TMI Blog1968 (10) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication of the assessee. The questions referred are: " 1. Whether, on the facts and in the circumstances of the case, the interest income and the share transfers were rightly assessed under other sources ? 2. Whether, on the facts and in the circumstances of the case, the assessee was entitled to the deduction of the expenses amounting to Rs. 34,139 ? " This reference relates to the assessment year 1962-63 for which the previous year is the financial year 1961-62. The assessee is a public limited company which was incorporated on February 5, 1960. The objects of the company were, inter alia, manufacture and sale of all types of electric wires, cables, etc. The company obtained the certificate of commencement of business on July 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows: " To invest and deal with the funds of the company not immediately required upon such securities and in such manner as may from time to time be determined " The assessee-company claimed that the deposit of the share capital made by the company in banks was a business carried on by the company, as empowered by the aforesaid clause in its memorandum of association, and that the interest earned thereby was income from business. This claim was rejected by the Income-tax Officer who held that the amounts received by the company as interest and by share transfer and splitting fees were income from other sources. There was no dispute that, if this was income from business, the expenditure of Rs. 34,139 was an allowable deduction. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his was done, because the company had not commenced business, and the amounts were not immediately required for any business. The receipt of income by interest was only incidental or consequential on the deposit. It can hardly be contended that, if an individual, who carries on any business other than a business of banking or dealing in money, deposits his surplus funds in a bank and receives interest thereon, the interest thus received would be income from business. The position cannot at all be different, if the assessee happens to be an incorporated company instead of an individual. On the facts of this case, the finding of the Tribunal that the deposit of the share capital by the company in banks was not a business carried on by the com ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
