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2015 (1) TMI 100 - MADHYA PRADESH HIGH COURTTreatment of income from Interest - Whether the income from interest could be taxed holding it to be covered from prima facie adjustment u/s 143(1)(a) – Held that:- Assessee has not earned interest on the money lying idle with him for running industry - by virtue of terms and conditions of the contract petitioner was to submit a performance guarantee and for the same he had to deposit certain funds with the Bank as margin money and it is on this margin money the interest was earned – relying upon Commissioner of Income-Tax Versus Karnal Co-operative Sugar Mills Ltd. [1999 (4) TMI 7 - SUPREME Court] - the receipt of interest has some nexus and are linked to certain factors relatable to the setting up of capital, they can be set-off against each other as they are considered to be capital which would go to reduce the cost of capital structure - in the matter of assessment of income in question a debatable question arises and therefore taxing of income in the facts and circumstances of the present case holding it to be covered as prima facie adjustment u/s 143(1)(a) is not correct - the question as to whether the income in the facts and circumstances of the present case could be taxed under the provisions of section 143(1)(a) of the Act holding it to be prima facie adjustable, is not correct - the question is a debatable one and it requires consideration in accordance to the provisions of section 143 – thus, the order of the Tribunal is set aside – Decided in favour of assessee.
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