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2017 (9) TMI 635 - AT - Income TaxInterest income treated as business profit - Held that:- As decided in CIT vs. Bhawal Synthetics [2017 (5) TMI 540 - RAJASTHAN HIGH COURT] it is not in dispute that the assessee had income of interest through FDRs and while setting off that the Assessing Officer as well as the ITAT did not examine the aspect as to under which provision the assessee claimed deduction or set off of his income from other sources against interest payable on the borrowed fund. The reason given is that the amount pertaining to FDR was not surplus amount but part of amount that was kept to obtain letter of credit for purchase of machinery. While accepting the fact that the FDR was for obtaining letter of credit to purchase machinery but so far as interest earned thereon is concerned, that is nothing but income through other sources, as such, the Commissioner of Income Tax rightly treated the same as income taxable. Discount from the cost of material instead of treating the same as part of the income - Held that:- The assessee received discount from the various suppliers against the purchases made by it. He submitted that the AO wrongly treated the same as income other sources ignoring that when such discount is received from the suppliers, it needs to be reduced from the cost of the raw material consumed in contract work. We find merit in the contention of the assessee as the discount is nothing but reduction in the value of the material so supplied. Therefore, same was required to be reduced from the cost of raw material consumed in contract work. Therefore, we do not see any infirmity in the order of ld. CIT (A), the same is affirmed. This ground of the revenue is rejected.
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