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2015 (8) TMI 598 - AT - Income TaxDisallowance u/s 14A - Held that:- Once the facts and circumstances for the assessment year 2008-09 and assessment year under consideration are identical then the basis of disallowance can not be different. Accordingly we direct the AO to restrict the disallowance to 10% of the expenditure incurred for composite activity resulting in exempt income as well as taxable income. The above directions are given in peculiar facts and circumstance of the case and to maintain the rule of consistency, therefore, would not be applied as precedence. Treatment of interest income - income from other sources OR business income - Held that:- There is no dispute that the assessee’s business activity is real estate development inclusive of purchasing, selling, developing, constructing, hiring or otherwise dealing in real estate. Since the assessee has not started the development activity and was having its own fund, therefore, the assessee has invested some of the fund in mutual fund and other part in ICDs. It is apparent from the facts and circumstances of the case that the assessee is earning dividend income and appreciation of investment from the investment in the mutual fund and further certain part of the surplus fund is used for ICDs for earning the interest income. The investment in mutual fund and ICDs is not a regular business activity of the assessee. It is only a time gap utilization of the surplus fund till it is used for business of real estate development. Accordingly we do not find any error or illegality in the orders of authorities below in treating the interest income as income from other sources.
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