9911796707
TMI Blog2016 (4) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... facts are identical - HELD THAT:- The relief was denied to the assessee on the plea (para 5.5 of the impugned order) that the assessee could not produce the evidence with respect to these liabilities whether crystallize during the year. However, the assessee drew our attention with respect to rejections/refunds and we found the explanation of the assessee to be correct.Considering the facts and the explanation of the assessee, this ground is allowed. The appeal of the assessee, is, therefore, allowed. Interest income - treated as short term deposits as business income OR income from other sources - HELD THAT:- Deposits are kept in Current Accounts or in short term deposits for their immediate use for business purposes. On these facts it is to be held that the funds are being used in the business and the incidental business income on the short term deposits abroad are to be considered as business receipts only. This view is also supported by the action of the CBOT in taking up the assessee's case before the inland revenue authorities of UK when the same was being taxed as Income from Other Sources not covered by the OTAA between UK and India. These facts are established i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fered as taxable as income from other sources as the same was received from foreign investment. The balance amount of ₹ 50 lakhs was received from Cochin International Airport Ltd. (in short CIAL) and was claimed as exempt u/s 10(34) of the Act on the ground that CIAL is an Indian company in which Air India holds equity shares. The ld. Assessing Officer asked the assessee as to why the expenses should not be disallowed by applying rule-8D of the Income Tax Rules. The assessee vide communication dated 30/12/2009 read as under:- The investment made in the shares of CIAL is out of the funds owned by the company and not from the borrowed funds. Therefore, no expenditure has been incurred in making the investment in the shares of CIAL. Thus, no expenditure should be disallowed. 2.2. The ld. Assessing Officer disallowed the claim of the assessee on the plea that the assessee did not produce any evidence that the investment was made out of own funds. He made a disallowance of ₹ 31,39,880/- u/s 14A of the Act. On appeal before the Commissioner of Income Tax (Appeal), in the stand taken in the assessment order was affirmed against which the assessee is in further appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07 19.5 8 Salaries/Staff Welfare Expense 2006-07 48.5 9 Communication Charges-other 2006-07 0.1 10 Interest on Investment 2006-07 1.5 11 Exchange Variation 2006-07 55.5 Total 337.1 3.4. The aforesaid figures even has been mentioned in para 5.3 of the impugned order. The relief was denied to the assessee on the plea (para 5.5 of the impugned order) that the assessee could not produce the evidence with respect to these liabilities whether crystallize during the year. However, the assessee drew our attention to page 24 of the paper book with respect to rejections/refunds and we found the explanation of the assessee to be correct. Considering the facts and the explanation of the assessee, this ground is allowed. The appeal of the assessee, is, therefore, allowed. 4. Now, we shall take up the appeal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rve Bank of India. It is also a fact that these deposits are kept in Current Accounts or in short term deposits for their immediate use for business purposes. On these facts it is to be held that the funds are being used in the business and the incidental business income on the short term deposits abroad are to be considered as business receipts only. This view is also supported by the action of the CBOT in taking up the assessee's case before the inland revenue authorities of UK when the same was being taxed as Income from Other Sources not covered by the OTAA between UK and India. These facts are established in the order for the assessment year 1993-94 of the learned CIT(A) and as submitted by the assessee, the matter was not challenged and accepted upto Assessment Year 1996-97. For these reasons, we are of the opinion that the interest earned on short terms deposits is to be considered income from business . Consequently, the Assessing Officer is directed to treat the interest income as income from business. The assessee s grounds are allowed on this issue. We find that the Department has neither brought on record any contrary facts/decision, therefore, on the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X
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