TaxTMI 
TaxTMI 
2013 (6) TMI 249
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....e head 'other sources'. 3. The brief facts of the case are that the assessee declared net profit of Rs. 1,28,49,685/- which included other income of Rs. 38,01,867/- and the said other income consists of the following: (i) Recoveries from candidates who did not stick upto the agreement (a) Security deposits (b) Bank guarantee invoked Rs. 1,00,000/- Rs. 27,20,000/- (ii) Administrative fees collected from candidates Rs. 15,000/- (iii) Interest income from bank fixed deposit Rs. 7,69,990/- (iv) Excess received from overseas client Rs. 1,90,363/- (v) Others Rs. 6,514/- The Assessing Officer held that the other income of Rs. 38,01,867/- has no nexus with the business ....
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....shed bank guarantee forms major part of the aforesaid 'other income'. He observed that the other constituents of this income are also similar viz. forfeiture of security deposit and the reimbursement received from overseas company. The CIT(A) held that the nature of income was contingent on happening or not happening of an event on which the assessee has no control. He, therefore, held that the Assessing Officer has rightly treated the income as income from other sources and dismissed the appeal of the assessee. 5. Before us, the A.R of the assessee reiterated the submissions made before the CIT(A) and submitted that the encashment of the bank guarantee and the receipt of the amount by the assessee was when the technical person sent abro....
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....come of Rs. 38,01,867/- is only attributable and there is no direct nexus with the business of the assessee. 9. On appeal, the CIT(A) confirmed the action of the Assessing Officer on the ground that the above receipts of the assessee are contingent in nature as on happening of the event in pursuance to which the assessee becomes entitled for this receipt is not in the control of the assessee. 10. Before us, the A.R of the assessee contended that the assessee was also engaged in the business of running placement agency. During the course of this business the assessee earned income by way of administrative charges of Rs. 15,000/-, invocation of bank guarantee of Rs. 27,20,000/- and forfeiture of security deposit of Rs. 1,00,000/- and th....
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.... of the six different items comprised in the receipt of Rs. 38,01,867/-. Similarly, we find that the CIT(A) has also failed to appreciate the amount which is assessable under the head 'profits and gains of business or profession' in view of the provisions of section 28 of the Act. The CIT(A) has also not properly examined the nature of each of the six types of receipts in question and has not arrived at the conclusion that these receipts have no nexus with any business carried on by the assessee during the year consideration before holding that the same is not assessable under the head 'profits and gains of business or profession'. 15. Before us, the only issue in dispute is that whether the six receipts in question amounting to Rs. 38,0....