TaxTMI 
TaxTMI 
2024 (8) TMI 816
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment Centre, Delhi under Section 143(3) read with Section 144B of the Income Tax Act, 1961 (the Act) concerning Assessment Year 2018-19. 2. The grounds of appeal raised by the Revenue reads as under: "1. Whether, on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in treating the interest income under the head Business Income and allowing the expenses claimed by the appellant company of amounting to Rs. 5,66,35,173/-. 2. The appellant craves leave to add, alter, amend, append or delete any of the above grounds of appeal." 3. Briefly stated, the assessee is a Non-Banking Finance Company (NBFC) registered with Reserve Bank of India (RBI). In the course of assessment proceedings under Section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f India and accordingly the assessee company had disclosed the assets in the balance sheet as per the requirement of the Companies Act and applicable Accounting Standard. The appellant company further contended that it is important to note that as per the schedule III only those assets wherein the company intends to trade has to be shown in stock in trade. Accordingly, the assessee company has made disclosure of bonds and debentures under investment while loans and advance under the head loans and advances 4.3 In this case, the appellant company is a Non-Banking Financial Company (NBFC) registered with RBI having NBFC Ne-B-14.03512 and in Para 4 of the Assessment Order, Ld. Assessing Officer has also mentioned that the assessee is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(A) has dismissed the assessee's ground without going into the details regarding business of granting the loans as the assessee was registered as NBFC. There is no clear cut finding regarding this aspect in the order of the authorities below. CIT (A) has rather based his order on the fact that assessee is claiming capital gain on sale of shares, hence, no business income. This reliance is not justified as assessee is a NBFC and doing business of granting loan. Hence, we allow this ground of assessee's cross objection." (b) The Hon'ble ITAT Ahmedabad in case of Soham Securities Ltd. in ITA no. 2433/Ahd/2015 dt 02/11/2018 has held "Para 8.4, In addition to the above, we also note that the assessee has been carryi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....me from business and profession. Therefore, we set aside the order of Id. CIT(A) and direct the AO to treat the interest income of the assessee as income under the head business and profession." (c) The Hon'ble ITAT Delhi in the case of M/s Vashulinga Finance Pvt. Ltd ITA No- 5464/Del/2011 had even held interest from Fixed deposit as business income of the assessee as it is an NBFC. 4.5 The above three judgements of the Hon'ble ITAT including jurisdictional ITAT, New Delhi was carefully gone through and considered and it was found that: In case of the order of the Hon'ble ITAT Delhi in the case of Utkal Investments Ltd held that since the assessee is a NBFC and doing business of granting loan, in this case....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of granting loan, Debenture and bond therefore, the income will certainly be assessed as business income as is the sprit and intention of the ratio of the judgement." 5. The Revenue is in appeal against the action of the CIT(A) re-characterizing the assessed income on this count from income from other sources to business income. 6. We have heard the rival submissions on the issue and also perused the orders of the lower authorities. In our view the CIT(A) has rightly held that the interest income derived by the assessee company registered as Non-Banking Finance Company required to be treated as business income earned in the ordinary course its core business activity. The re-characterization of income from business income as declared b....