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2014 (9) TMI 1195 - HC - Income TaxDeduction u/s 80HHC - Characterization of income - interest earned - business income or income from the other sources - HELD THAT:- Interest income earned by the Respondent/ Assessee is an earning out of its business activity only, as it has direct nexus with the said amount of business activity. The interest received by the Respondent/Assessee is having direct or proximate relationship with their main business activity and as such, the same has to be treated as "business income". As stated earlier, the money of the company was used for making investment in the bank deposits or call money market or inter-corporate deposits with the objective for availing short term loans or for keeping deposits for the purpose of LC's and said money had always retained its character as business assets. In our opinion, the surplus money, unless and until it is pulled out totally from the business and having absolutely no nexus with the amount or ancillary business activity and thereby the same is deposited with the bank only and solely with a view of earning interest by keeping the said funds idle, then it can be treated as non-business income or income from the other sources. In view of the facts of the present cases, we are of the opinion that the interest earned by the Respondent/Assessee is "business income" only and we hold that the Income Tax Appellate Tribunal has rightly held that the interest income earned by the Respondent/Assessee is a business income. - Decided against revenue
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