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TMI Blog2015 (9) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, the same amount may be taxed in the hands of the assessee as its income in accordance with law. We further direct the Assessing Officer that if the assessee has incurred any expenditure relating to earning the interest income, the same may be allowed as business expenditure, if the activity of the assessee is treated as business activity. Decided in favour of assessee for statistical purposes. - I.T.A.No.276/Mds/2014 - - - Dated:- 2-9-2015 - Shri Chandra Poojari, Accountant Member and Shri V. Durga Rao, Judicial Member For The Appellant : Shri R. Vijayaraghavan, Advocate For The Respondent : Shri A.V. Sreekanth, JCIT ORDER PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivities. The assessee has parked its funds amounting ₹.1,13,70,729/- in a Scheduled Bank (HDFC Bank) which is a current account. The Assessing Officer has further observed that the activity of the assessee of collecting contributions and transferring a part of it to TVS Shriram Growth Fund predicates a profit motive that pervades the whole series of transactions carried out by the assessee during the accounting year. 3. Further, the Assessing Officer has noted that the assessee is an asset management company and has roped in TVS Shriram Growth Fund as an investment manager. The assessee manages the assets of the contributors and by diverting the contributions to the investment manager, the assessee cannot be said to have disowned t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deed and is registered under the Indian Registration Act 1908. Its beneficiaries are known and shares of each individual beneficiary are determinate. The main purpose in forming a contributed trust is to mobilize capital from various individuals to carry on the Venture Capital Fund activities and accordingly collected contributions from various persons and invested in the fixed deposits of various banks pending commencement of venture capital activities. The beneficiaries of the appellant, upon formation of TVS Shriram Growth Fund SEBI registered Venture Capital Fund have opted to terminate their investment with the appellant. All the investors opted to transfer all the capital commitments together with income and expenditure to TVS Shriram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund by the appellant was brought to tax as income of the appellant. The appellant further submitted that the said income was already offered in the return of income filed by TVS Shriram Growth Fund for the assessment year. However, the Assessing Officer treated the income shown in the TVS Shriram Growth Fund as the investment of the appellant. 5.2 The Assessing Officer has treated the activities of the appellant as business in the sense the appellant has collected the contribution in concerted and a systematic manner from all 656 contributors amounting to ₹ 40,35,34,375/- who are all High Network Individuals. Even retaining the an amount of ₹ 64.50.000/- from 17 contributors for its operational activities as on 31.03.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS certificates issued by the respective banks only in the name of the assessee and not in the name of Growth fund. Thus, the Assessing Officer has correctly worked and assessed the interest income derived by the assessee from banks in its hands only, hence the addition made at ₹ 1,38,83,203/- as business income of the assessee is hereby confirmed rejecting the appellant s arguments. 5. On being aggrieved, the assessee is in appeal before the Tribunal. 6. The ld. Counsel for the assessee has submitted that the amount received by the assessee in the form of interest is not the income of the assessee. It is the income of the beneficiaries and the same has been transferred to them. Alternatively, he has submitted that whateve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 78/- for its operational activities. The assessee has also parked its funds amounting ₹.1,13,70,729/- in HDFC Bank current account. The Assessing Officer, keeping in view of the above systematic activity of the assessee, concluded that the assessees activity is a business activity and the interest income received by the assessee of ₹.1,38,83,203/- was treated as business income. However, he has not allowed any expenditure. The ld. CIT(A) confirmed the order passed by the Assessing Officer. Before us, the main contention is that whatever the interest income received by the assessee has already been transferred to the beneficiaries. Therefore, it cannot be taxed in the hands of the assessee. The very same plea has been taken bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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