TaxTMI 
TaxTMI 
2013 (12) TMI 20
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....assessment rather than setting aside the order passed by the Ld.A.O. U/s.143(3) of the Act and giving direction to reframe assessment. [3] That the Ld.Commissioner of Income-tax, Ahmedabad-II, Ahmedabad while setting aside the assessment, order U/s.143(3) of the Act. did not appreciate the contention of the appellant that there was no error of the Ld.A.O. considering interest income as business income which was determined after proper scrutiny, calling and verifying complete details and analyzing the same and he has not brought on record what was the error committed by the Ld.A.O. requiring action U/s.263 of the Act. [4] The appellant contends that the view taken and the opinion expressed by the Ld.Commissioner of Income-tax, Ahmedabad-II, Ahmedabad that the order passed was erroneous and requires reconsideration, is against principle of law, natural justice and is change of opinion which does not justifying an action U/s.263 of the Act. [5] The appellant contends that the action of Ld. Commissioner of Income-tax Ahmedabad-II, Ahmedabad not being empowered U/s.263 of the Act, the order giving direction for reframing assessment requires to be cancelled. [6] It is also no....
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....d not be treated as current depreciation as assessee had unexhausted business losses. Hence, set off of the business loss/unabsorbed depreciation against income under the head 'income from Others Sources' was irregular. Underassessment of Income. 4. Considering the facts and circumstances as mentioned above, it appears that the order dated 15/11/2010 passed by the ITO, Ward-4(4), Ahmedabad is erroneous in so far as it is prejudicial to the interest of Revenue." 3.1. In response to the notice, the assessee filed a written submission dated 31/10/2012. The CIT after considering the written submission, passed an order u/s.263 of the Act thereby the order passed by the Assessing Officer u/s.143(3) of the Act dated 15/11/2010 was set aside and the AO was directed to reframe the assessment after conducting necessary inquiry and after granting sufficient opportunity of hearing to the assessee. 4. The ld.Sr.Counsel for the assessee Shri S.N.Soparkar submitted that the impugned order has been passed on the basis that there was failure on the part of the AO to make enquiries and accepting the claim of the assessee. He submitted that this finding of the ld.CIT is contrary to the recor....
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....bmission is that the assessee-company is also engaged in business of advancing and lending money, earning interest income which is part of business income and in the past the same was never assessed as 'income from other sources'. In support of his contention, reliance is placed on the decision of Hon'ble Apex Court rendered in the case of CIT vs. M/s.Excel Industries Ltd.(supra). It is also submitted in the written submission that the decision of Hon'ble Coordinate Bench rendered in the case of Ratnesh Metal Industries Pvt.Ltd. vs. CIT in ITA No.529 & 530/Ahd/2012 for AYs 2007-08 & 2008-09, dated 15/03/2013, in fact, supports the case of the assessee as in the present case there is a specific enquiry by the AO and a specific reply has been made vide letter dated 05/08/2010. Reliance is also placed on the decision of Hon'ble High Court of Delhi rendered in the case of ITO vs. D.G. Housing Projects Ltd.(supra). 6. We have given our thoughtful consideration to the rival contentions. In the light of the facts of the present case and the submissions made by the representatives of the parties, it is evident that notice u/s.263 of the Act was issued, wherein it was pointed out by the ....
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....axed as "income from other sources". The assessee-company is an on going concern and continuously carrying on business since 1945 and is not a new company. The interest income has been business income of the assessee-company. Therefore, interest income is a business income and is liable to be taxed and has been correctly taxed u/s.28 of the IT Act as business income. Therefore, presumption that interest income is to be taxed as income from "other sources" is nothing else but clearly a change of opinion without any specific provisions of the Act. It was also submitted that unabsorbed depreciation carried over from the earlier years would certainly be depreciation of the current year according to the binding precedent of Hon'ble Supreme Court and Hon'ble Gujarat High Court. In the case of CIT vs. Jaipuria China Clay Mines (P) Ltd. (1966) 59 ITR 555 Hon'ble Supreme Court expressed the view that the words "profits and gains chargeable for that year" are not confined to profits and gains derived from the business whose income is being computed and held that unabsorbed depreciation of past year had to be added to depreciation of the current year and the aggregate unabsorbed and current y....
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.... legal ingenuity is exhausted. It is a principle of law that this cannot be permitted and there is abundant authority reiterating that principle. Thirdly, the same principle, namely, that of setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed. In that case also a defendant is bound by the judgement, although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken." 6.2. In the present case, the Revenue has been accepting the claim of the assessee, the income earned by way of interest income as a business income. It is not stated by the ld.CIT as to how the stand taken by the Revenue for earlier years was not correct and the AO taking a consistent view and order so passed was erroneous. We find that ld.CIT has not exercised his jurisdiction u/s.263 of the Act in accordance with the settled principle of law. Ld.CIT has failed to consider the submissions of the assessee on both the aspects and has merely based its order on the basis that the AO has not made any enquiry. However, it is transp....