2014 (7) TMI 211

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..... M.: This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-29, Mumbai ('CIT(A)' for short) dated 14.12.2012, partly allowing the assessee's appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year (A.Y.) 2008-09 vide order dated 30.12.2010. 2. The brief facts of the case are tha....

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....the time being) are deposited in bank, yielding interest, bringing down the overall interest burden. In fact, deposit/s in bank was also made to secure the funding facility from the bank. This was thus a business decision and, accordingly, the interest income ought to be considered as a business income. The ld. CIT(A) found the assessee's claim acceptable. However, the same was valid only for the ....

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....mpact the quantum of remuneration allowable to the partners. This is as the same is, though capped as per the formula prescribed u/s.40(b)(v), deductible only u/s.37(1) (refer: Munjal Sales Corporation vs. CIT [2008] 298 ITR 298 (SC)), which could only be against business income. That is, it is inconceivable that an expenditure could be allowed u/s.37(1) in computing an income assessable u/s.56, o....

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....o meet some defined business purpose, while the interest income is only incidental. No doubt, the same would require being demonstrated, but the fact of the matter remains that to conclude that the interest income, which acquires its character from the surrounding circumstances (refer: CIT vs. Govinda Choudhury & Sons [1995] 203 ITR 881 (SC); Bharat Commerce and Industries Ltd vs. CIT [1998] 230 I....