TMI Blog2016 (7) TMI 1539X X X X Extracts X X X X X X X X Extracts X X X X ..... e find merit in the contentions of the assessee that it had to keep some surplus funds in hand in order to meet the maintenance requirements of the roads. In these set of facts, we are of the view that there were business exigencies in keeping the funds in fixed deposits and hence there is merit in the contentions of the assessee that interest income earned on those fixed deposits is assessable as income from business. In the case of Lok Holdings [ 2008 (1) TMI 365 - BOMBAY HIGH COURT] the assessee therein collected advances from the customers who intended to purchase the flats in the properties as developed by the assessee. Since the construction was going on, the surplus funds available with the assessee out of the advances so receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chemicals Fertilisers Ltd Vs. CIT (227 ITR 172) and also the decision rendered by the jurisdictional Hon ble Bombay High Court in the case of Godavari Sugar Mills Ltd Vs. CIT (191 ITR 359). The Ld CIT(A) also confirmed the same. Aggrieved, the assessee has filed this appeal before us. 3. The Ld A.R submitted that the fixed deposits have been made out of funds generated from the business of the assessee and hence the interest income should be assessed under the head Business. In this regard, he placed reliance on the decision rendered by Hon ble Bombay High Court in the case of Lok Holdings (308 ITR 356) and also the decision rendered by the co-ordinate bench in the case of M/s West Gujarat Expressway Ltd (ITA No. 1284/Mum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o keep some surplus funds in hand in order to meet the maintenance requirements of the roads. In these set of facts, we are of the view that there were business exigencies in keeping the funds in fixed deposits and hence there is merit in the contentions of the assessee that interest income earned on those fixed deposits is assessable as income from business. In the case of Lok Holdings (supra), the assessee therein collected advances from the customers who intended to purchase the flats in the properties as developed by the assessee. Since the construction was going on, the surplus funds available with the assessee out of the advances so received was deposited in Fixed deposits. The Hon ble jurisdictional Bombay High Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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