Shree Gopal Choudhary, Kolkata V. CIT(A)-XVI, KOLKATA, Kolkata

ITA 133/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1534 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 22-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Keywords: Business income; Depreciation; Rule of consistency; Unabsorbed depreciation
• Section: 143(3); 260A

Judgement Text

1 ITA NO.133/KOL/2014 SHREE GOPAL CHOUDHARY, AY 2007-08 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VA RKEY, JM] I.T.A. NO. 133/KOL/2014 ASSESSMENT YEAR: 2007-08 SHREE GOPAL CHOUDHARY (PAN: ACRPC8786G VS. ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-29, KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 21.06.2017 DATE OF PRONOUNCEMENT 13.09.2017 FOR THE APPELLANT SHRI AKKAL DUDHWEWALA, AR FOR THE RESPONDENT SHRI SAURABH KUMAR, ADDL. CIT, S R. DR ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-XVI, KOLKATA DATED 20.11.2013 FOR AY 2007-08. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST TH E ACTION OF THE LD. CIT(A) IN CONFIRMING THE ACTION OF THE AO IN ASSESSING THE IN TEREST INCOME OF RS.24,32,198/- UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF THE CLA IM OF THE ASSESSEE TO BE ASSESSED UNDER THE HEAD PROFIT & GAINS OF BUSINESS AND THEREBY D ISALLOWING THE BENEFIT OF SET OFF OF BROUGHT FORWARD LOSS. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL CARRYING ON THE BUSINESS OF TRADING IN SANITARY WARE AND TILES UNDER THE NAM E AND STYLE OF M/S. USHA INTERNATIONAL. APART FROM THE AFORESAID BUSINESS, THE ASSESSEE ALS O CARRIED ON BUSINESS OF SHARE TRADING AND MONEY LENDING ACTIVITIES IN HIS PERSONAL CAPACITY. IN THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE HAD FILED THE RETURN OF INCOME DECLARING T OTAL INCOME AT NIL. IN THE COMPUTATION OF INCOME FILED ALONG WITH THE RETURN OF INCOME THE ASSESSEE HAD REPORTED CURRENT YEARS 2 ITA NO.133/KOL/2014 SHREE GOPAL CHOUDHARY, AY 2007-08 BUSINESS INCOME AT RS.24,32,198/- AGAINST WHICH HE CLAIMED SET OFF OF BROUGHT FORWARD LOSS AND UNABSORBED DEPRECIATION TO THE EXTENT OF RS.24, 32,198/- FROM THE CURRENT YEARS BUSINESS INCOME. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE HAD DERIVED INTEREST INCOME TO THE TUNE OF RS.21,02,642/- FROM ADVANCES GIVEN TO THIRD PARTIES AND FIXED DEPOSIT HELD WITH BANK OF INDIA. THE AO OBSERVED T HAT NEITHER THE ASSESSEE HELD ANY MONEY LENDING LICENSE TO CARRY ON MONEY LENDING BUSINESS NOR DID HE PAY ANY PROFESSIONAL TAX FOR CARRYING OUT SUCH BUSINESS, THEREFORE, IN HIS VIEW THE INTEREST INCOME SHOULD HAVE BEEN TREATED AS INCOME FROM OTHER SOURCES AND NOT BUSINESS INCOME . THE AO ACCORDINGLY ASSESSED THE INTEREST INCOME OF RS.21,02,642/- AS I NCOME FROM OTHER SOURCES AND HENCE, DID NOT ALLOW THE BENEFIT OF SET OFF OF BROUGHT FORWARD BUSINESS LOSS AGAINST SUCH INCOME. AGGRIEVED BY THE ACTION OF THE LD. CIT(A), THE ASSE SSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO DISMISS THE SAME BY HOLD ING AS UNDER: I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AS WELL AS SUBMISSION FILED BY THE APPELLANT. I FOUND THAT THERE IS NO SUBSTANCE IN T HE SUBMISSION OF THE APPELLANT. THE AO IN THE ASSESSMENT ORDER GAVE DETAIL FINDINGS THAT INTEREST INCOME IS THE INCOME FROM OTHER SOURCES. THE APPELLANT NOT FILED ANY EVIDENCE DURING THE APP ELLATE PROCEEDINGS AS WELL AS ASSESSMENT PROCEEDINGS WHICH ESTABLISHED THAT THE INTEREST INC OME IS AS BUSINESS INCOME. THE INTEREST INCOME ALSO INCLUDE THE INTEREST INCOME FROM BANK O F INDIA RS.12,81,056/- AND AMERICAN EXPRESS BANK RS.54,567/- AND LIFE SOURCES HEALTH CA RE OF RS.4,49,999/-. CONSIDERING THE ABOVE FINDINGS I AM THE VIEW THAT T HE ACTION OF THE AO TO NOT ALLOW TO SET OFF BUSINESS LOSS FROM INCOME FROM OTHER SOURCES IS AS PER LAW. HENCE, I CONFIRM THE ACTION OF THE AO TO NOT ALLOW TO SET OFF BUSINESS LOSS FROM THE I NCOME FROM OTHER SOURCES. THESE GROUNDS ARE NOT ALLOWED. AGGRIEVED, THE ASSESSEE IS BEFORE US. 4. AT THE TIME OF HEARING WE NOTE THAT THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING 47 PAGES WHICH CONSISTS OF DOCUMENTS WHICH WERE FILED BEFORE THE LOWER AUTHORITIES EXCEPT DOCUMENT NO. 4 AND 5. WE NOTE THE DOCUMENTS SET OU T AT SL. NO. 4 AND 5 ARE DOCUMENTS COMPRISED OF SANCTION LETTER OF CREDIT FACILITY BY BANK OF INDIA TO THE ASSESSEE AND THE DETAILS OF FIXED DEPOSITS PLACED AS COLLATERALS AGAINST SUC H SECURITY DEPOSIT. THE LD. DR DID NOT OBJECT TO THE ADMISSION OF THESE DOCUMENTS, SO, WE, IN THE INTEREST OF JUSTICE DEEM IT FIT TO ADMIT THESE DOCUMENTS AS THEY ARE RELEVANT FOR DECI DING THE ISSUE INVOLVED IN THE APPEAL. 3 ITA NO.133/KOL/2014 SHREE GOPAL CHOUDHARY, AY 2007-08 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE INTEREST INCOME OF RS.21,02,641/- COMPRISED OF INTEREST ON FIXED DEPOSIT WITH BANK OF INDIA OF RS.12,81,055/- AND RS.12,26,4 88/- WHICH WAS EARNED BY THE ASSESSEE FROM LOANS AND ADVANCES GIVEN TO FOUR PARTIES NAMEL Y, LIFE SOURCE HEALTHCARE, S. V. TRADING, RAMESH KUMAR & CO. AND AMERICAN EXPRESS. FROM A PERUSAL OF THE ASSESSMENT ORDER, WE NOTE THAT THE PREMISE ON WHICH THE AO ASS ESSED THE INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF BUSINE SS INCOME WAS THAT THE ASSESSEE DID NOT OBTAIN ANY MONEY LENDING LICENCE FROM RESERVE BANK OF INDIA TO CARRY ON THIS ACTIVITY AND ALSO DID NOT PAY ANY PROFESSIONAL TAX FOR CARRYING OUT MONEY LENDING ACTIVITY. WE NOTE THAT THE AO HAS NOT GIVEN ANY REASON FOR ASSESSING THE I NTEREST INCOME DERIVED ON FIXED DEPOSIT PLACED WITH BANK OF INDIA UNDER THE HEAD OTHER SOU RCES. WE NOTE THAT THE LD. CIT(A) ALSO CONFIRMED THE ACTION OF THE AO HOLDING THAT THE EXP LANATION FURNISHED BY THE ASSESSEE LACKED MERIT AND SUBSTANCE. 6. WE NOTE THAT THE INTEREST DERIVED BY THE ASSESSE E ON FIXED DEPOSIT PLACED WITH BANK OF INDIA, THE AR INVITED OUR ATTENTION TO THE COPY OF THE SANCTION LETTER ISSUED BY BANK OF INDIA WHICH IS PLACED AT PAGES 7 TO 12 OF THE PAPER BOOK, WHICH SHOWED THAT THE BANK OF INDIA HAD GRANTED CREDIT FACILITY TO RS.400 LACS FO R ASSESSEES TRADING BUSINESS OF SANITARY WARE AND TILES. ON PERUSAL OF THE SANCTION LETTER OF BANK, WE NOTE UNDER THE HEADING SECURITY IT HAS BEEN EXPLICITLY STATED THAT THE A SSESSEE WOULD HAVE TO PLEDGE FDS OF RS. 75 LACS FOR THE FUND BASED FACILITY AND ANOTHER RS. 10 0 LACS AS MARGIN AT 33.33% OF THE SANCTION LIMIT OF LETTER OF CREDIT. AT PAGES 13 TO 19 OF TH E PAPER BOOK, THE ASSESSEE HAD PLACED COPIES OF THE RELEVANT FIXED DEPOSIT RECEIPT PLACED WITH THE BANK OF INDIA AS SECURITY FOR THE AFORESAID SANCTIONED CREDIT FACILITY. THE ASSESSEE S CONTENTION IS THAT THE FIXED DEPOSIT PLACED WITH BANK OF INDIA WERE INTRINSICALLY RELA TED AND HAD DIRECT NEXUS WITH THE CREDIT FACILITY OBTAINED FROM THE SAME BANK TO FUND ASSESS EES WORKING CAPITAL REQUIREMENTS. SO, ACCORDING TO THE ASSESSEE, THE INTEREST INCOME DERI VED FROM FIXED DEPOSIT WAS EARNED BY THE ASSESSEE IN THE COURSE AND FOR THE PURPOSE OF BUSIN ESS AND RELIED ON THE DECISIONS OF HONBLE APEX COURT IN THE CASE OF CIT VS. KARNAL COOPERATIV E SUGAR MILLS LTD., 243 ITR 2 (SC), CIT VS. JAYPEE DSC VENTURES LTD. 335 ITR 132 (DEL), CIT VS. KOSHIKA TELECOM LTD. 287 ITR 479 (DEL) AND EMPIRE PUMPS LTD. VS. ACIT 229 TA XMAN 379 (GUJ). WE NOTE THAT THE 4 ITA NO.133/KOL/2014 SHREE GOPAL CHOUDHARY, AY 2007-08 INTEREST OF RS.12,81,055/- WAS EARNED BY THE ASSESS EE FROM THE FDS MADE WITH BANK OF INDIA AND WE NOTE THAT THE FDS WERE PLEDGED AS SECURITY F OR OBTAINING FUNDED AND NON-FUNDED CREDIT FACILITIES FROM THE SAME BANK FOR MEETING AS SESSEES WORKING CAPITAL NEED FOR ASSESSEES TRADING BUSINESS. 7. WE ALSO NOTE THAT INCOME FROM THE ASSESSEES SAI D TRADING BUSINESS, THE ASSESSEE HAD PAID INTEREST OF RS.17,68,446/- ON THE WORKING CAPI TAL LOAN OBTAINED FROM THE SAID BANK. AS SUCH WE FIND THAT INTEREST RECEIPTS AND PAYMENTS WE RE TWO FACETS OF THE ASSESSEES TRANSACTION WITH BANK OF INDIA AND BOTH THE FACETS HAD DIRECT NEXUS OR CAUSE WITH ASSESSEES BUSINESS OF TRADING IN SANITARY WARE AND TILES. IN THE CIRCUMSTANCES, WE FIND THAT THE AO COULD NOT CONSIDER INTEREST RECEIVED ON FD IN ISOLA TION, DIVORCED FROM THE ASSESSEES BUSINESS ACTIVITY WHICH WAS CONDUCTED THROUGH THE S AME BANK I.E. BANK OF INDIA. WE NOTE IN THE CASE OF CIT VS. JAYPEE DSC VENTURES LTD., SU PRA, THE ASSESSEE IN THAT CASE HAD FURNISHED PERFORMANCE GUARANTEE IN FAVOUR OF NHAI T O OBTAIN THE TURNKEY CONTRACT. TO PROCURE THE SAID GUARANTEE, IT HAD KEPT CERTAIN AMO UNT IN FIXED DEPOSIT IN THE BANK. THE INTEREST INCOME EARNED FROM FD WAS TREATED AS BUSIN ESS INCOME AND, THEREFORE, SET OFF AGAINST THE PROJECT EXPENSES. IT WAS THE ASSESSEE S CASE THAT THE FURNISHING OF BANK GUARANTEE HAD A DIRECT NEXUS WITH THE CARRYING ON O F THE PROJECT AND, THEREFORE, THE FIXED DEPOSIT WAS INEXTRICABLY LINKED WITH THE BUSINESS A ND HENCE, THE INTEREST INCOME WAS RIGHTLY OFFERED TO TAX AS BUSINESS INCOME. THE AO, HOWEVE R, HELD THAT INTEREST RECEIVED BY THE COMPANY ON THE BANK DEPOSIT WAS TAXABLE AS INCOME U NDER THE HEAD INCOME FROM OTHER SOURCES. ON APPEAL, THE TRIBUNAL ALLOWED THE ASSE SSEES CLAIM. ON APPEAL BY THE REVENUE U/S. 260A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) , THE HONBLE HIGH COURT DISMISSED THE REVENUES APPEAL BY OBSERV ING AS UNDER: KEEPING IN VIEW THE AFORESAID PRONOUNCEMENTS IN T HE FIELD, THE PRESENT CONTROVERSY IS TO BE ADJUDGED. AS IS NOTICEABLE FROM THE STIPULATIONS IN THE AGREEMENT, THE PERFORMANCE GUARANTEE BY WAY OF BANK GUARANTEE WAS REQUIRED FOR FAITHFUL PERFORMANCE OF ITS OBLIGATIONS. THE NON- SUBMISSION OF THE GUARANTEE WOULD HAVE ENTAILED TER MINATION OF THE AGREEMENT AND NHAI WOULD HAVE BEEN AT LIBERTY TO APPROPRIATE THE BID S ECURITY. THAT APART, THE RELEASE OF SUCH PERFORMANCE SECURITY DEPENDED UPON CERTAIN CONDITIO NS. THUS, IT IS CLEARLY EVINCIBLE THAT THE BANK GUARANTEE WAS FURNISHED AS A CONDITION PRECEDE NT TO ENTERING INTO THE CONTRACT AND FURTHER IT WAS TO BE KEPT ALIVE TO FULFILL THE OBLI GATIONS. QUITE APART FROM THE ABOVE, THE RELEASE OF THE SAME WAS DEPENDENT ON THE SATISFACTION OF CE RTAIN CONDITIONS. THUS, THE PRESENT CASE IS NOT ONE WHERE THE ASSESSEE HAD MADE THE DEPOSIT OF SURPLUS MONEY LYING IDLE WITH IT IN ORDER TO EARN INTEREST; ON THE CONTRARY, THE AMOUNT OF INTER EST WAS EARNED FROM FIXED DEPOSITS WHICH 5 ITA NO.133/KOL/2014 SHREE GOPAL CHOUDHARY, AY 2007-08 WERE KEPT IN THE BANK FOR FURNISHING THE BANK GUARA NTEE. IT HAD AN INEXTRICABLE NEXUS WITH SECURING THE CONTRACT. THEREFORE, WE ARE DISPOSED T O THINK THAT THE FACTUAL MATRIX IS COVERED BY THE DECISIONS RENDERED IN BOKARO STEEL LTD (SUPRA), KARNAL CO-OPERATIVE SUGAR MILLS LTD. (SUPRA) AND KOSHIKA TELECOM LTD (SUPRA) AND, ACCORD INGLY, WE HOLD THAT THE VIEW EXPRESSED BY THE TRIBUNAL CANNOT BE FOUND FAULT WITH. 8. WE ALSO NOTE IN THE CASE OF EMPIRE PUMPS PVT. LT D. (SUPRA), THE ASSESSEE HAD PLEDGED FIXED DEPOSIT WITH THE FINANCIAL INSTITUTIO N UNDER THE MANDATORY TERMS AND CONDITIONS AS TO OBTAIN LETTER OF CREDIT, THE HONB LE GUJARAT HIGH COURT HAS OBSERVED AS UNDER: THUS, IT IS CLEAR THAT THE INCOME EARNED FROM FIXE D DEPOSIT PLACED FOR BUSINESS PURPOSE CANNOT BE TREATED AS INCOME FROM OTHER SOURCE BUT M UST BE SEEN AS PART OF THE ASSESSEE'S BUSINESS INCOME. IN THE PRESENT CASE ALSO THE ASSES SEE WAS COMPELLED TO PARK A PART OF ITS FUNDS IN FIXED DEPOSITS UNDER THE INSISTENCE OF THE FINANCIAL INSTITUTIONS AND THEREFORE THE INCOME RECEIVED THEREUPON CANNOT BE TERMED TO BE IN COME FROM OTHER SOURCES. FROM THE RATIO LAID DOWN IN THESE AFORESAID DECISIO NS, IT IS EVIDENT THAT WHEN IT WAS FOUND THAT THE FDS WITH BANKS WERE MADE WITH THE PRINCIPA L OBJECT OF OBTAINING CREDIT LIMITS FOR CONDUCTING ASSESSEE'S BUSINESS ACTIVITIES, INTEREST DERIVED THERE FROM WAS HELD TO BE ASSESSABLE UNDER THE HEAD 'PROFITS & GAINS OF BUSIN ESS' AND NOT 'OTHER SOURCES'. IN THE PRESENT CASE, THE FACTS ON RECORD DEMONSTRATE THAT THE FDS WERE MADE BY THE ASSESSEE FROM ASSESSEE'S ACCOUNT WITH BANK OF INDIA TO WHOM THE A SSESSEE HAD PAID INTEREST ON WORKING CAPITAL LOAN AND INTEREST WAS ALSO EARNED FROM THE FDS MADE WITH THE SAME BANK. IT IS ALSO EVIDENT THAT THE FDS WERE KEPT AS SECURITY OR MARGI N FOR AVAILING FUNDED & NON-FUNDED CREDIT FACILITIES UTILIZED IN ASSESSEE'S BUSINESS A ND, THEREFORE, WE UPHOLD THE CONTENTION OF THE ASSESSEE THAT THE INTEREST INCOME COULD NOT BE CONS IDERED IN ISOLATION. THEREFORE, WE ARE OF THE VIEW THAT THE INTEREST RECEIVED WERE REQUIRED T O BE CONSIDERED UNDER THE HEAD 'PROFITS & GAINS OF BUSINESS' AND, THEREFORE, THE INTEREST INC OME OF RS.12,81,055/- DERIVED FROM THE FIXED DEPOSIT WITH THE BANK OF INDIA, WE HOLD THAT IT WAS IN THE NATURE OF BUSINESS RECEIPT AND HENCE LIABLE TO BE TAXED UNDER THE HEAD 'PROFIT S AND GAINS OF BUSINESS' AND, THEREFORE, ENTITLED TO BE NETTED OFF AGAINST INTEREST EXPENDIT URE. 9. COMING TO THE INTEREST COMPONENT OF RS.12,26,468 /- EARNED FROM LOANS AND ADVANCES GIVEN TO FOUR PARTIES, WE NOTE THAT THE ASSESSEE IN HIS INDIVIDUAL CAPACITY WAS ENGAGED IN ORGANIZING MONEY LENDING ACTIVITY IN THE PAST YEARS AND CONTINUED THE SAME IN SUBSEQUENT 6 ITA NO.133/KOL/2014 SHREE GOPAL CHOUDHARY, AY 2007-08 YEARS AS WELL. THE LD. AR DREW OUR ATTENTION TO THE COPIES OF THE BALANCE SHEET AND P&L ACCOUNT ALONG WITH THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT FOR EARLIER ASSESSMENT YEARS 2005-06 AND 2006-07 AS WELL AS SUB SEQUENT ASSESSMENT YEARS 2007-08 AND 2009-10 TO SHOW THAT THE INTEREST INCOME DERIVED BY THE ASSESSEE FROM MONEY LENDING ACTIVITY HAS BEEN CONSISTENTLY ASSESSED BY THE AO U NDER THE HEAD BUSINESS INCOME . THE LD. AR INVITED OUR ATTENTION TO THE DETAILS OF THE SPECIFIC BORROWERS AND PARTIES TO WHOM SUMS WERE ADVANCED AND FROM WHOM INTEREST INCOME WA S EARNED IN EARLIER AS WELL AS IN SUBSEQUENT YEARS AND WE NOTE THAT THE BORROWERS/PAR TIES IN QUESTION IN THE RELEVANT ASSESSMENT YEAR WERE THE SAME IN THE EARLIER AS WEL L AS IN THE SUBSEQUENT YEARS. THEREFORE, THE CONTENTION OF THE ASSESSEE IS THAT THERE WAS NO NECESSITY FOR THE AO TO TAKE A DIFFERENT VIEW AND THUS BREAKING THE RULE OF CONSISTENCY WHEN THE FACTUAL MATTERS PERMEATING IN THE EARLIER ASSESSMENT YEARS AND SUBSEQUENT ASSESSMENT YEARS ARE THE SAME, AND THEREFORE, ACCORDING TO LD. AR, THE AO OUGHT NOT TO HAVE TAKEN A DIFFERENT VIEW WITHOUT CHANGE IN FACTS AND IN LAW. FOR THE SAID PROPOSITION OF LAW, THE LD. AR RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN RADHASOAMI SATSANG VS. CIT 193 ITR 321 (SC). WE NOTE THAT THE ASSESSEE HAS BEEN CONTINUOUSLY CONDUCTING THE A CTIVITY OF MONEY LENDING IN A VERY ORGANIZED MANNER FROM YEAR TO YEAR. THE ASSESSEE I S CHARGING COMMERCIAL RATE OF INTEREST AND THE ACTIVITY OF MONEY LENDING POSSESS ALL THE C HARACTERISTICS OF ADVENTURE IN THE NATURE OF TRADE OR COMMERCE. FROM THE DETAILS FURNISHED IT I S CLEARLY EVIDENT THAT THE ACTIVITY OF MONEY LENDING WAS CONDUCTED BY THE ASSESSEE IN THE PAST AS WELL AS IN THE SUBSEQUENT ASSESSMENT YEARS. 10. WE ALSO FIND THAT THE ASSESSEE HAD GRANTED LOAN S TO THE SAME SET OF PARTIES IN THE PRECEDING AS WELL AS IN THE SUBSEQUENT YEARS. IN TH E PRECEDING YEARS WHEN THE MONIES WERE LENT, AND IN THE SCRUTINY ASSESSMENT, THE AO HAD AC CEPTED THE ASSESSEES CONTENTION THAT ASSESSEE WAS ENGAGED IN MONEY LENDING BUSINESS AND ACCORDINGLY, INCOME HAS BEEN ASSESSED UNDER THE HEAD PROFITS & GAINS OF BUSINES S. EVEN WE NOTE IN THE SUBSEQUENT ASSESSMENT YEAR ALSO, THE INTEREST DERIVED FROM MON EY ADVANCED TO PRIVATE PARTIES HAS BEEN ASSESSED UNDER THE HEAD 'BUSINESS' AND NOT FROM 'OT HER SOURCES'. ON THESE FACTS, THEREFORE, WE FIND THAT ON THE SAME SET OF FACTS, THE AO HAS D RAWN DIFFERENT LEGAL INFERENCES ONLY IN THIS AY 2007-08 WHICH HE SHOULD NOT HAVE DONE. THE HON'BLE SUPREME COURT IN THE CASE OF 7 ITA NO.133/KOL/2014 SHREE GOPAL CHOUDHARY, AY 2007-08 RADHASOAMI SATSANG (SUPRA) AND CIT VS EXCEL INDUSTR IES LTD 358 ITR 295 HAS HELD THAT IF THE FUNDAMENTAL ASPECT PERMEATED THROUGH DIFFERENT ASSESSMENT YEARS IS SAME, THEN THE AO CANNOT TAKE CONTRARY STAND. THE HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF MANMOHAN KEDIA VS. ITO 370 ITR 649 HAS EXPLAINED THE UNDERLY ING JUDICIAL PRINCIPLE IN HOLDING SO BY STATING THAT AT ONE POINT OF TIME LITIGATION MUST C OME TO AN END. WE NOTE THAT THE AO HAS NOT BROUGHT ON RECORD ANY CHANGE IN FACTS FROM EARLIER YEARS OR CHANGE IN LAW TO TAKE A DIFFERENT VIEW FROM HIS PREDECESSORS. WE NOTE THAT IN SUBSEQ UENT YEARS, THE AO HAS ASSESSED INTEREST INCOME UNDER THE HEAD BUSINESS. IN VIEW OF THE F OREGOING WE HOLD THAT THE INTEREST INCOME OF RS.12,26,488/- DERIVED BY THE ASSESSEE FR OM LENDING MONEY TO FOUR PRIVATE PARTIES TO BE TREATED AS INCOME FROM BUSINESS AND, THEREF ORE, THE AO SHALL RE COMPUTE THE ASSESSEE TOTAL INCOME AFTER ALLOWING SET OFF FOR BR OUGHT FORWARD BUSINESS LOSS AGAINST THE INTEREST INCOME. THUS,WE ALLOW THE APPEAL OF THE AS SESSEE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13TH SE PTEMBER, 2017 SD/- SD/- (J. SUDHAKAR REDDY) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13TH SEPTEMBER, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHREE GOPAL CHOUDHARY, 16F, JUDGES COUR T ROAD, KOLKATA- 700 027. 2 RESPONDENT ACIT (IT), CIRCLE-29, KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECRETARY