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TMI Blog2017 (7) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of ₹ 1,50,000/has also to be considered to be part of income from business arrived at in accordance with the Chapter IVD of the Act. It is not open to the Revenue to contend that the amount of ₹ 1,50,000/is part of business income while computing the tax payable but not so for the purposes of Section 40(b) of the Act. The character of the income does not change dependent upon the section to be applied. This issue has not been examined at all by the authorities under the Act. It goes to the root of the dispute. - Decided in favour of appellant/assessee and against the Revenue. - Income Tax Appeal No. 80 of 2003 - - - Dated:- 12-6-2017 - M. S. Sanklecha And Manish Pitale, JJ. Mr. N.S.Bhattad, Advocate for the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of ₹ 1,50,000/was taken into account by crediting it to the profit and loss account under the head 'other income'. However, to work out the salary paid to the partner in terms of section 40(b) of the Act, the appellant had taken into account the same in computing book profits. The Assessing Officer held that the other income shown by the appellant could not be considered to be business income of the firm, this other income of ₹ 1,50,000/was added in the profit and loss account to the gross profit and included for the purposes of Section 40(b) of the Act while determining the book profit. However, otherwise the amount of ₹ 1,50,000/was included as a part of business income to compute the tax payable in the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the tax payable, the Assessing Officer ought to have classified the amount of ₹ 1,50,000/as income from other sources and not accepted it as total income as returned business income. This aspect has been completely overlooked by the Tribunal in its impugned order. Therefore, it is submitted that the character of the income does not undergo change depending upon the section of the Act applied. 8. Mr. Bhushan Mohta, learned counsel for the Revenue, states that the error in not separately classifying the other income as income from other sources, would not be fatal to the case of the Revenue. This is particularly so when reasoning given in the order of Assessing Officer as confirmed by the CIT(A) as well as of the Tribunal is consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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