MOHMEDI MECHANICS WORKS, MUMBAI V. ITO WD 17(30(3), MUMBAI

ITA 2922/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3762 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 09-04-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 13-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: KUNAL DEEPAK PARIKH

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA N O . 2922 / MUM/ 20 1 1 ( ASSESSMENT YEAR : 2 00 6 - 0 7 ) M/S MOHMEDI MECHANICS WORKS, 186, RIPON ROAD, MADANPURA, POST OFFICE BUILDING, MUMBAI - 400 008 VS. ITO 17(3)(3), MUMBAI PAN/GIR NO. : AAGFM 1959 E ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI KUNAL DEEPAK PARIKH /REVENUE BY : SHRI PAWAN VED DATE OF HEARING : 8 TH MAY , 201 3 DATE OF PRONOUNCEMENT : 15 TH MAY , 201 3 O R D E R TH IS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LEANED CIT(A) - 29 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 6 - 0 7 . 2 . THE ASSESSEE IN ITS APPEAL RAISES OBJECTION IN REGARD TO TREATING THE INTEREST INCOME OF RS. 4,87, 403/ - EARNED BY THE ASSESSEE OF CAPITAL BONDS AS INCOME FROM OTHER SOURCES INSTEAD OF INCOME FROM BUSINESS SHOWN BY THE ASSESSEE. 3 . THE AO NOTICED THAT THE ASSESSEE WAS A MANUFACTURER OF RAILWAY PURJA AND ITS ACCESSORIES. THE AO FOUND THAT THE ASSESSEE HAS SOLD OUT ITS FACTORY PREMISES DURING FINANCIAL YEAR 2004 - 05 AND THERE WAS NO OTHER BUSINESS ACTIVITY CARRIED OUT DURING THE YEAR UNDER ITA NO. 2922 /20 11 2 CONSIDERATION. THE AO NOTICED THAT THE ASSESSEE HAS EARNED CERTAIN INTEREST INCOME ON ACCOUNT OF NABARD CAPITAL GAIN BONDS OF RS. 4,87,403/ - , WHICH WAS TREATED BY THE AO AS INCOME FROM OTHER SOURCES. IN APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE AO IN TREATING THE INTEREST INCOME AS INCOME FROM OTHER SOURCES AS THERE WAS NO BUSINESS ACTIVITY CARRIED OUT BY THE FIRM A ND THE INTERE ST INCOME IS ASSESSABLE AS INCOME FROM OTHER SOURCES. ACCORDINGLY, HE CONFIRMED THE ACTION OF THE AO, HOWEVER, THE INTEREST PAID TO THE PARTNERS OF RS. 4,53,994/ - WAS ALLOWED AS DEDUCTION UNDER SECTION 57(III) OF THE ACT. 4 . NOW, THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 5 . AFTER CONSIDERING THE SUBMISSION, I FOUND NO INFIRMITY IN THE FINDING OF THE LEARNED CIT(A) IN TREATING THE INTEREST INCOME AS INCOME FROM OTHER SOURCES AS THERE WAS NO BUSINESS ACTIVITY CARRIED OUT BY THE FIRM DURING THE YEAR UNDER CONSIDERATION. THE INTEREST INCOME IS ASSESSABLE UNDER THE HEAD INTEREST INCOME, IF THERE IS NO BUSINESS ACTIVITY AND THERE IS NO NEXUS WITH THE EARNING OF INTEREST AND BUSINESS OF THE ASSESSEE. ACCORDINGLY, I CONFIRM THE ORDER OF THE LEARNED CIT(A ) IN THIS RESPECT. LEARNED CIT(A) HAS ALREADY ALLOWED THE DEDUCTION ON ACCOUNT OF INTEREST PAID UNDER SECTION 57(III) OF THE ACT, THEREFORE, THERE SHOULD NOT BE ANY GRIEVANCE TO THE ASSESSEE. ACCORDINGLY, I CONFIRM THE ORDER OF THE CIT(A). 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMI S SED . ITA NO. 2922 /20 11 3 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH D AY OF MAY 2013 201 3 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 15 /05 /2013 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELL ANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI