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2015 (2) TMI 4 - AT - Income TaxReopening of assessment - reason to believe - Held that:- Non supplying of the reasons for reopening has vitiated the entire reassessment proceedings at the threshold, as per the decision of the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs CIT reported in (2002 (11) TMI 7 - SUPREME Court). In such a case we set aside the order of the CIT(A) and restore the case to the file of the AO, with a direction that the AO shall supply the reasons to the assessee and on receipt of the objections, he shall first dispose off the objections of the assessee and then proceed to frame the assessment. - Decided in favour of assessee for statistical purposes. Receipt of interest income - business income v/s income from other sources - Held that:-We cannot accept the reasoning of the revenue authorities wherein they have simply ignored the documents produced before them because the requisite documents were produced before the revenue authorities. We are of the opinion that interest received from Maneklal Bhandari at ₹ 8,99,120/- is to be treated as business income. However, interest on Income tax refund at ₹ 44,241/- is to be treated as income from other sources. We, therefore, set aside the order of the CIT(A) on this issue and direct the AO to treat the receipt of interest income from Mr. Maneklal Bhandari as business income (Rs. 8,99,120/- ). - Decided partly in favour of assessee. Disallowance of expenses - AO disallowed the expenses because there was no business of the business with regard to housing development - Held that:- It is a fact that there was a slowness in the business of the assessee but the assessee, as we have observed in the previous GOA, had diversified its business to housing finance and was maintaining its business premises and business modus. This clearly shows that the assessee was carrying on the business and the expenses being incurred were business expenses. It is also a fact that there is no claim of the revenue authorities to hold the expenses to be non genuine. In such a circumstances, we are inclined to accept the arguments and GOA of the assessee to allow the expense, as disallowed. - Decided in favour of assessee.
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