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2019 (1) TMI 672 - AT - Income TaxNature of income - business income or income from other sources - Non carrying of business operations - set off the business loss against the income from other sources denied - business of trading in shares, stocks, debentures, bonds, fixed and other deposits including finance of short and long term deposits etc. - claim of business expenditure - Held that:- The stand of the assessee was accepted by the revenue in all the years as discussed above either the interest income was accepted as business income or the business loss was allowed to set off against the interest income. There was no material change in the facts and circumstances in the year under consideration. Therefore, in our considered view, the Revenue cannot take a different stand in the subsequent year. We also note that the assessee has been carrying on the business of money lending in a systematic manner without having the registration with RBI as NBFC. Merely, the fact that the assessee is not registered with RBI AS NBFC, cannot lead to draw an inference that the assessee is not carrying out the business activity. The registration with RBI as NBFC and business activity of the assessee, both are different aspects and cannot be applied for holding that the assessee is not engaged in the business activity. we also note that the assessee has been carrying on the business of money lending in a systematic manner without having the registration with RBI as NBFC. Merely, the fact that the assessee is not registered with RBI AS NBFC, cannot lead to draw an inference that the assessee is not carrying out the business activity. The registration with RBI as NBFC and business activity of the assessee, both are different aspects and cannot be applied for holding that the assessee is not engaged in the business activity. The genuineness of the expenses claimed by the assessee have not been doubted by the authorities below. Moreover, there is no issue regarding the genuineness/reasonableness of the expenses claimed by the assessee arising from the order of authorities below. Therefore, we are not inclined to adjudicate the same. In view of above, we are of the view that the interest income of the assessee should have been treated as income from business and profession. Therefore, we set aside the order of ld. CIT(A) and direct the AO to treat the interest income of the assessee as income under the head business and profession. Disallowance u/s 14A - Held that:- We direct the AO to restrict the disallowance u/s 14A r.w.r. 8D of the Act to the extent of Dividend Income. In view of above the ground of appeal of the assessee is partly allowed.
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