TaxTMI 
TaxTMI 
2025 (8) TMI 149
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....sment invalid? (ii) Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that mistake of making assessment under Section 143 read with Section 147 can be rectified by invoking Section 292B? (iii) Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal is right in law in treating the interest income under the head 'income from other sources' without considering the facts of the present case? And (iv) Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal is right in law in upholding that the interest income cannot be netted off against interest paid when in fact the interest income arises from the business of the assessee?" 3. The appeal arises under the following circumstances: (a) On 25.11.2003, the assessee filed their return of income for the assessment year 2003-2004 declaring a total income of Rs. 9,76,23,383/-. (b) On 19.12.2003, the assessment was completed under Section 143(1) of the Income Tax Act, 1961 [hereinafter referred to as the 'the Act'], and the assessee was given a refund ....
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....ounsel further submitted that the fourth substantial question of law, is covered by another judgment of this Court dated 12.06.2025 made in TCA No.1133 of 2010 [Commissioner of Income Tax-LTU v. M/s.Rane Brake Lining Ltd]. (iii) As regards the first two substantial questions of law, the learned counsel submitted that the assessment order that was impugned before CIT(A) and ITAT was passed under Section 143 (3) r/w 147 of the Act and that the contents of the order would show that the assessment order proceeded on the basis that it was a reassessment pursuant to the notice under Section 148 of the Act. He would further submit that even the CIT(A) had proceeded on the basis that the assessment order was passed under Section 147 of the Act. He would therefore submit that the ITAT erred in observing that it would make no difference as to whether the order was passed under Section 143(3) of the Act or under Section 147 of the Act, as the scope of the assessment under both the provisions were one and the same in substance. (iv) The learned counsel further submitted that if the assessment order is not clear as to whether it was under Section 143 (3) of the Act or under Section 147 of....
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.... by the assessee in its business, the deposit of money with the bank either under compulsion like maintaining the margin money with the bank or for opening of foreign letters of credit or for obtaining the loan itself or cash credit facility or the voluntary deposits made by it of the surplus funds, which would otherwise be lying idle, the assessee, in its own business or commercial prudence, makes a deposit in bank and incidentally earns an interest through it or interest from staff loans or customers on the belated payments and such interest income is nothing but its regular business income. 24. Section 56 of the Act, providing for "income from other sources", cannot be applied at all to such interest income. The income from business need not be directly related only to sale of goods or services. It can be from the sources like bank deposits, which are idle or inactive sources and do not involve any actual trading or manufacturing activity on the part of the assessee. Therefore, interest income earned by the assessee in the ordinary course of business, cannot be said to be excluded from the head "Income from business or profession" in Part D, comprising of sections 28 to....
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.... case of Assistant Commissioner of Income Tax, Bangalore v. Micro Labs Limited [(2015) 17 SCC 96], has held that deduction under Section 80HHC of the Income Tax Act, 1961 (the Act) had to be given without reducing the deduction under Section 80IB of the Act." Accordingly, we answer the fourth substantial question of law in favour of the assessee. 10. The first two substantial questions of law referred above deal with the issue as to whether the assessment order itself is valid in law. As stated earlier, it is the case of the assessee that the assessment order was in fact passed under Section 147 of the Act and the conditions laid to invoke Section 147 of the Act were not fulfilled and therefore, the entire assessment order is liable to be set aside. It is also the assessee's case that no issue had escaped assessment for invoking Section 147 of the Act. 11. Admittedly, a notice was issued under Section 148 of the Act on 09.07.2004 and the same was withdrawn on 03.09.2004. The letter withdrawing the notice under Section 148 of the Act, issued to the assessee reads as follows: "Kindly refer to the above Return of Income filed by you on 25th November, 2003. ....