IN THE ITAT, MUMBAI BENCH
SHAMIM YAHYA, A.M. & RAVISH SOOD, J.M.
Irene Edwyn D'mello v. ITO
I.T.A. No. 3919/Mum/2018
11 December, 2020
Appellant by: Pramod Kumar Parida
Respondent by: Uodal Raj Singh
Shamim Yahya, A.M.
This appeal by the assessee is directed against the order of the learned Commissioner (Appeals)-25, Mumbai ('ld. CIT(A)' for short) dated 13-4-2018 and pertains to the assessment year (A.Y.) 2013-14.
2. The grounds of appeal read as under :--
1. Addition of business interest income under section 56 as against declared under section 28 and not allowing netting off of interest -- Rs. 60,51,743
(i) The learned Commissioner (Appeals) erred in not treating the interest earned, on fixed deposit out of business funds kept as security/margin money for availing O/D facility, as business income under section 28 with failure to appreciate the business nexus vis-a-vis utilization of business funds and further erred in not allowing the netting-off of interest which had all the elements of mutuality towards the common business; therefore, the addition of interest under section 56 is uncalled for and the same may resultantly be treated as income under section 28 and netting-off may consequently be allowed.
(ii) Without prejudice to the above, maintaining F/D which was purely out of business funds for being a mandatory requirement to avail O/D facility was neither out of surplus funds nor idle funds nor any non-business fund but only out of business exigency; therefore, the action for addition under section 56 lacks merits and the order impugned may be vacated.