Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business income - Chargeable as - Assessment year 2004-05 Where Tribunal had held that interest income earned by assessee, engaged in sale and purchase of units of mutual funds was business income by recording a finding of fact that assessee-respondent had business of sale and purchase of units of mutual funds and money-lending which was carried out as an organised activity over a period of time, in view of such finding of fact, Assessing Officer was not justified in treating interest income as income from other sources [In favour of assessee] The assessee was engaged in the business of sale and purchase of units of mutual funds and money-lending business. It had filed its return of income in respect of the assessment year 2004-05 declaring nil income after adjusting brought-forward business losses. The assessee-respondent had also shown a net loss from sale and purchase of units of mutual funds. The assessee had also claimed the following 'interest income' as 'business income' i.e. , interest on income-tax refunds; interest from parties; interest on FDRs. In this regard, the Assessing Officer had opined that the above interest income was assessable under the head 'Income from other sources' instead of 'business income' shown by the assessee-respondent. Therefore, the brought forward business loss claimed could not be allowed to be adjusted from the said 'interest income'. Held that, the Tribunal held that interest income earned by the assessee engaged in sale and purchase of mutual funds was business income by recording a finding of fact that the assessee-respondent had the business of sale and purchase of units of mutual funds and money-lending which was carried out as an organised activity over a period of time. The argument of the revenue that the interest income fell under section 56(2) and was assessable under the head 'Income from other sources' had been rejected on the ground that the income assessable under the head 'Income from other sources' was of the nature which was otherwise not found to be assessable under any other heads of income. In view of the aforesaid factual finding, no substantial question of…

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