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2015 (1) TMI 108 - GUJARAT HIGH COURTTaxability of interest - Income from other sources or not - Whether the Tribunal is right in holding interest of ₹ 9,86,430/arising out of mandatory precondition deposit towards supply of raw material is taxable as "income from other sources" – Held that:- Following the decision in EMPIRE PUMPS PVT. LTD. Versus ACIT [2014 (11) TMI 563 - GUJARAT HIGH COURT] wherein the judgment of SC in Commissioner of Income-Tax Versus Karnal Co-operative Sugar Mills Ltd. [1999 (4) TMI 7 - SUPREME Court] is discussed and held that the assessee had deposited money to open a letter of credit for the purchase of the machinery required for setting up its plant in terms of the assessees agreement with the supplier - It was on the money so deposited that some interest has been earned - This is, therefore, not a case where any surplus share capital money which is lying idle has been deposited in the bank for the purpose of earning interest – thus, the income received thereupon cannot be termed to be income from other sources – Decided in favour of assessee.
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