TMI Blog2018 (6) TMI 1725X X X X Extracts X X X X X X X X Extracts X X X X ..... directly and inextricably linked with the business of the assessee,so the interest earned by it had to be treated as income earned from business and cannot not be treated as income from other sources - interest earned by the assessee was obviously attributable and incidental to the business carried on by it that it would not be correct to say that this interest was totally de hors the business carried on by it. Interest can be assessed under the head Income from other sources only if it cannot be brought within one or the other of the specific heads of charge.In the case before us the interest income is clearly and justifiably assessed as business income - case under consideration is not a case of depositing unutilized and surplus money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axed as income from other sources. After considering the submission of the assessee he held that as per the Audit Report the nature of the business of the assessee consisted of distribution of films, production of films, film finance and media campaign, that the interest received from the deposits made with the bank was not a part and parcel of the business activities carried by it, that the surplus funds deposited had to be taxed separately, that the assessee itself had shown interest income on film loan separately in the P L account, that the interest income on account of film related activities was to be assessed as income from other sources. Accordingly, he rejected the claim made by the assessee that the interest income from the fixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for that reason, that with a view to safeguard the advances the company decided to deposit the money with the banks that a general approach for taxing interest income earned on fixed deposit as income from other sources could not become a prevailing force. He referred to the various deposits made by the assessee company and the duration of the fixed deposit receipts. He further observed that advances were received from various ministries and government departments for business purposes only that advances had been deposited on short-term basis to make them productive, that unlike other assessees the assessee company had to be reviewed after taking into consideration the peculiar facts, that the entire advances received by it could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Lok Holdings( supra). 5.We have heard the rival submissions and perused the material before us. We are of the opinion that considering the facts that assessee s business -production of films for Ministries of Government of India and various government departments-and the durations for which the amounts were kept with banks the income earned by it has to held as business income. The FAA had allowed the claim made by the assessee on the grounds that it was in the business of production of films that the completion of films would take time that during the intervening period the advances were deposited with bank resulting in accrual of interest income. We find that these basic finding of the FAA have not been challenged by the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire interest sprang from the business activity of the assessee and not out of any independent activity, held that the interest income received by the assessee was business income. Dismissing the appeal filed by the Department the Hon ble Bombay High Court held as under: .the Tribunal was justified in holding that the interest income received by the assessee was assessable as business income. As far as matter of Sangam Power Generation(supra), is concerned we would like to mention that matter deals with different set of facts. In that matter business had yet to commence. In the case before us the assessee is carrying on business of film production from its inception. Advances were received by assessee in its normal course of busine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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