TaxTMI 
TaxTMI 
2022 (6) TMI 966
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....ther sources" as against the claim of the assessee being income under the head " income from business" and (ii) against the action of the ld CIT(A) in confirming the disallowance made by the AO under the head " prior period expenses". 4. In regard to the issue of interest income from fixed deposits assessed as income under the head " income from other sources" as against "income from business" as claimed by the assessee, it was submitted by ld AR that the assessee had deposited its funds in short term deposits with the bank for period ranges between 10 days to 91 days. It was the submission that the assessee's accounts with the bank was also known as "Flexi Account" whereby the bank also uses to transfer excess of the funds in the account over and above the average requirements to Fixed Deposits by the bank itself. It was the submission that the AO had disallowed all the interest received by the assessee from its deposits with the bank, which had been claimed by the assessee as "business income". It was the submission that the Assessing Officer had treated the same as liable to be taxed under the head " income from other sources". It was fairly agreed by ld AR that for the assessm....
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.... Central Government and appropriately advancing die same as loans, grants or subsidies. In a larger canvas the appellant-Corporation plans, promotes and makes financial programmes for the benefit of these societies and other entities to which such loans, grants and subsidies are advanced. We may say it is really in the nature of an intermediary with expertise in the financial sector to carry forward the intent of the Central Government to assist State Governments, Cooperative Societies, etc. Since this is the business activity, that is what has persuaded us to opine that the income generated in the form of interest on the unutilised capital is in the nature of business income. The objectives are wholly socioeconomic and the amounts received including grants come with a prior stipulation for the funds received to be passed on to the downstream entities. This is the reason they have been treated as capital receipts. However, we are unable to opine that since this is a pass-through entity on the basis of a statutory obligation, the advancement of loans and grants is not a business activity, when really it is the only business activity. Once it is business activity, the interest genera....
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....rest on advance to contractors as business income. It was the submission that the ld CIT(A) has treated the interest on fixed deposits, interest on SLDC Development Fund and interest on Flexi Account as liable to be assessed as "income from other sources". The rest of the interest income has been treated as business income. It was the submission that the assessee has not been able to prove how any portion of other interest incomes were in any way linked to the business activities of the assessee. It was the further submission that the AO has also raised a specific query as to how the deposits were part of the statutory compliance. The assessee has not been able to show anything either before the AO, or the ld CIT(A) and also before the ITAT. It was the submission that the ld CIT(A) has been extremely reasonable in his order and same should be upheld. 8. We have considered the rival submissions. At the outset, what is the noticed here is that the deposits are short term. The maximum period of the deposits is 91 days. It is not as if the assessee is attempting to make money out of making deposits in the bank. The assessee is admittedly a loss making concern and desperate attempting ....
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....ssee organization functions all over the State of Odisha. The assessee sometimes receives intimation of the expenses incurred on a later date. Consequently, depreciation of the earlier years has been claimed during the current year based on the actual intimation of the installation and start of the operation. It was the submission that certain other expenses in the form of back pay revision have also been claimed. It was the submission that these are expenses actually incurred by the assessee though it relates to earlier years. It was the submission that the assessee has no objection, if this issue is restored to the file of the Assessing Officer for allowance in the year to which it relates. 10. In reply, ld CIT DR drew our attention to page 28 of PB, which was breakup of the prior period expenses. It was the submission that the depreciation was on account of demerger of the GRIDCO, certain business loss/unabsorbed depreciation had been allocated to the assessee. It was the submission that the depreciation relates to earlier years and the assessee having not claimed it during the earlier years, the same was not liable to be allowed during the relevant assessment years. It was the....