SHIRAZ DEVELOPERS P. LTD, MUMBAI V. ITO 8(3)-1, MUMBAI

ITA 4255/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56010 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 02-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 25-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P C MOURYA
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G,MUMBAI BEFORE SHRI J. SUDHAKAR REDDY (AM) & SHRI V. DURG A RAO (JM) I.T.A.NO.4255/MUM/2010 (A.Y.2007-08) M/S. SHIRAZ DEVELOPERS PVT. LTD., SHOP NOS.1 & 2, UNIQUE APARTMENTS, S.V. ROAD, IRLA, VILE PARLE (W), MUMBAI-400 056. PAN: AAACS5310G. VS. INCOME-TAX OFFICER-8(3)(1), MUMBAI. APPELLANT RESPONDENT APPELLANT BY NONE. RESPONDENT BY SHRI P .C.MOURYA. DATE OF HEARING 02-11-2011 DATE OF PRONOUNCEMENT 18-11-2011 O R D E R PER V. DURGA RAO, JM : THE SOLE ISSUE INVOLVED IN THIS APPEAL BY THE ASSES SEE IS WHETHER INTEREST INCOME HAS TO BE TREATED AS BUSINESS INCOME OR I NCOME FROM OTHER SOURCES. 2. AT THE TIME OF HEARING BEFORE US, NOBODY HAS PUT IN APPEARANCE ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION SEEKING ADJOURN MENT HAS BEEN MOVED. WE ARE, THEREFORE, PROCEEDING TO DISPOSE OF THE APPEAL EX PARTE AFTER HEARING THE LD. D.R. 3. AT THE TIME OF HEARING, IT WAS BROUGHT TO OUR NO TICE BY THE LD. D.R. THAT THE ISSUE INVOLVED IN THIS APPEAL IS SIMILAR TO THE ONE RAISED IN ASSESSMENT YEAR ITA NO.4255/MUM/2010 SHIRAZ DEVELOPERS P.LTD. 2 2005-06 AND THE TRIBUNAL, VIDE ORDER DATED 29-04-20 11 IN ITA NO.1084/MUM/2010, HAS CONSIDERED THE ENTIRE ISSUE A ND HELD AS UNDER : 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD. AS FAR AS THE INTEREST ON FIXED DEPOSITS WI TH THE BANK IS CONCERNED, WE FIND THAT THIS WAS SURPLUS FUND OF THE ASSESSEE DEPOSITED WITH THE BANK FOR A CONSIDERABLE PERIOD OF MORE THAN ONE YEAR. THEREFORE, IT CANNOT BE TREATED AS TEMPORARY DEPOSITS BY THE ASSESSEE IN THE BANK FOR UTILIZATION IN THE BUSINESS. IT IS CLEAR CASE OF SU RPLUS FUND. THEREFORE, INTEREST EARNED BY THE ASSESSEE, CANNOT BE CONSIDERED AS BUSINESS INCOME. THIS IS ALSO NOT A C ASE WHEN THE ASSESSEE WAS REQUIRED TO MAKE FIXED DEPOSITS FO R AVAILING CERTAIN FACILITIES FOR THE BUSINESS OF THE ASSESSEE . ACCORDINGLY, IN VIEW OF THE DECISION OF THE HON. DE LHI HIGH COURT IN THE CASE OF CIT V/S JYOTI APPARELS THE INT EREST RECEIVED ON THE FIXED DEPOSITS CANNOT BE TREATED AS BUSINESS INCOME. MOREOVER, IT IS TO BE NOTED THAT WHEN THE A SSESSEE HAS DEPOSITED THE AMOUNT IN THE FIXED DEPOSITS AS I T WAS A SURPLUS FUNDS THEN THE SAID DEPOSITS WAS NOT IN TH E ORDINARY COURSE OF BUSINESS OF THE ASSESSEE AND THEREFORE CA NNOT BE PART OF THE BUSINESS ACTIVITIES. THE INTEREST INCOM E GENERATED ON THE SAID DEPOSITS WILL NOT PARTAKE THE CHARACTER OF BUSINESS INCOME. THEREFORE, IN OUR VIEW THE INTERES T RECEIVED ON THE BANK DEPOSITS IS INCOME FROM OTHER SOURCES. 9. AS REGARDS THE INTEREST ON LOAN, WHEN THE ASSESS EE IS NOT IN THE BUSINESS OF MONEY LENDING AND ADVANCING THE MONEY THEN THE INTEREST ON LOAN NOT GIVEN FOR THE P URPOSE OF BUSINESS CANNOT BE TREATED AS BUSINESS INCOME OF TH E ASSESSEE. SIMILARLY, THE INTEREST ON INCOME-TAX REF UND ALSO HAS NO NEXUS WITH THE BUSINESS OF THE ASSESSEE AND THE SAME IS ALSO TO BE ASSESSED AS INCOME FROM OTHER SO URCES. THE DECISION RELIED UPON BY THE LEARNED AR ARE NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. ACCORDINGLY, WE DO NOT FIND ANY ERROR IN THE FINDIN GS OF THE CIT(A). RESPECTFULLY FOLLOWING THE RATIO OF THE TRIBUNAL DE CISION IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06, WE DISMISS THIS G ROUND RAISED BY THE ASSESSEE. 4. IN THE RESULT, THE ASSESSEES APPEAL STANDS DISM ISSED. ITA NO.4255/MUM/2010 SHIRAZ DEVELOPERS P.LTD. 3 ORDER PRONOUNCED ON THE 18 TH DAY OF NOVEMBER, 2011. SD/- SD/- (J. SUDHAKAR REDDY) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 18 TH NOVEMBER , 2011. NG: COPY TO : 1.ASSESSEE. 2.DEPARTMENT. 3 CIT(A)-18,MUMBAI. 4 CIT-8,MUMBAI. 5.DR,G BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI.