TMI Blog2022 (2) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... VS EXPORTS VERSUS ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-I, MADURAI. [ 2019 (8) TMI 361 - MADRAS HIGH COURT] wherein held that Fixed Deposits have been created by the bank themselves by carving out a portion of the export sale proceeds on realisation and retaining them as Fixed Deposits in the name of the assessee to be retained by the bank as additional security for the loan availed by the assessee for their export business. As mentioned earlier, the conversion of a portion of the sale proceeds as Fixed Deposits was done by the bank themselves and not on the volition of the assessee.Therefore, we are fully convinced that the transaction was connected and closely linked with the assessee's business activity. - Decided in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. The Assessing officer by order dated 31.03.2006, held that since the interest income is assessed under the head 'other sources', interest paid on borrowed capital and debited in the profit and loss account is not allowable against the interest received and accordingly, reduced the deduction under section 80HHC. 3. Aggrieved by the said order of assessment, the appellant preferred appeal before the Commissioner of Income-tax (Appeals), who by order dated 11.10.2006 held that the interest income on fixed deposits is assessable under the head 'other sources' and not under the head 'business'. The CIT(A) also rejected the alternative plea of proportionate interest under section 57(iii) of the Act. Challenging the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me is to be assessed as business income or income from other sources and whether borrowed funds were utilized for making the deposits ? 5. Whether on the facts and circumstances of the case, the Appellate Tribunal is right in law in not entertaining the alternative submission that proportionate interest paid on the borrowed capital should be under Section 57(iii) of the Act ? 6. Whether on the facts and circumstances of the case, the Appellate Tribunal was right in not dealing with the principle of mutuality wherein the transactions with the same banker split into or spread over to two or more accounts shall not by itself may any difference if the substance of the transaction is the same. 5. When the matter was taken u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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