POWAI LAB TECHNOLOGY PVT.LTD., MUMBAI V. ITO-10(3)(4), MUMBAI

ITA 3352/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7640 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 27-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BRIJMOHAN P AGARWAL
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.3352/MUM/2011 (ASSESSMENT YEAR: 2008-09) M/S. POWAI LABS TECHNOLOGY PVT. LTD., 104C MARWAH COMPLEX, OFF SAKI VIHAR ROAD, ANDHERI EAST, MUMBAI -400 072 ...... APPELLANT VS INCOME TAX OFFICER- WARD 10(3)(4), ROOM NO.452, 4TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI -400 020 ..... RESPONDENT PAN: AADCP 1640 D APPELLANT-ASSESSEE BY: SHRI BRIJMOHAN P. AGARWAL RESPONDENT-REVENUE BY: SHRI ATIQ AHMAD DATE OF HEARING: 22.02.2012 DATE OF PRONOUNCEMENT: 28.03.2012 O R D E R PER R.S. PADVEKAR, JM : IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT (A)-22, MUMBAI DATED 09.02.2011 FOR THE A.Y. 2008-09. THE ONLY SOLITARY ISSUE RAISED IN THIS APPEAL IS AS SESSMENT OF INTEREST INCOME OF RS. 11,21,361/- AS INCOME FROM OTHER SOURCES. 2. BRIEFLY STATED THE FACTS ARE AS UNDER. THE ASSE SSEE COMPANY IS ENGAGED IN THE BUSINESS OF ELECTRONICS DESIGN AUTOM ATION. IN THE PROFIT AND LOSS ACCOUNT THE ASSESSEE HAS CREDITED I NTEREST INCOME OF RS. 11,21,361/-. THE A.O. ASSESSED THE SAID INCOME AS INCOME FROM OTHER SOURCES IN RESPECT OF BUSINESS INCOME AS CLA IMED BY THE ASSESSEE. THE ASSESSEE CHALLENGED THE ACTION OF TH E A.O. BEFORE THE LD. CIT (A) BUT WITHOUT SUCCESS AS THE LD. CIT (A) HAS CONFIRMED THE ITA 3352/M/2011 M/S. POWAI LABS TECHNOLOGY PVT. LTD. 2 ACTION OF THE A.O. TREATING THE INTEREST INCOME UND ER THE HEAD INCOME FROM OTHER SOURCES. NOW, THE ASSESSEE IS IN APPEA L BEFORE US. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORDS. THE LD. COUNSEL SUBMITS THAT THE LOAN WAS OBTAINED FROM TECHNOLOGY DEVELOPMENT BOARD AND PENDING ITS U TILISATION THE SAME WAS INVESTED IN THE FIXED DEPOSIT AND INTEREST WAS OBTAINED. HE, THEREFORE, PLEADED THAT TEMPORARY PARTING OF THE AM OUNT OF THE LOAN RECEIVED AND INTEREST EARNED THEREON HAS TO BE TREA TED AS INCOME FROM BUSINESS. WE FIND THAT THIS FACTUAL POSITION HAS NOT BEEN DISPUTED ANYWHERE BY THE LD. CIT (A) THOUGH THE A.O. HAS NOT MENTION ANY THING ON THE SOURCE OF THE INVESTMENT. IN OUR OPIN ION, TEMPORARY PARKING OF THE BORROWED AMOUNT OF THE LOAN ON WHICH THE INTEREST IS EARNED, THE SAID INTEREST CANNOT BE TREATED AS INC OME FROM OTHER SOURCES. AS PER FACT ON RECORD, THE ASSESSEE HAS OBTAINED THE LOAN FROM TECHNOLOGY DEVELOPMENT BOARD (TDB) CONSTITUTED UNDER THE TECHNOLOGY DEVELOPMENT BOARD ACT, 1995 AND AS THE A MOUNT WAS NOT UTILISED THE SAME WAS TEMPORARILY PARKED AND INTERE ST WAS EARNED. IN OUR OPINION, BOTH THE AUTHORITIES BELOW HAVE ERRED IN NOT TREATING THE INTEREST EARNED ON THE TEMPORARY PARKING OF THE LOA N AMOUNT AS A BUSINESS INCOME. ACCORDINGLY, WE ALLOW THE GROUND TAKEN BY THE ASSESSEE AND DIRECT THE A.O. TO TREAT THE INTEREST INCOME AS BUSINESS INCOME OF THE ASSESSEE. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 8TH MARCH, 2012. SD/- (J. SUDHAKAR REDDY) ACCOUTANT MEMBER SD/- (R.S. PADVEKAR) JUDICIAL MEMBER MUMBAI, DATE: 28TH MARCH, 2012 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. ITA 3352/M/2011 M/S. POWAI LABS TECHNOLOGY PVT. LTD. 3 3) THE CIT (A)-22, MUMBAI. 4) THE CIT -10, MUMBAI. 5) THE D.R. C BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN