2023 (8) TMI 508

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.... 2010-11. 2. In this appeal, the assessee has raised the following grounds:- "On facts and in law learned CIT-Appeals erred in holding that impugned rectification order is correct in law. Learned CIT Appeals erred in not appreciating that the mistake sought to be rectified as per notice u/s 154 issued by A.O. did not contemplate or disclose his intention to bifurcate and re compute income under two different heads of income viz profits and Gains of Business and Income from other sources when total income was already assessed u/s 143 (3) (after discussion) as business income, and hence the rectification order passed by A.O. for reason in respect of which no notice was issued u/s 154 is contrary to law. Without p....

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.... Act treated the interest income of Rs. 10,18,211, received by the assessee as income from other sources and set off the brought forward losses against the business income after reducing the aforesaid interest income. Accordingly, the AO assessed the total income of the assessee at Rs. 10,18,211. 5. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee and held that no evidence has been submitted by the assessee to prove that the interest receipts do have a business nexus. The relevant findings of the learned CIT(A), vide impugned order, are as under:- "The other contention of the assessee is "there's nothing in the IT act that mandated that interest income can be assessed only and only under th....

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....the same as income from other sources instead of income from the business as claimed by the assessee. We find that the learned CIT(A) also rejected the submission of the assessee on the basis that the assessee has not submitted any evidence to prove that the interest receipts do have a business nexus. During the hearing, the learned AR referred to the submissions filed by the assessee before the AO during the rectification proceedings, wherein it was submitted that the interest income is earned from the business activity of the assessee firm. Thus, from the above, it is evident that the AO and learned CIT(A) disagreed with the submissions of the assessee in the rectification proceedings and seeks to examine the issue regarding characterisat....