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2016 (4) TMI 1391 - AT - Income TaxCorrect head of Income - FD interest - business income or income from other sources - HELD THAT:- Not in dispute that the assessee had to invest funds in fixed deposits and offered them as security for the overdraft facilities it received from banks. In the case of Indo Swiss Jewels Ltd. [2005 (9) TMI 47 - BOMBAY HIGH COURT]had held that where interest is earned on inter corporate deposits made from surplus funds which are set apart for payment of imported machinery, the said interest income has to be assessed as business income. In the case of Koshika Telecom Ltd. [2006 (2) TMI 140 - DELHI HIGH COURT] has taken the view that where deposit of margin money by an assessee with a bank was linked with the furnishing of bank guarantee to be given to the Department of Telecommunications, for obtaining a licence by an assessee who was in the business of telecommunication, the same has to be treated as business income. In the case of Commissioner Of Income-Tax v. Lok Holdings [2008 (1) TMI 365 - BOMBAY HIGH COURT] held that money received by a property developer from prospective purchases during the progress of construction and where such funds were deposited by an assessee with the bank, interest earned on such deposits was held to have arisen out of business activity and, therefore, the same had to be construed as income from business. In view of the above, we are of the view that the order of CIT(A) holding that the interest income is income from business has to be upheld. - Decided in favour of assessee.
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