AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 339
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...., while admitting the appeal, framed the following substantial questions of law for consideration :- 1) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in not deciding the issue on merits in respect of the interest income by remitting back the issue to the file of the Assessing Officer? 2) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in remitting back the issue of interest income to the Assessing Officer by basing its decision on wrong presumption and premises, without considering the categorical findings of the Commissioner of Income Tax (Appeals), which was based on materials, reasoning and supportive case law o....
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....as income from the other sources and why the benefit u/s 80HHC should not be disallowed on the interest income as interest income is not derived from export business. The authorised representative of the assessee stated that money lending is one of the business activity of the firm. The firm received interest from various banks on the deposits and also interest from various parties. Therefore he stated that this should be treated as business income. The explanation of the authorised representative is considered. Here the question whether the interest income received by the assessee is profit from the export business or not for the purpose of 80HHC. The explanation of the authorised representative is not acceptable in view of the following d....
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....ived by such a person is business income. The same assessee can have income which may require to be classified under more than one head. It is the manner in which the income is derived that is relevant and not merely the fact that the person is engaged in a business or in a profession. Interest received by the company which carries on business, from bank deposits and loans could only be taxable as 'Income from other sources' and not as 'business income'." 4. To arrive at a substantive finding, the Assessing Officer primarily placed reliance on the decision reported in CIT Vs Pandian Chemicals Ltd. (233 ITR 497) and the decision of the Kerala High Court in Nanji Topanbhai & Co. - Vs Asst. Commissioner of I....
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....n of stock in trade in any manner, if results in any income will be "Business Income". This view is supported by the decision of the Supreme Court in the case of C.E.P.T. - Vs - Lakshmi Silk Mills Ltd. (20 ITR 451). During the course of the appellate proceedings, the assessing officer has brought to my notice that during the year under consideration, the appellant has advanced the money only to two depositors and therefore it cannot be said that the appellant is carrying on the business of money lending. It is a well known fact that turnover of business cannot be a whole criteria in deciding the issue. for the last several years the appellant is advancing the money to several persons and the department has also accepted that the appellant&#....
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....an be business income. 9. However, in our opinion, this has to be ascertained from the facts and records of the case. Hence, in the interest of justice, we remit this issue to the files of the Assessing Officer to give a finding on the facts of the case as to whether the interest income of the assessee can be considered to be his business income. If that be so, 90% of the interest will have to be reduced for computation of deduction u/s 80HHC in accordance with the provisions of Explanation (baa) to Section 80HHC. The assessee should be given adequate opportunity or being heard. Aggrieved by the order of the Tribunal, the assessee/appellant is before this Court by filing the present appeal. 7. Learned counsel for the appellant/assessee v....
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....d aspect by the authorities below is liable to be interfered with. 8. Heard Mr.Philip George, learned counsel appearing for the appellant/assessee and Mr.T.R.Senthil Kumar, learned counsel appearing for the respondent/Department and perused the materials available on record as also the decisions relied on by the learned counsel for the appellant/assessee. 9. A cursory glance at the order of assessment as also the order of the CIT (Appeals) reveals that the Assessing Officer has taken a view that the interest earned from money lending business is 'income from other sources', whereas the CIT (Appeals) has taken it under the head 'Business Income'. Both the authorities, as is evident from their orders, have given their findin....