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2017 (12) TMI 1631 - AT - Income TaxInterest income received on FDRs - whether fixed deposits as purchased on account of business exigencies, therefore the same may be treated as business income? - Held that:- Wherever the FDRs are purchased on account of business exigencies, the interest generated thereon would be business income and not income from other sources. But in the instant case, it is not borne out from the orders of lower authorities whether all FDRs are purchased for business exigencies or not. Therefore, we restore the matter to the file of the AO to examine the nature of FDRs and its purpose and to give a specific finding whether the FDRs were purchased for business purposes or not. If it is purchased for business purposes, the interest income earned thereon shall be treated as business income and not income from other sources in the light of aforesaid judgments of jurisdictional High Court. MAT applicability - applicability of provisions of section 115JB to the assessee as engaged in the business of generation of power - Held that:- Since it has been repeatedly held by the different Benches of the Tribunal and Hon’ble High Court of Kerala that where the assessee is governed by different Acts and Rules, and is not required to prepare its profit & loss account and balance sheet as per Part II & III of Schedule VI to the Companies Act, the provisions of section 115JB cannot be invoked against him. In the light of this legal position, we are of the view that the revenue authorities wrongly invoked the provisions of section 115JB of the Act, therefore the order of the CIT(Appeals) is not sustainable in the eyes of law. Accordingly, we set aside the order of CIT(Appeals) in this regard. Appeal of the assessee is partly allowed for statistical purposes.
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