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TMI Blog2024 (8) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... n securities out of surplus fund falls under the head income from other sources is totally misplaced having regard to the fact that money lending and income from investment are the core business activities of the assessee company. It is thus far fetched to characterize the income derived from main business activity as Income From Other Sources . No error in the process of reasoning adopted by the CIT(A) and thus, decline to interfere therewith - Decided against revenue. - Pradip Kumar Kedia, Accountant Member And Shri Sudhir Pareek, Judicial Member For the Assessee : Shri Manish Jain, C.A. For the Revenue : Shri Amit Katoch, Sr. D.R. ORDER PER PRADIP KUMAR KEDIA, AM : The captioned appeal has been filed by the Revenue against the first ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d interest income of Rs. 5,66,35,173/- as income from other sources instead of Income from Business as declared by the appellant in his return. In this connection, in Para 5.1 and 5.2 of the Assessment Order, the Ld. Assessing Officer has contended that the assessee has not carried out any business activity and not held any amount as stock in trade and not carried on any purchases and sales as shown in ITR, further the AO held that the interest earned from investment in securities out of its surplus funds falls under Income from other sources Therefore, the assessee is not eligible for claiming business expenses 4.2 In this regard, the appellant company has contended that every company is required to prepare its balance sheet as per the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NBFC has to be treated as income from business or profession: a) The Hon'ble ITAT Delhi in the case of Utkal Investments Ltd ITA No 2558/Del./2011; ITA No 2894/Del./2011; ITA No 2662/Del./2012 wherein it was held The assessee is a registered Non Banking Financial Company in which public is substantially interested. The assessee company carries out the activities of investment in shares. securities, units of mutual funds and advancing loans. The assessee was dealing in shares and securities and also carrying on business of generation and distribution of electricity In the ground no.2 of the cross objection filed by the assessee, the issue is that the Id. CIT (A) has erred in holding that interest earned by the assessee company is income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 wherein it was held as under: 5....In our opinion, whether the assessee company is registered as a housing finance company or not is irrelevant for determining whether the assessee is carrying on the business of financing or not. If the assessee is carrying on the business of finance, despite not being registered, as a housing finance company, its income is to be assessed under the head Income from business . It is not disputed by the Revenue that the assessee was actually carrying on the business of financing, despite refusal of registration by the NHB. Once the business of finance was carried out by the assessee, it has to be assessed under the head Income from business . Para 8.6..... In view of above, we are of the view that the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee is not carrying out the business activity. The registration with RBI as NBFC and business activity of the assessee, both are different aspects and cannot be applied for holding that the assessee is not engaged in the business activity. However, in the instant case there is no dispute that the appellant company is a NBFC and registered with RBI as well therefore the income will certainly be assessed as business income as is the sprit and intention of the ratio of the judgement. Further, the Hon'ble ITAT Delhi in the case of M/s Vashulinga Finance Pvt. Ltd in the case held interest from Fixed deposit as business income of the assessee as it is an NBFC. Since, in the instant case, the appellant company is a NBFC and doing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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