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2015 (10) TMI 2701 - AT - Income TaxRevision u/s 263 - whether the interest earned from fixed deposit was to be assessed under the head “Income from other sources “ or as “Business Income” - Held that:- CIT in his order dated 19th March 2013 passed u/s 263 of the Act has held that the issue is not free from doubt that the income earned by the assessee company from fixed deposits kept with the banks could be assessed as ‘Income from other sources’ and the AO to re-decide the issue as to whether the interest income earned from fixed deposit with bank is to be assessed under the head ‘Income from other sources’ or as ‘Business income’ clearly reveals that the CIT instead of giving final finding on this issue observed that the income earned by the assessee company from the fixed deposit with bank could be assessed as ‘Income from other sources’ as matter is not free from doubt itself shows that there is no finding or adjudication by the CIT and his observations are based on mere suspicion and are uncertain . Yet a direction was issued to the AO to carry out fresh inquiries to do the exercise once again and decipher whether income earned from fixed deposit with bank by the assessee company could be assessed under the head ‘Income from other sources’ , thus CIT was unsure whether the treatment meted out by the assessee company in treating the said income from interest on FDR with bank as ‘Income from Business’ is right or wrong which does not show that the finding as arrived at by the AO is erroneous and hence the order of CIT does not meet the requirement of Section 263 of the Act. Our view is fortified by the judgment of Hon’ble Delhi High Court of Globus Infocom Ltd. v. CIT (2014 (9) TMI 18 - DELHI HIGH COURT) and also CIT v. Gabriel India Limited (1993 (4) TMI 55 - BOMBAY High Court) Thus set aside to the file of the AO to re-decide the issue as to whether the interest income earned from fixed deposit with bank is to be assessed under the head ‘Income from other sources’ or as ‘Business income’ is unsustainable in law and is set aside and the assessment order of the AO dated 08th October 2010 passed u/s 143(3) of the Act is restored . We order accordingly.
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