Tribunal decision: business income allowed, interest income upheld as other sources. Revenue appeal dismissed.

The Tribunal partly allowed the assessee's appeal by directing the Assessing Officer to treat certain amounts as business income but upheld the treatment of interest income as income from other sources. The revenue's appeal was dismissed, with the Tribunal emphasizing that no separate addition could be made under S.40(a)(ia) once income is estimated, in line with relevant case law and rejecting the Revenue's arguments. The orders were issued on 18.10.2013.

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Issues:
Cross appeals for assessment year 2008-09 against Commissioner of Income-tax(Appeals) IV order dated 30.8.2011.

Assessee's Appeal:
1. Estimation of income @ 8% of the gross contract receipts:
The Assessing Officer estimated the income of the assessee at 8% of gross receipts, which the assessee contested. The learned Authorised Representative for the assessee withdrew the grounds challenging this estimation during the hearing.
2. Assessment of Rs.43,48,636 under 'other sources':
The Assessing Officer treated the amount disclosed by the assessee under 'business' as income from 'other sources'. The CIT(A) upheld this decision, stating the income had no nexus with the business. The assessee argued that the income from metal account and miscellaneous sources was integral to their business activities, citing relevant case law. The Tribunal directed the Assessing Officer to treat these amounts as business income but upheld the treatment of interest income as income from other sources.

Revenue's Appeal:
1. Disallowance under S.40(a)(ia):
The Assessing Officer disallowed Rs.14,42,980 under S.40(a)(ia), which the CIT(A) deleted. The Revenue contended that this disallowance was mandatory even when income is estimated, citing a Tribunal decision. The assessee argued that no separate disallowance can be made once income is estimated, referring to relevant case law. The Tribunal upheld the CIT(A)'s decision to delete the disallowance under S.40(a)(ia).

In conclusion, the assessee's appeal was partly allowed, while the revenue's appeal was dismissed. The Tribunal emphasized that no separate addition could be made under S.40(a)(ia) once income is estimated, following relevant case law and dismissing the Revenue's contentions. The orders were pronounced on 18.10.2013.

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