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2020 (4) TMI 538 - AT - Income TaxCorrect head of income - Interest income assessment - under the head “income from other sources” OR "business income" - proof of necessary nexus with assessee's business - HELD THAT:- In the instant case, we find that FDR’s were placed with PNB under its lien for providing necessary margins for the purposes of obtaining the bank guarantees which were required to be placed with the awarder of the contracts to the assessee and issued by the PNB. There exist a direct nexus between pledging of FDRs with bank and seeking bank guarantee for the purposes of assessee’s business. Some of the FDRs were directly placed with Chief Engineer, PWD, Jaipur by way of security towards performance of contract obligations. Following the ratio laid down in case of M/s Choudhary & Brothers [2018 (10) TMI 1226 - RAJASTHAN HIGH COURT] obtaining and pledging the FDR for the purposes of obtaining bank guarantee for the purposes of its business, the assessee has thus established the necessary nexus with his business and interest earned from such FDRs cannot be treated as income from other sources and would rather be treated an income earned from business. - Decided in favour of assessee.
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