TMI Blog2012 (5) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... f royalty, rent services, Misc. income etc. is assessable under the head Income from business or Income from other sources . (b) Eligibility of deduction u/s 80IA (c) Whether the Runway, Isolation Parking bay, Road, Culverts and drain constitute Plant or Building for the purpose of allowing depreciation. In assessment year 2005-06, the revenue is also contesting the issue viz., Whether the brought forward unabsorbed depreciation can be set off against the income assessed under the head Income from other sources . 3. The first common issue relates to the head of income under which the incomes derived by way of Royalty, rents services, Misc. income etc. are assessable. The Tribunal has considered an identical issue in the assessee s own case relating to the assessment year 2004-05 in ITA No.541/Coch/2007 and has held as under:- 7. We have heard the rival contentions and carefully perused the record. It is well settled proposition of law now that the income derived on exploitation of commercial assets would be business income. The question whether a particular type of income is to be treated as business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st on income tax refund do not have any connection with the core business activities carried on by the assessee. Accordingly, in our view, they should be assessed under the head Income from other sources . The nature of other receipts that are included under the head Miscellaneous income is not available. Accordingly, in our view, the assessability of various items included under the head Miscellaneous income would depend upon the nature of various items of income included therein, which require examination item wise. Accordingly, we set aside the order of ld CIT(A) with regard to the Miscellaneous income and restore the same to the file of the AO with the direction to examine the nature of income included under the said head and take the decision in the light of foregoing discussions and also in accordance with the law. 9. The Ld A.R fairly conceded that the interest income derived from bank deposits is assessable under the head Income from other sources . Accordingly, we set aside the order of ld CIT(A) on this issue and restore that of the AO. The views expressed by us in assessment year 2004-05 are equally applicable to the years under co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y he rejected the claim of deduction u/s 80IA of the Act. 5. However, the Ld CIT(A) held that the MOU entered with the Airports Authority of India for provision of various facilities can be taken as the agreement contemplated in the condition (b) supra. With regard to condition (c), the Ld CIT(A) accepted the contentions of the assessee that there is a difference between the Commencement of business and Starting operation and maintenance of infrastructure facility . He further accepted the contention that the Tribunal has only considered the issue relating to the Commencement of business and it did not consider the issue relating to the Operation and Maintenance of infrastructure facility . Accordingly the Ld CIT(A) held that the finding of the AO is not based on facts or law and accordingly directed the AO to allow the deduction u/s 80IA of the Act. 6. We have heard the rival contentions on this issue. The agreement contemplated in clause (b) of sec. 80IA(4) is the agreement entered with Government/Government bodies for (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining a new infrastructure facility. Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or fresh examination of the issue in accordance with the law. 8. The next common issue relates to the allowance of depreciation on certain assets, viz., Runway, Isolation Parking Bay and Roads, Culverts Drains. According to the assessee, these assets are to be treated as Plant for the purpose of depreciation and hence they should be allowed depreciation @ 25%. However, the AO took the view that they fall in the category of building and hence he restricted the depreciation to 10%. The Ld CIT(A) allowed the claim of the assessee by following the decision rendered by the tribunal in the following cases:- (a) JCIT Vs. National Airport Authority of India (2008-TIOL-135-ITAT-DEL) (b) HAL Vs. ACIT in ITA No.776/Bang/86 by Bangalore bench of ITAT. Since a particular view has been taken by the above said benches of Tribunal, we are inclined to follow the decision rendered in those cases. However, we notice that the Ld CIT(A) did not verify whether all the assets stated above are covered by the above said decisions. Hence for the purpose of carrying on necessary verification, we set aside the order of Ld CIT(A) on this issue and restore the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds diverted to the sister concern of the assessee. According to the tax authorities, the assessee did not receive any income from the investment made in the subsidiary companies. The assessee did not show that there was commercial expediency in making the said investments. The ld CIT(A) has also observed that the assessee did not strongly argue about the possible diversion of reserves and surplus held in the books of account. Hence the disallowance of ₹ 31,88,157/- made by the AO was confirmed by Ld CIT(A). Before us, the Ld A.R contended that the assessee has got adequate reserves and surplus for making investment in subsidiary companies. 13. The assessee has filed a copy of annual report for the year ending 31.3.2007. From the said annual report, we notice that the assessee did not possess any reserves and surplus as on 31.3.2006, but the reserves and surplus as on 31.3.2007 stood at ₹ 16.39 crores, which means that the assessee has recouped the past losses only during the year under consideration. It is pertinent to note that the profit accrues as at the year end and hence the sum of ₹ 16.39 crores shall be deemed to have been accrued as on 31. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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