TMI Blog2001 (6) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... , both for asst. yr. 1995-96 and are directed against the common order of CIT(A). Udaipur dt. 29th June, 1999. CO. No. 28/Jd/2000 is assessee's CO is respect of Revenue's appeal No. 455/Jd/1999. 4. I have heard the arguments of both the sides and have also perused the records. 5. First I take up ITA No. 469/Jd/1999 being Revenue's appeal. The Revenue has taken only one ground disputing the learned CIT(A)'s order in allowing deduction for depreciation and interest paid to third parties from the profit determined by applying net profit rate. The learned Departmental Representative of Revenue though tried to support the AO's order, but frankly conceded that the issue regarding depreciation is covered against the Revenue by the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up ITA No. 521/Jd/1999 being assessee's appeal for asst. yr. 1996-97. The assessee has raised as many as four grounds of appeal before the Tribunal, but the only issue agitated and argued before us by the learned authorised representative of assessee is regarding the treating of bank interest as income from other sources instead of as business income. The learned authorised representative of assessee has contended that the assessee is a contractor, registered with Canal Area Development (CAD) and Indira Gandhi Nahar Pariyojana (IGNP), registration certificate being placed on pp 5 and 6 of the paper book. He has contended that at the time of registration, the assessee is under an obligation to make security deposits and this interest is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 259, the assessee was required to give guarantee to the state bank in respect of the land taken on lease for construction work. For this purpose, certain amount was kept in fixed deposits on which the assessee earned interest. In the circumstances the Tribunal gave finding of fact that the entire interest sprang from the business activity of the assessee and it did not arise out of any independent activity. Accordingly, the interest income was considered as the business income of the assessee. In 135 Taxation 59 Tribunal, Madras, the money received in advance from importers was deposited in banks and the interest earned thereon was claimed to be the business income. In the circumstances, the Tribunal, Madras held that the interest spran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determining the NP by applying NP rate. Accordingly, I find the depreciation similarly allowable and so I find no fault with the impugned order of learned CIT(A) in allowing deduction for depreciation separately after determination of NP by applying NP rate. I, therefore, decline to interfere with the same. 12. In the result, the Revenue's appeal being ITA No. 455/Jd/1999 may be treated as dismissed. 13. Assessee's CO No. 28/Jd/1999 has not been pressed by the learned authorised representative of assessee during arguments, I therefore, dismiss the same accordingly. 14. I now take up ITA No. 447/Jd/1999 being assessee's appeal. The assessee has raised as many as five grounds of appeal before the Tribunal. But during arguments, the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest earned on the amounts deposited by way of security to be the income from business and not as income from other sources. As regards the interest income earned by lending fund temporarily to M/s G.R. Industries, the same is also covered by the decision of Hon'ble Calcutta High Court in the case of Tirupati Woollen Mills (P) Ltd. discussed above. Accordingly. I treat the interest earned on business fund lying idle and temporarily lent to M/s G.R. Industries to be arriving out of business activity, and as such to be income from business and not as income from other sources. I order accordingly. 17. In the result the assessee's appeal being ITA No. 447/Jd/1999 may be treated as allowed in part as indicated above. - - TaxTMI - TMITa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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