TMI Blog2019 (7) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... Associated Capsules Pvt. Ltd. v/s. The CIT [ 2012 (2) TMI 101 - Supreme Court] in favour of the Respondent-Assessee and against the Revenue. Therefore, the substantial questions of law at (I), (II), (V), (VII) and (VIII) are answered against the Revenue and in favour of the Respondent-Assessee. Taxability of interest income - Interest on bank deposits, inter-corporate deposits, debentures, from sister concerns and other interest' is forming the part of the head Profits and gains of business or profession - HELD THAT:- This question stands answered in favour of the Assessee and against the Revenue in the decision of a Division Bench of this Court in assessee own case [ 2014 (9) TMI 1195 - BOMBAY HIGH COURT] wherein it was hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and against the Revenue. - TAX APPEAL NO. 58 OF 2007 - - - Dated:- 20-7-2019 - M.S. Sonak Nutan D. Sardessai, JJ. Ms. Susan Linhares, Standing Counsel for the Appellant. Mr. Mihir Naniwadekar, with Ms. Vinita Vishram Palyekar, Advocate for the Respondent. ORAL JUDGMENT : (Per M.S. Sonak, J.) Heard Ms. Linhares for the Appellant and Mr. Mihir Naniwadekar, with Ms. Vinita Palyekar for the Respondent. 2. By an order dated 12th October, 2007, this Appeal was admitted on the following substantial questions of law : (I) Whether in the facts and in the circumstances of the case, the ITAT has erred while referring the issue to the file of A.O., to exclude 90 % of net' in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applying the provision of Section 172 in holding that section 40(a)(i), is not applicable, particularly when section 172 concerned with levy and recovery of tax in a case of any ship, as against section 195 r/w 40(a) (i) of the IT Act, refers to non-resident Assessee as in the present case ? (VII) Whether the findings of the ITAT, that only 90 % of net' income from the transfer of vessel' and barge freight', has to be excluded, for the purpose of computing profits of the business under clause (baa) of Explanation to section 80HHC, is right in law ? (VIII) Whether the findings of the ITAT that, only 90 % of the net' income from the lease hire charges' received by the Assessee apart from deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven this question stands answered in favour of the Assessee and against the Revenue in the decision of a Division Bench of this Court in the case of Commissioner of Income Tax, Goa vs. V.S. Dempo Co. Ltd. [2015] 53 taxmann.com 41 (Bombay) In paragraphs 14 and 15, this is what the Division Bench of this Court has observed, incidentally in the case of the very same Assessee: 14. Thus, after taking into consideration the settled legal position as enumerated from the aforesaid citations and as stated earlier, in the present case also as per the own findings of the Assessing Officer, the Assessee is utilizing deposits for giving security to the banks and opening Letters of Credit etc. As per the records, investing surplus funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been reopened. 15. The Respondent/Assessee has utilized the surplus money for making investments in the bank deposits or call money market or inter-corporate deposits and it always retained its character as business assets. In our opinion the interest income earned by the Assessee has direct nexus with its business activity, as the said amounts were invested by the Respondent/Assessee for availing short term loans or for taking out LC opening. The object clauses of the Memorandum and Articles of Association particularly clauses (55) and (82) permit the company to lend, advance or deposit money as part of the business activity and the Assessee company carries out money market which is one of its business activities. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , however, points out that in the present case, the ITAT has recorded, as a matter of fact, that the net rates are either negative or nil. He, in fact, refers to paragraph 12 of the order of the ITAT in which it is seen that as against proceeds of ₹ 5,31,741/- from Electronic Data Processing, the expenditure is to the tune of ₹ 9,65,195/-. Similarly, as against the proceeds from Professional Services Rendered to the tune of ₹ 33,69,863/-, the expenditure is of the same amount. Mr. Naniwadekar, therefore, submits that even if this substantial question of law were to be answered in favour of the Revenue and against the Assessee, the same would make no difference in so far as the ultimate conclusion recorded by the ITAT is co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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