TMI Blog1978 (9) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... business of financiers and money lenders. The assessee advanced certain amounts to different parties and earned interest of Rs. 5,633 which the company claimed as business income. The company incurred expenses of Rs. 6,670 which it claimed as business expenditure. The ITO allowed expenses of Rs. 563 only from interest receipts. In appeal the AAC held that the income from interest has rightly been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the interest income cannot be treated as business income, since the company is formed for acquiring land and constructing building and selling them and not for doing money lending business. He further submitted that the expenditure incurred for earning interest alone could be allowed. Thus, he justified the order of the AAC. The learned departmental representative relied on the decisions rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rabhai Spinning and Weaving Contended. Ltd., (4) the assessee company was originally running a textile mill which was subsequently closed down. Thereafter, it earned interest on certain advances and deposits made by it. The Gujarat High Court held that the interest income was liable to be taxed as income from other sources. The above decision covered the issue raised in this appeal. It held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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