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2017 (3) TMI 1476 - AT - Income TaxDenial of benefits of exemption under s.10(23B) - AO treated the interest income as ‘income from other sources’ and held that the interest income cannot equated with income earned from activities of development of Khadi or village industries - whether interest income on surplus funds deployed in fixed deposits and other investments etc. partakes the character of income attributable to business of production, sale or marketing of khadi and allied products in terms of section 10(23B)? - Held that:- As decided in assessee’s own case in earlier years the provisions under which relief is claimed by the assessee is part of exemption provisions whose purpose is also to encourage prescribed activities of such institutions and therefore as per settled judicial principal in this regard such provisions are always to be given a beneficial interpretation with a view to advance the legislative intent. From the facts and financial figures on record we also note that the income of interest is attributable to and arises from working funds in an integrated manner and for this reason also we find that interest cannot be separated from the overall income and activities of the Trust. For the reasons above we therefore hold that the interest income earned by the assessee is entitled to the exemption u/s.10(23B) of the Act. This ground of appeal of the department is therefore dismissed.
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