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2014 (7) TMI 211 - AT - Income TaxIncome on account of interest treated as income from other sources – Disallowance of remuneration to partners from interest income - Held that:- Both the interest paid and earned arising from a common pool of funds - where there are earmarked funds, yielding interest income, even though it is open in such a case to be argued that such funds form part of the business funds, dedicated to meet some defined business purpose, while the interest income is only incidental - the interest income, which acquires its character from the surrounding circumstances - Relying upon CIT vs. Govinda Choudhury & Sons [1992 (4) TMI 8 - SUPREME Court] - ‘income from other sources’ is hardly tenable on the basis of the facts on record - it is even not possible to say conclusively if any interest income has at all been earned, except perhaps for the interest realized at rate/s in excess of that at which the moneys are borrowed – Decided in favour of Assessee.
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