part of the relevant para (para 16 of the tribunal s order/at PB pg. 101R), which clarifies the reason for the tribunal for so considering, i.e., in view of the interest income being admitted to be a part of the assessee s business income. There is clearly no such admission in the facts and circumstances of the case, with in fact the A.O. having found it to be a fit case for the levy of penalty, initiating and subsequently levying penalty on the claim for deduction u/s. 10B on the interest income, so that the same can only be regarded as contested. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual findings by the tribunal, the final fact finding authority. The said decisions, thus, on the contrary, support the Revenues case . The finding by the tribunal in the instant case, as apparent, is of it being a fit case for the impugned claim being disallowed in view of the decision in L iberty India (supra), so that there was no relation of first degree between the assessee s business, which it found as qualifying for deduction u/s.10B, and the interest bearing deposit/s. The decision in the case of L iberty India (supra), it needs to be appreciated, is only in line and tandem with the earlier decisions, cited supra, by the hon ble apex court, which listing is again not exhaustive, so that the apex court does not thereby lay down any new law. Rather, the decisions by the hon'ble jurisdictional high court relied upon by the assessee are not inconsistent with the decision in L iberty India (supra) and, in fact, in consonance with the decision by the Hon ble Apex Court in Govinda Choudhary and Sons (supra). Further, the assessee also has nowhere contested any of the several decisions relied upon by the Revenue, including by the hon ble apex court and the jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands upheld on this expenditure as the claim for deduction u/s.80-B was found as not bona fide . The same was not pressed before us by the ld. AR, so that the same is dismissed as not pressed. This decides the assessee s appeals for all the years. Revenue s Appeals 7. The Revenue appeals relate to the receipts on which deduction u/s.10B has since been allowed by the tribunal, as to UNISYS, vide its combined order for the years under reference dated 02.03.2012 (PB pgs. 1-43), i.e., after recalling its earlier order dated 07.04.2005 disallowing the same (PB pgs. 44-101). The only plea adopted by the Revenue is that it having contested the said deletion, i.e., in the quantum proceedings, before the Hon'ble jurisdictional High Court, which has since admitted the appeals, the matter may be kept in abeyance till the disposal thereof by the Hon ble Court. Reliance is placed on the decision in CIT vs. Popular Jewellers [1999] 238 ITR 676 (Del). We find the plea misplaced. The issue cannot be kept undecided only for the reason that the same is in appeal before a higher appellate forum. However, in-as-much as we are dismissing the Revenue s appeals at the threshold, i.e., ..... 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