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2018 (6) TMI 1721 - AT - Income TaxInterest receipt - Income from other sources or Capital gain - whether assessee is not entitled to set off of business expenses against the income shown under the head ‘income from other sources’ as the business of the assessee has not commenced ? - HELD THAT:- The assessee has parked the loan amount in short term deposits with Banks and other financial institution and earned interest income, which has no direct nexus and the interest income is directly attributable to the deposits made out of funds generated by way of term loans. We are of the considered opinion that the interest earned by the assessee has to be treated as income on commercial principles. Having regard to the judgment in the case of Tuticorin Alkali Chemicals and Fertilisers Ltd v CIT [1997 (7) TMI 4 - SUPREME COURT] AND in the case of CIT v. Autokast Ltd. [2000 (11) TMI 7 - SC ORDER] the Hon’ble Supreme Court has held that the interest income is assessable to tax in the hands of the assessee. Hon’ble Supreme Court in the above decisions that the income tax is attracted at the point when the income is earned from the fixed deposits/short term deposits and taxability of income is not dependent upon its destination or the manner of its utilization and respectfully following the above decisions, we confirm the order of the ld. CIT(A) in holding that the Assessing Officer rightly brought the interest income under the head ‘income from other sources’ and dismiss the ground raised by the assessee.
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