2015 (11) TMI 1789

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....tive grounds in former AYs appeal ITA 555/Ahd/2012 inter alia challenging the CIT(A)'s order affirming disallowance out of remuneration paid to working partners us 40(b)(v)(2) amounting to Rs. 2,36,874/-. Its second substantive ground challenges validity of reopening. This latter ground is snot pressed in the course of hearing. Assessee's latter appeal assails correctness of the above stated section 40(b)(v)(2) identical disallowance of Rs. 3,23,807/-. Both parties are in unison that facts and the issue involved are identical in the two impugned assessment years. We take up ITA 555/Ahd/2012 for Assessment Year 2006-07 as the 'lead' case accordingly. 3. The assessee-firm is a dealer of Hero Honda motor cycles and service work. It filed it....

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....e stated that is only business activity was only of motor cycle trading. And any activity related or ancillary threats in the line of main business was part and parcel of business income to be assessed as such. It further highlighted its capital, bank FD limit & current liability figures against fixed assets, current assets including stock in hand and claimed remaining balance as business investment because of surplus funds to be invested in order to avoid the same lying idle. A further clarification also came that these surplus funds fetched FD interest of Rs. 4,45,190/-. It also claimed to have taken an overdraft thereupon paying interest of Rs. 3,80,895/-. The assessee accordingly justified its action in treating the above stated interes....