TMI Blog2015 (2) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... ring of expenses and thereafter to allow the expenses found actually incurred by the assessee for business purpose. - Decided in favour of assessee for statistical purposes. Hire charges - income received from ‘other sources’ OR ‘business income’ - Held that:- As furniture and fixtures were rented by the assessee temporarily and the same have already been disposed off during the next financial year. Hence, keeping in view the principle of consistency, we direct that the hire income from furniture and fixtures etc. be treated as ‘business income’. - Decided in favour of assessee. Interest income from FDRs - income received from ‘other sources’ OR ‘business income’ - Held that:- the interest income from FDRs can not be treated as ‘busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Neelam Jadhav, A.R. For the Respondent : Shri R.N. D Souza, D.R. ORDER Per Sanjay Garg, Judicial Member: With this common order we will dispose of the above titled two appeals preferred by the assessee against the orders of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] dated 18.03.2010 and 20.10.2010 relevant to assessment years 2005-06 and 2006-07 respectively. 2. First we take up the assessee s appeal bearing ITA No.4943/M/2010 for assessment year 2005-06. ITA No.4943/M/2010 for assessment year 2005-06: 3. The assessee has taken the following grounds of appeal: The Hon'ble Commissioner of Income Tax (Appeals) has erred in confirming the order of the learned assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned assessing officer in respect of Interest income received of ₹ 4,19,557/- as Income from Other Sources instead of the regular business Income. Accordingly, it is prayed that Interest Income should be treated as business Income and revenue expenses claimed should be allowed in full. 5. Your appellant craves to add, alter, or amend any of the grounds of appeal on or before the date of hearing of appeal. Grounds No.1 2 4. Since these grounds are interconnected, hence are taken together for disposal. The Assessing Officer (hereinafter referred to as the AO) noted that the assessee during the year had not carried out any business activity. He therefore disallowed the various expenses claimed by the assessee. The Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Vide ground No.3, the assessee has agitated the action of the lower authorities in treating the hire charges as income received from other sources against the claim of the assessee as business income . The assessee during the year received hire income from renting furniture and fixtures etc. The AO treated the said income as income from other sources which treatment has been further confirmed by the Ld. CIT(A). The Ld. A.R. has stated that in the preceding assessment years, the said income has consistently been treated as business income . The furniture and fixtures were rented out temporarily when the same were not in use and such a claim had never been disallowed in the past. The assessee had no intention to get the rental inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that of grounds No.1 to 4 of the appeal of the assessee for assessment year 2005-06. Hence, in view of our findings given above, it is held that the assessee has carried out the business activity during the year. However, the issue relating to the claim of expenditure for the purpose of verification is restored to the AO on the same lines as directed hereinabove while disposing of the appeal of the assessee for assessment year 2005-06. Similarly, the hire income from furniture and fixtures etc. is also ordered to be treated as business income whereas the interest income is directed to be treated as income from other sources . 11. Another ground taken by the assessee during the year is relating to disallowance under section 14A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od prescribed by the rules straightaway without considering whether the claim made by the assessee in respect such expenditure is correct. The satisfaction of the AO must be arrived at on an objective basis. In a situation where the accounts of the assessee furnish an objective basis for the AO to arrive at a satisfaction in regard to the correctness of the claim of the assessee, there would be no warrant for taking recourse to the method prescribed by the rules. An objective satisfaction contemplates a notice to the assessee, an opportunity to the assessee to place on record all the relevant facts including his accounts and recording of reasons by the AO in the event that he comes to the conclusion that he is not satisfied with the claim o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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