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TMI Blog2010 (7) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... ,800/- credited as labour income which was treated by the Assessing Officer as deemed income of the assessee earned from undisclosed sources? [B] Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law and in facts in reversing the order of the CIT(A) and thereby directing to allow interest expenditure of ₹ 2,11,99,383/- claimed as business expenditure though the assessee failed to establish that the funds borrowed and interest expenditure incurred was for earning taxable income of the year? [C] Whether on the facts and in the circumstances of the case and in law, whether the Appellate Tribunal erred in not following the jurisdictional High Court's decision in the case of Fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciated the evidence on record. Referring to the impugned order of the Tribunal, it was submitted that the Tribunal has referred to the old records of the assessee to note that the assessee was carrying out business of stone crushing and stone and that he was having machinery for crushing, and has accordingly assumed that the assessee had utilised his business assets and as such his income for allowing use of his crushing machinery should be assessed under the head 'business income' and not as unexplained amount credited. It was urged that the Tribunal has failed to appreciate the fact that each assessment year is an independent assessment year and that facts of each assessment year are required to be examined and appreciated inde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was argued that Tribunal has placed reliance upon the decision in case of Shailesh Doshi stating that the same is a comparable case, whereas the facts in the case of Shailesh Doshi are totally different and have nothing to do with the controversy in issue and as such the impugned order of the Tribunal stands vitiated on account of non-application of mind. It was accordingly submitted that the impugned order of the Tribunal does give rise to a question of law as proposed or as may be formulated by the Court. 5. As can be seen from the impugned order of the Tribunal, before the Tribunal it was contended on behalf of the assessee that the assessee was in the business of stone crushing since over 30 years. In support of the said contention, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and there was exploitation of a commercial asset, the decision of this High Court in the case of CIT vs. Fakir Mohmad Haji Hasan, 247 ITR 290 would not be applicable. 6. The Tribunal after appreciation of the evidence on record found that the issue involved in the present case was as to whether the income of the assessee was to be treated as business income or income from undisclosed sources. The Tribunal found as a matter of fact that the assessee was exploiting his land and machinery for putting it to use to make chips from boulders. The Tribunal was of the view that since the assessee was doing job work, it could not be said that there was no commercial exploitation of the asset. The Tribunal further noted that the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee an opportunity to explain the source of the said amount, found that the source and genuineness of the amount of ₹ 2,15,80,800/- credited as labour receipt in 1436 different names in the books of accounts of the assessee was not established by the assessee as genuine labour receipt and accordingly held the said amount to be income from undisclosed sources and added the same to the taxable income of the assessee as deemed income of the assessee under section 68 of the Act. Section 68 of the Act which makes provision for cash credits provides that where any sum is found credited in the books of assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seen from the impugned order of the Tribunal, the Tribunal has recorded that the Assessing Officer and Commissioner (Appeals) had mainly disallowed the interest on the ground that the income of the assessee was to be taxed as income from undisclosed sources and not as business income. The Tribunal having already held that the income of the assessee was to be taxed as business income and not as income from undisclosed sources, deleted the addition in relation to interest expenditure. However, before the Tribunal, the Assessing Officer had pointed out that interest amounting to ₹ 42,87,359/- had not been paid to the Rajkot Nagrik Sahakari Bank and as such was not allowable under section 43B of the Act. The Tribunal, therefore, confirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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