TaxTMI 
TaxTMI 
2020 (7) TMI 596
X X X X Extracts X X X X
X X X X Extracts X X X X
....2012-13: "1. That interest income on FDR's pledged for security purposes in obtaining the contract business comes within the ambit of business income. 2. That the ld. CIT(A) wrongly held interest income on securities as income from other sources. 3. That on 26.08.2015, whatever queries were given to the appellant for 07.09.2015, they were properly responded by speed post on 04.09.2015 and they are all on record. 4. That the appellant cited the judgment of Hon'ble Karnataka High Court in Commissioner of Income Tax and Another v/s Chinna Nachimuthv Constructions [2008] 297 ITR 70 (Kar) wherein the Court relying on an Apex Court decision in the case of CIT v/s Govinda Choudhury and Sons reported in [1993] 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... rate is applied by learned AO on the basis of written submissions of the appellant on 11/11/2016 the offer of net profit was conditional the offer was not accepted by learned AO in Toto. Hence the offer became redundant. 3. That in the case of the appellant in asst year 2011-12 6.5% N.P. rate was applied and in subsequent as year in 2015-16 7% N.P. rate was applied by the leaned A.O. 4. That the appellant vide written submissions dated 07/11/2016 explained before the learned AO that interest on FDRs amounting to Rs. 31,95,171/- was received by placing the FDRs as security amount for purposes of obtaining contracts & tenders. This was examined by the learned AO and nothing adverse was found. Hence income from interest is b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntees. 5. We have heard the rival submissions and gone through the material on record. Undisputedly, the assessee had not produced these documents before the lower authorities, as is clear from para 5.3.1 of the impugned order where the ld. CIT(A) had mentioned that the assessee had not attended the hearing nor filed any application for adjournment. Further, the ld. CIT(A) had also observed that this interest income cannot be considered as business income as the assessee is not able to prove that FDRs were intrinsically related to the business of the assessee and was required to be considered as income from other sources, Since now documents have been filed in the form of FDRs, performance bank guarantees etc , we are of the opinion that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....we deem it appropriate to remand the matters to the file of CIT(A), pertaining to the issue involved in ground No. 1 to 5 of appeal No.119/Agr/2016 and ground No. 4 of appeal No.441/Agr/2018 , with the direction to examine these documents (1 to 64) filed on 11.07.2019 before the Tribunal in both the appeals , in accordance with law and to find out whether the interest earned by the assessee on FDRs was intrinsically related to the business of the assessee or not. If it is found on examination that the interest income is related to the business of the assessee, the same may be considered as business income and accordingly the income of the assessee is computed by applying the NP rate. For the above purpose, the ld. CIT(A) is duty bound to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ubsumed in the estimated income at 8%. 10. On the other hand, ld. DR had submitted that the assessee had already been given benefit of depreciation and it was submitted that the amount of Rs. 65,28,670/- was already taken into account for depreciation. 11. We have heard the rival submissions and have gone through the record. Undisputedly, the issue has been settled by Hon'ble Supreme Court in the case of assessee, as has been rightly recorded by the ld. CIT(A) in the order for assessment year 2014-15. In order to give clarity, we direct the Assessing Officer to compute the taxable income of the assessee after giving benefit of interest to partners ,remuneration to the partners and depreciation. The taxable income of the assessee wo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....through the record. The assessee itself has admitted net profit rate of 8% as reasonable in the preceding assessment year in the identical facts and circumstances. Further assessee cannot be given benefit of subsequent assessment year as those estimation was done after rejection of books of account. Admittedly, the assessment can be made by the assessing officer, based on previous years NP of the assessee or on the basis of comparable instance involved in the same business in the previous and subsequent assessment years. In the present case, the assessee relied upon his own cases for the subsequent years .Though found that the assessee has not challenged the NP rate of 8% applied for assessment year 2012-13 and 2013-14 in which the turno....