2020 (11) TMI 928

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..... case, the Ld. CIT(A) erred in confirming the action of the A.O (Assessing Officer) in considering net interest income of Rs. 14,29,539/- as income from other sources ignoring the fact that appellant was a registered NBFC Company since 1998 and for various preceding and subsequent assessment years had been offering the interest income as business income which was accepted as such by the Revenue in all the assessments completed u/s 143(3) of the Act. 2. On the facts and circumstances of the case, the Ld. CIT(A) erred in confirming the action of the AO of not allowing the business expenditure of Rs. 27,75,500/- in view of the fact that AO treated the net interest income as income from other sources though the appellant is a Non-banking fina .....

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..... expenditure was allowed against the same. 3.2 The assessee is stated to be a resident corporate entity and a nonbanking financial company (NBFC). It holds certificate of Registration as NBFC since 09/03/1998 from RBI, a copy of which is placed on record. During the course of assessment proceedings, it transpired that the assessee earned interest income of Rs. 60.56 Lacs and incurred finance cost of Rs. 46.27 Lacs. The Ld. AO opined that since the assessee did not have any business other than Income from House Property and the assessee has been allowed deduction u/s 24 which would cover all deductions, the net interest income of Rs. 14.29 Lacs was to be assessed under the head Income from Other Sources as against Business income offered by .....

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..... e us, Ld. AR, drawing our attention to assessee's financial statements, urged that the assessee was registered NBFC since 1998 and it was in the business of advancing loans and therefore, the interest income would constitute Business Income for the assessee. It has been submitted that in all the preceding as well as in succeeding years, the interest income was always been reflected as Business Income and the said treatment was never disturbed by the revenue. In support, Computation of Income for AYs 2011-12 & 2012-13 has been placed on record. The Ld. AR further urged that consequently all expenditure incurred by the assessee during the course of its business would be an allowable expenditure. The Ld. DR submitted that the assessee remained .....

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