TMI Blog2015 (8) TMI 465X X X X Extracts X X X X X X X X Extracts X X X X ..... account of interest as would appear from the two figures indicated above. It is, therefore, not possible to hold that the interest earned was not a business income. When the assessee has paid interest of nearly ₹ 2.66 crores and has earned interest of nearly ₹ 1.88 crores, the effective debit on that side is less than ₹ 1 crore. No reason why it can be said that the interest earned by the assessee should not be treated as the business income for the purpose of the benefit under section 33AB. Another reason why the views expressed by the Tribunal cannot be accepted is that the benefit under section 33AB can be obtained provided the assessee has made the deposits with the national bank. Such deposits are not interest-free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 948 by the Privy Council in CIT v. Raja Bahadur Kamakhaya Narayan Singh [1948] 16 ITR 325 (PC) when it said (page 328) : 'The word derived is not a term of art. Its use in the definition indeed demands an enquiry into the genealogy of the product. But the enquiry should stop as soon as the effective source is discovered. In the genealogical tree of the interest land indeed appears in the sec ond degree, but the immediate and effective source is rent, which has suffered the accident of non-payment. And rent is not land within the meaning of definition.' On behalf of the assessee, an analogy was sought to be drawn from section 80J which their Lordships distinguished by pointing out that in section 80J the language used was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d interest on such short- term deposits made out of the business funds available with the assessee before they were utilised for actual business and, therefore, it was incidental to the business activity of the assessee and interest on such short-term deposits must be treated as business income. Mr. Mazumder submitted that the view taken by the learned Tribunal is palpably wrong and should be set aside. Ms. Gutgutia, learned advocate besides relying upon the judgment in the case of Pandian Chemicals (supra) also drew our attention to a judgment of the apex court in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. v. CIT [1997] 227 ITR 172 (SC), wherein the question was whether the loss arising out of payment of interest fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... always be blocked. Therefore, the funds which were surplus at any point of time were fruitfully invested in short-term fixed deposits and the assessee thus earned interest which in a way has reduced its burden on account of interest as would appear from the two figures indicated above. It is, therefore, not possible to hold that the interest earned was not a business income. When the assessee has paid interest of nearly ₹ 2.66 crores and has earned interest of nearly ₹ 1.88 crores, the effective debit on that side is less than ₹ 1 crore. We are, as such, unable to see any reason why it can be said that the interest earned by the assessee should not be treated as the business income for the purpose of the benefit under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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