Tribunal allows appeals for assessment years 2006-09, condones appeal delay, deems interest income as business income

Total Commodities (I) Pvt Ltd Versus ITO WD 9 (3) 3, ACIT Cir 6 (3), Mumbai.

Total Commodities (I) Pvt Ltd Versus ITO WD 9 (3) 3, ACIT Cir 6 (3), Mumbai. - TMI Issues involved:
1. Condonation of delay in filing the appeal.
2. Computation of interest income under the head 'income from other sources' instead of 'profits and gains of business'.
3. Appeal for assessment years 2006-07, 2007-08, and 2008-09.

Issue 1: Condonation of delay
The appellant filed three appeals against the Commissioner of Income Tax (Appeals) for A.Y. 2006-07, 2007-08, and 2008-09. There was a delay of 113 days in filing the appeal. The appellant submitted reasons beyond their control for the delay, supported by an affidavit from the director of the Assessee company. The Revenue contested the application for condonation of delay. The Tribunal, after hearing both parties, found the reasons mentioned by the assessee constituted 'sufficient cause' for the delay. Citing a Supreme Court judgment, the Tribunal condoned the delay and admitted the appeal for decision on merits.

Issue 2: Computation of interest income
The appellant contested the computation of interest income under 'income from other sources' instead of 'profits and gains of business' for A.Y. 2006-07. The appellant claimed the interest earned on fixed deposits was part of business income as it was related to bank guarantees for business purposes. The Revenue argued that the interest was incidental to the business but not derived from it. The Tribunal analyzed the facts, previous judgments, and the order of the Ld. CIT(A). Referring to various judgments, including one by the Hon'ble ITAT Mumbai Bench, the Tribunal concluded that interest earned from funds kept for business purposes should be taxed under 'business income.' The Tribunal directed the AO to treat the interest income under 'profit and gains of the business,' allowing this ground of appeal.

Issue 3: Appeals for A.Y. 2007-08 and 2008-09
The Tribunal decided the appeals for A.Y. 2007-08 and 2008-09 based on its decision in the appellant's own case for A.Y. 2006-07. Following the earlier order on identical issues, the Tribunal allowed the grounds of appeal in these two appeals as well. Consequently, all appeals filed by the assessee were allowed.