TMI Blog2017 (3) TMI 1873X X X X Extracts X X X X X X X X Extracts X X X X ..... We find force in the submissions of the assessee that the net profit as per revenue account the assessee shown under the different heads i.e. income from house property, income from other sources and income from business. Financial statements are prepared after completing all the legal requirements. But, from the operational point of view all the income were disclosed under whatever sources are the integral parts of assessee s business. As relying on TIRUPATI WOOLLEN MILLS LIMITED [ 1991 (1) TMI 34 - CALCUTTA HIGH COURT] we hold that the interest earned on fixed deposits made out from accumulated profits and reserves is the income, which derived from assessee s business activity. Therefore, the assessee is eligible to claim deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken a chance to claim of admissibility of ₹ 259,14,135/- u/s. 80IB(10) of the Act showing the same derived from its business operation and above deduction claimed u/s. 80IB as per the revised computation was disallowed by the AO and to that effect an order u/s.143(3) of the Act was passed on 28-12-2011. 4. Aggrieved by such order of the AO, the assessee preferred an appeal before the CIT-A and contended that the West Bengal Housing Board came into existence in the year 1972 by an order under the West Bengal State Legislature. It commenced the business of housing project from July, 1973. At the initial stage, the Housing Department, Govt. of West Bengal allotted several semi finished projects to the assessee which were subsequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible for deduction u/s.80IB(10). 6. The CIT-A considering the submissions of assessee was of the opinion that the said interest accrued on fixed deposits, which were made out from business funds available with the assessee and the same is incidental to business activity of assessee being eligible for deduction u/s. 80IB of the Act and directed the AO to allow the claim of the assessee. Relevant finding of the CIT-A on this issue is reproduced herein below for better understanding:- 9.3 The moot point here is that whether the accrued interest is to be treated as income from the business which is entitled for exemption u/s 80IB(10) of the Act or Income from Other Sources. The appellant has shown the interest accrued on the fixed deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the fact that the purpose of the assessee in investing in fixed deposits is to make available funds for its housing projects and therefore the interests on such deposits should be treated as the business income of the assessee. Not only that there is no gainsaying the fact that the investment was made out of the business fund available with the assessee, the assessee is also entitled to treat the interest income as the income from business. I am of the firm view that the term business is a word of very wide import and by no means to be determined in a limited scope and has to be considered with reference to each particular kind of activity and occupation of the assessee concerned. Upon the peculiar facts of this case, I am of the opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on interest income. The ld.AR argued that only business Funds were utilised for making deposits, which fetched interest income. We find force in the submissions of the ld.AR of the assessee that the net profit as per revenue account the assessee shown under the different heads i.e. income from house property, income from other sources and income from business. Financial statements are prepared after completing all the legal requirements. But, from the operational point of view all the income were disclosed under whatever sources are the integral parts of assessee s business. In this regard, we may refer to the decision as relied on by the ld.AR of the assessee in the case of supra. Relevant finding in this regard is reproduced herein below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the company utilised its commercial assets which were lying in the form of surplus cash earning interest. Such earning, according to the Tribunal, arising from utilisation of commercial assets would be business income and it would not be correct to say that the income in question was income from other sources . The Tribunal, in that view, was of the opinion that the income derived from the utilisation of commercial assets would be income from business. The Tribunal, on the question of business loss, found that, for the assessment year under consideration, there was income from commercial assets and, therefore, the question of not allowing expenses did not arise. The expenses were business expenses and should have been allowed. Since, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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