COMMISSIONER OF INCOME TAX I Vs. RAMESH GUPTA

JUDGEMENT

(1.) THIS appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 31.7.2008 Annexure A. III passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh in ITA No. 503/Chandi/2008, for the assessment year 2004 -05, claiming following substantial questions of law: - -

(2.) A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The assessee is an individual. He filed his return of income on 18.10.2004 declaring income of Rs. 3,94,636/ -. Assessment was finalized under section 143(3) of the Act on 29.9.2006 at a total income ofRs. 21,68,094/ -. The income from interest was assessed by the Assessing Officer under the head income from other sources and brought forward business losses were not allowed to be set off against this income. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 28.3.2008, Annexure A. II, the Assessing officer treated the interest income as income from business and also allowed the set off of the brought forward losses amounting to Rs. 17,50,833/ -. The revenue went in appeal before the Tribunal. Vide order dated 31.7.2008, Annexure A. III, the Tribunal dismissed the appeal. Hence the instant appeal by the revenue.

(3.) THE Assessing officer treated the income earned by the assessee from money lending business as income from other sources. The CIT(A) reversed the said finding and held that the income of the assessee fell under the head 'Income from business or profession'. The CIT(A) noticed that in the assessment order passed by the Assessing Officer for the subsequent assessment year 2005 -06, the Assessing Officer himself had recorded that during the assessment year 2004 -05, the assessee had earned income of Rs. 18,18,134/ - from money lending business. The relevant findings read thus: - -