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2018 (9) TMI 1935 - ITAT MUMBAIInterest income from deposit - income from business or income from other sources - HELD THAT:- The assessee company has been incorporated for setting up of infrastructure facilities being construction of toll road between Hazaribag and Ranchi which is under construction. The assessee earned the interest income upon the borrowed funds of ₹ 46,03,457/- which was deducted from the borrowing cost to arrive at the figure of capital work in progress of ₹ 1,86,25,83,284/-. The promoters of the company had introduced money by way of share capital and also obtained credit facilities from the banks and institutions. The total funds were exclusively meant for use for setting up of the infrastructure facility. The lenders disbursed the funds at specified intervals and the said funds were required to be used for the purpose of setting up of the project. Needless to say that the on account of the time difference, the funds may lies with the bank resultantly earning the interest income in dispute. These funds were deposit in the bank for a short period for the purpose of utilizing the same in the project. Eventually, raising the interest is clearly on account of business exigency. Taking into account, all the facts and circumstances, we are of the view that the finding of the CIT(A) is not justifiable hence the same is hereby ordered to be set aside and we treat the interest income as business income of the assessee. - Decided in favour of the assessee Allowance of revenue expenses - HELD THAT:- On appraisal of the order passed by the CIT(A), we noticed that the CIT(A) has not decided the issue on the basis of this fact that the same was not raised before the AO. Anyhow this issue is required to be adjudicated in accordance with law. In the said circumstances, we set aside the finding of the CIT(A) and the issues are required to be adjudicated at the end of the CIT(A) in the interest of justice in accordance with law by giving an opportunity of being heard to the assessee. Accordingly, these issues are decided in favour of the assessee against the revenue.
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