Case Law Details
The Bombay Oil Private Limited Vs. DCIT (ITAT Mumbai)
We notice that the assessee has been earning income of identical nature in the past and the assessing officer has assessed the same under the head Income from business. Even though the principle of resjudicata is not applicable to the income tax proceedings, yet we notice that the tax authorities have not given any reason as to why the decision taken on identical issue in the earlier years should not be followed. Hence we are of the view that the Ld A.R was justified in contending that the principle of consistency should be followed in the year under consideration. The deposits made with the banks and corporate, in our view, can be considered as part of business activities of the assessee as it is engaged in the business of investing in financial instruments.
Further mere rejection of the application for securing NBFC status would not render the assessee business less and the income derived by the assessee would not lose business character. In this regard, he placed reliance on the decision rendered by the co-ordinate bench in the case of Preimus Investment and Finance Ltd (ITA No. 4879/Mum/2012 dated 13- 05-2015), wherein the Tribunal has expressed the view that the denial of registration by RBI as NBFC does not decide the issue of carrying on business.
Full Text of the ITAT Order is as follows:-
The appeal of the assessee is directed against the order dated 20-08- 2014 passed by Ld CIT(A)-20, Mumbai and it relates to the assessment year 2010-11. The assessee is aggrieved by the decision of Ld CIT(A) in upholding the assessment of interest receipts under the head Income from other sources as against the claim of the assessee to assess the same under the head Income from business. The assessee is also aggrieved by the decision of Ld CIT(A) in confirming dis allowance of various expenses claimed by the assessee.
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