TaxTMI 
TaxTMI 
2015 (2) TMI 4
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....d in law as the assessment for earlier years on similar issues were completed after thorough scrutiny and accepting the stand of the appel lant and there have been no changes in facts requi r ing reconsideration and further as the reasons for reopening have not been communicated to the appellant so far". 3. It is seen that the assessee has taken a similar ground along with categorical mention in the S0F that the reasons had not been supplied to the assessee. 4. It is seen from the letters written to the AO, dated 14.04.2005 and 23.04.2005 (APB 66, 67 & 68) that the assessee had made specific requests for the supply of the reasons, which the revenue authorities failed to communicate. 5. This non supplying of the reasons for reopening has vitiated the entire reassessment proceedings at the threshold, as per the decision of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs CIT reported in 259 ITR 19 (SC). In such a case we set aside the order of the CIT(A) and restore the case to the file of the AO, with a direction that the AO shall supply the reasons to the assessee and on receipt of the objections, he shall first dispose off the objections of the assessee ....
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....by way of interest income was assessable as income from other sources. 5. The appellant submits that the learned Commissioner of Income tax (Appeals) erred in rejecting the contention of the appellant that since no interest under section 234B was leviable at the t ime when original assessment was completed, interest can not be levied while passing order under section 143(3) r.w.s. 147. 6. The appellant submits that the Assessing Officer be directed: a. to treat interest income as income under the head "Profits & gains of business or profession" and not under head "Income from other sources" b. to delete the disallowance made of a sum of Rs. 11,85,083/- out of total expenditure incurred; c. to assessee interest income as business income and to allow various expenses claimed in profit and loss account; d. without prejudice to what has been stated above, to al low various expenses incurred by the appellant even if the interest income was assessable as income from other sources; e. to delete the interest levied under section 234B f. to delete interest levied under section 234B ; and to modify the assessment in accordance with the provisions of the Act. 7. Each of the above gro....
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....inance business and the income received therefrom was treated as business income and was offered as such. The appellant further submitted that the same treatment has been accorded to such income in the past as well, wherein such income has been assessed as business income. The AO did not accept the submission made by the appellant on following grounds:- 1. The assessee company has its prime objective carry on the business of development of properties. 2. From the incorporation of the company, the assessee has never carried out its business activity of development of properties etc. 3. The assessee is not an investment company and also not an NBFC. 4. The assessee has advanced Rs. 66,04,000/- to Shri Maneklal Bhandari on interest. 5. From the A.Y. 1997-98 to till date the loan has advanced to one single party. Also, interest receivable has not been received fully in every year. and interest receivable is Rs. 69, 18,921 /-. 6. the only income earned is interest income. 7. There is no business activity carried out by the assessee. 8. The interest was required to be treated as income from oilier sources in view of the decision of various courts including the decision in the cas....
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....terial on record and orders of the revenue authorities. 19. The factum of the assessee applying to the RBI for getting into housing finance and the RBI allowing the assessee for the same has not been disputed. The factum of the assessee to get into housing finance business by passing the required resolution by the Board of Directors is also not disputed. The only reason and basis taken by the revenue authorities is that the assessee is in the business of housing development and since it is not a NBFC, the interest received has to be treated u/s 56 & not under business. 20. We cannot accept the reasoning of the revenue authorities wherein they have simply ignored the documents produced before them because the requisite documents were produced before the revenue authorities. We are of the opinion that interest received from Maneklal Bhandari at Rs. 8,99,120/- is to be treated as business income. However, interest on Income tax refund at Rs. 44,241/- is to be treated as income from other sources. 21. We, therefore, set aside the order of the CIT(A) on this issue and direct the AO to treat the receipt of interest income from Mr. Maneklal Bhandari as business income (Rs. 8,99,120/- )....