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2020 (11) TMI 928 - AT - Income TaxCorrect head of income - treatment of interest income earned by the assessee - business income or income from other sources - Disallowance u/s 14A since assessee earned exempt dividend income - assessee is stated to be a resident corporate entity and a non-banking financial company (NBFC) -HELD THAT:- We concur with Ld. AR’s submissions that the assessee was registered as NBFC with RBI and would earn interest income by advancing loans. The activity of advancing loans, in such a case, would become assessee’s business and naturally, the interest earned thereupon would constitute Business Income for the assessee. In fact, it is the plea of Ld. AR that such income was always offered to tax as Business Income and the said treatment was never disturbed. The rule of consistency would demand that their being no change in facts or circumstances, the accepted position should not be disturbed. Since the assessee failed to make effective representation before Ld. first appellate authority, we deem it fit to remit the matter back to the file of Ld. CIT(A) for re-adjudication in the light of arguments put forth by Ld. AR before us. If the interest income has been accepted to be the Business Income in all the other years, the said treatment should not be disturbed in this year. Consequently, the assessee would be eligible to claim the deduction of business expenditure, if otherwise found in order. Since the matter of disallowance u/s 14A was not adjudicated by Ld. CIT(A) in view of the fact that entire business expenditure was disallowed as well as confirmed, the same may also be re-adjudicated in the set aside proceedings. Appeal allowed for statistical purposes.
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