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2016 (2) TMI 795 - ITAT CHENNAI

2016 (2) TMI 795 - ITAT CHENNAI - TMI - Treatment of income from deposits - income from business OR income from other sources - Held that:- In this case, interest was in the nature of additional source of income to the assessee, which was not in any way linked to the business that the assessee was carrying on. The interest income that has been received by the assessee on its own fund kept in deposit with the bank did not have any direct link or nexus with the business that was being carried on. .....

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rgeable under section 56. - Decided against assessee - ITA No. 2013/Mds/2015 - Dated:- 20-1-2016 - Chandra Poojari, AM And Duvvuru RL Reddy, JM For the Appellant : Mr N C Prabhakar, Adv For the Respondent : Mr A V Sreekanth, JCIT ORDER Per Chandra Poojari, AM This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-6, Chennai for the assessment year 2007-08. The issue in the appeal is with regard to treatment of income from deposits as income from bus .....

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uch deposits should be assessed under the head 'income from other sources. The assessee did not offer the interest to tax. According to the Assessing Officer interest income earned by parking funds is income from other sources as held by the Supreme Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. Vs. CIT (227 ITR 172)(SC). Accordingly, he brought the above interest income under the head 'income from other sources'. Aggrieved the assessee carried on appeal befor .....

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ls) was of the view that the Supreme Court while delivering the judgement in the case of CIT Vs. Bokaro Steels Ltd. (236 ITR 315) (SC) has referred to its earlier decision in the case of Tuticorin Alkai Chemicals & Fertilizers Ltd.(supra). The Commissioner of Income Tax (Appeals) distinguished the facts in the cases of Indian Oil Panipat Power Consortium Ltd. (315 ITR 255) (Del) and Bokara Steels Ltd. (236 ITR 315) (SC) and held that the same are not applicable to the facts of the present ca .....

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r authorities. 4. We have heard both the parties and perused materials on record. In this case, interest was in the nature of additional source of income to the assessee, which was not in any way linked to the business that the assessee was carrying on. The interest income that has been received by the assessee on its own fund kept in deposit with the bank did not have any direct link or nexus with the business that was being carried on. The deposit made with the bank was for the convenience and .....

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