Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 184 - HC - Income TaxCorrect head of income - interest income earned out of deposits made from the business funds including borrowed funds in the course of running the business of the appellant - income from other sources or income from business - Whether Appellate Tribunal is right in holding that that interest on borrowed capital cannot be set off against the interest earned on Fixed deposits ? - alternative submission that proportionate interest paid on the borrowed capital should be u/s 57(iii) accepted - HELD THAT:- The substantial questions of law 1 and 2 are squarely covered in favour of the assessee and against the Revenue in JVS EXPORTS VERSUS ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-I, MADURAI. [2019 (8) TMI 361 - MADRAS HIGH COURT] wherein held that Fixed Deposits have been created by the bank themselves by carving out a portion of the export sale proceeds on realisation and retaining them as Fixed Deposits in the name of the assessee to be retained by the bank as additional security for the loan availed by the assessee for their export business. As mentioned earlier, the conversion of a portion of the sale proceeds as Fixed Deposits was done by the bank themselves and not on the volition of the assessee.Therefore, we are fully convinced that the transaction was connected and closely linked with the assessee's business activity. - Decided in favour of assessee.
|