Commissioner of Income Tax vs Krishan Kumar Aggarwal

This appeal was admitted on 11-1-2005 and the following substantial question of law was framed:

Whether the Income Tax Appellate Tribunal was correct in law in holding that assessee is entitled to reduce interest paid by it from the interest received by it, while calculating deduction u/s 80HHC(4A) read with Explanation (baa) of the Income Tax Act, 1961?

Although the appellant had, in its Memorandum of Appeal, raised the question whether interest from deposits could be treated as business income and not ''Income from other sources'', this court did not admit the appeal on that question.

In our judgment dated 12-1-2007 in CIT v. Shri Ram Honda Power Equipment (2007) 289 ITR 4751 (Del), we had in paragraphs 21 and 22, stated that where the assessing officer has held that the interest income is business income and "this has not been reopened or questioned thereafter by the department or where this court has not formulated such a question while admitting the appeal", such question of law will not be permitted to be reopened. In the instant case, the assessing officer has held income to be business income. The only question thereafter that was urged by the appellant before the Income Tax Appellate Tribunal (ITAT) pertained to the netting of interest. In the impugned order dated 30-6-2004, the Income Tax Appellate Tribunal has, in paragraph 5, recorded that the "finding of nexus has not been assailed by the Departmental Representative."

In that view of the matter no interference is called for with the impugned order of the Income Tax Appellate Tribunal and the appeal is accordingly dismissed.