TMI Blog2005 (1) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the facts emerging from statement of facts. Though the issue before the Supreme Court in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. v. [ 1997 (7) TMI 4 - SUPREME COURT] was slightly different, yet some of the observations made by the Supreme Court while deciding, the said case cannot be ignored by this court as being even obiter. Since even the obiter of the Supreme Court is binding on us, we are inclined to rely upon the said observations of the Supreme Court for answering the question regarding income earned out of interest against an assessee. Thus, we cannot hold that interest earned by an assessee is their business income. In the first place, it is not their main or ancillary business. Secondly, no memorandum of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court was delivered by A. M. SAPRE J.- This is an income-tax reference made at the instance of the assessee under section 256(1) of the Income-tax Act, 1961 in RA. Nos. 48, 49 and 50/Ind./97 which arise out of I. T. A. Nos. 902 and 221/Ind./95 and 570/Ind./94 decided by the Tribunal on March 11, 1997, to answer the following questions of law: "1. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount of sale proceeds of empty bags and containers, drums etc. and interest on F.D. has no nexus for calculation of profit of the assessee's business at the estimated rate of net profit adopted for the purpose? 2. Whether the Tribunal was justified in confirming the order of the authorities below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxed as income from other sources. The view taken by the Assessing Officer was upset by the Commissioner of Income-tax (Appeals) when he held that it is a business income. However, in an appeal filed by the Revenue, the Tribunal reversed the view of the Commissioner of Income-tax (Appeals) and restored that of the Assessing Officer. In other words, the Tribunal was of the view that it is an income from other sources. It is against this view, the assessee prayed for the reference to this court. This request having been acceded to the Tribunal made the reference to this court to answer the aforementioned questions. Heard Shri S. C. Bagadia, learned senior counsel with Shri D. K. Chhabra, learned counsel for the assessee and Shri R. L. Jain, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder to earn interest. Such interest will be chargeable under section 56 of the Act." In view of the aforesaid observations which are subtle in their expression, we cannot hold that interest earned by an assessee is their business income. In the first place, it is not their main or ancillary business. Secondly, no memorandum of association is filed or relied upon to show that t0e assessee in addition to its main business of civil construction, etc., are also engaged in some kind of money-lending or deposit business with their surplus funds. We cannot ignore the pointed observations and/or findings of the Supreme Court quoted supra on the ground that it was made in altogether different context and, hence, the same is liable to be ignored. On ..... X X X X Extracts X X X X X X X X Extracts X X X X
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