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2021 (9) TMI 1536 - AT - Income TaxCharacterization of receipts - Chargeability of interest on deposits/loans - assessee has been following this system from the earlier years and the interest income has been offered as a business income - only difference of opinion with the CIT(A) that, these surplus funds are not necessary to the assessee and there is no requirement for the assessee to make deposits - HELD THAT:- As in the present case, the assessee company has earned interest on bank deposits and on short term call money loan. AR demonstrated working of interest income on bank deposits and interest on term loan - interest income earned on the term loan provided @6% p.a. in the August 2005 was continuing and interest income was offered in earlier financial years. Borrower of loan has provided guarantee to lenders of the assessee company which benefited substantially to the assessee business projects and operations. Since the term loan provided by the assessee to the barrower is linked in obtaining counter guarantee to assessee business prospects and there exist the nexus of business transactions. We considering all are of the opinion that interest income earned by the assessee take the character of business transaction and to be treated as business income. Accordingly, we direct the Assessing Officer to treat the interest income taxable as business income and allow the grounds of appeal of the assessee. Claim of depreciation u/s 32(1)(ii) - right to set up an infrastructure facility and collect annuity thereon - assessee had constructed the Road and have the right to earn revenue in the form of annuity from the use of such intangible Asset being license or business or commercial right contemplated under the provisions of the Act - HELD THAT:- We considering the factual aspects, circumstances, legal decisions West Gujarat Expressway Ltd [2016 (4) TMI 1184 - BOMBAY HIGH COURT] ,Infrastructure Leasing & Financial Services ltd [2019 (12) TMI 1499 - ITAT MUMBAI] are of the opinion that the assessee is eligible for depreciation on Road on (B.O.T) basis treating it as Intangible Asset under section 32(1)(ii) of the Act. Accordingly, we direct the assessing officer to grant depreciation as discussed and allow the additional ground of appeal in favour of the assessee.
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