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2014 (10) TMI 1054 - ITAT BANGALOREIncome from other sources - Interest earned by the assessee on funds temporarily parked - rejecting the claim of the assessee that interest income is not chargeable to tax at all - HELD THAT:- We are also of the view that the decision in the case of KUIDFC [2006 (2) TMI 114 - KARNATAKA HIGH COURT] will be squarely applicable to the facts of the present case wherein answered the question Interest earned by Governmental nodal agency set up for development activities on funds provided by Central Government but parked in banks for the period of non-utilisation is income chargeable to tax in negative. CIT(A) has not followed the aforesaid decision on the basis that KUIDFC was engaged in welfare activities to transform Bangalore to a mega city, whereas the assessee was engaged in trading of agricultural produce. In our view, this distinction sought to be made out by the CIT(A) cannot be accepted. The assessee as well as KUIDFC are engaged in welfare activity wholly owned by State Government. KUIDFC is also a company. The assessee is also engaged in welfare activity and formed for the purpose of helping the agricultural produce and procession of export. Therefore the ratio laid down by the Hon’ble Karnataka High Court in the case of KUIDFC (supra) will clearly apply to the facts of the present case also. The fact that the Assessee would charge commuters for use of metro rail service which is an infrastructure to be created by the Assessee cannot be the basis not to follow the decision in the case of KUIDFC (supra). KUIDFC would also charge fee for use of infrastructure facility that it creates from the end users. CIT(A) would call this a nominal fee and distinguish the fare charged by a commuter of metro rail. We are of the view that the distinction sought to be made out by the CIT(A) from the case of KUIDFC (supra) and the Assessee’s case in our view cannot be sustained - we hold that the interest income in question cannot be brought to tax as income of the assessee - Decided in favour of assessee.
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