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2017 (7) TMI 1359 - HC - Income TaxIncome from other source - assessee capitalized the interest income received from the FDRs there by reducing the cost of fixed assets - HELD THAT:- Issue is covered by the decision of this court in [2017 (7) TMI 1206 - RAJASTHAN HIGH COURT] wherein it has been held as if a person borrows money for business purpose but utilises that money to earn interest, however temporarily, the interest so generated will be his income. This income can be utilised by the assessee whichever way he likes. He may or may not discharge his liability to pay interest with this income. Merely because it was utilised to repay the interest on the loan taken by the assessee, it did not cease to be his income. The interest earned by the assessee could have been used for many other purposes. If the assessee purchased a house or distributed dividend or paid salary of its employees with the money received as interest, will the interest amount be treated as not his income ? This is not a case of diversion of income by overriding title. The assessee was entirely at liberty to deal with the interest amount as he liked. The application of the income for payment of interest could not affect its taxability in any way.” - Decided against revenue.
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