2016 (11) TMI 970

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....purchase, financing, factoring and leasing of automotive vehicles. Concededly, the assessee had applied for a license as a Non Banking Financial Company (NBFC) which it obtained on 09.04.2008. For AY 2008-09, its assessment declared an income of Rs. 2,84,56,074/-; later, the assessee filed a revised return, declaring loss of Rs. 2,68,67,610/-. In the computation of its total income, the Assessing Officer (AO) held that interest income received by the asssessee being to the tune of Rs. 2,84,56,074/- could not be treated as "business income" and that it was income from other services and that deduction from other sources as business income could not be allowed as revenue expenditure since the assessee had not set-up business during the period....

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....r discussed the following essential facts: "5.2 Now, adverting to the case of the appellant company, it is observed that the appellant company was incorporated in India on 23.4.2007 to carry on the business of hire purchase, financing, factoring and leasing in connection with the retail sale of all types of automobile vehicles and to carry on the business of establishing, organizing, managing, promoting, encouraging, conducting, sponsoring, operating, developing, commercializing and providing insurance brokerage services connection with all kinds of automotive vehicles. This company is a closely held company with 32,000,000 equity shares being held by Bussan Automotive Singapore Pte. Ltd, 13,000,000 equity shares being held by AXIS....

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....finance business. Various correspondences were made by the appellant company with the RBI authority to comply its condition for registration as NBFC. As per the RBI approval, the UTI Bank Ltd. invested 26% in the initial paid up share capital of the appellant. Further expenses were also incurred on the purchases of office equipments worth of Rs. 15,62,894/-, computers of Rs. 62,22,308, software of Rs. 1,79,80,247/-, furniture and fixtures of Rs. 3,54,836/- and vehicles of Rs. 26,97,892/-. Even the AO has not disputed the genuineness of these expenditures" 4. The CIT(A) also noted that the expenditure towards salaries, wages etc. were to the tune of Rs. 1,87,35,439/- and that administrative and other expenses were to the tune of Rs. 3,42,....