TMI Blog2008 (11) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Respondent : None CORAM : Hon'ble Mr.Justice Badar Durrez Ahmed Hon'ble Mr. Justice Rajiv Shakdher Rajiv Shakdher, J. 1. This is an appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the "Act") against judgment dated 07.09.2007 passed by the Income Tax Appellate Tribunal (hereinafter referred to as the "Tribunal") in ITA No. 3967/Del/2006 pertaining to the assessment year 2003-04. 2. The Revenue is aggrieved by the impugned judgment, in so far as, the Tribunal held that interest income on fixed deposits earned by the assessee be treated as "business income", as against, "income from other sources". The consequent effect of which would be that the assessee would be required to deduct 90% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utiny and accordingly, a notice under Section 143(2) of the Act dated 12.10.2004 was issued, and duly served, on the assessee. During the course of scrutiny it was revealed, inter alia, that the assessee had received interest on fixed deposit amounting to Rs 1,51,869/- which, the assessee had, shown as "business income". 6. The Assessing Officer by an order dated 09.1.2006 came to the conclusion that the interest income earned on the fixed deposit had to be treated as "income from other sources" and accordingly, deduction under Section 80HHC of the Act, on the interest income, was disallowed. 7. Aggrieved by the same, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [hereinafter referred to as the "CIT(A)"]. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce there is direct nexus between borrowal of fund and placing in the deposit, the action of ld. Commission of Income-tax (Appeals) needs no interference." 10. Having noted the facts obtaining in the instant case and the orders of the authorities below, we find that the judgment of this Court in Sriram Honda Power Equip (supra) is not only applicable on all fours but also that its ratio has been misconstrued by the Tribunal. This is evident upon reading Paragraphs 35 and 36 at Pages 496-497 of the said judgment. The observations of the Division Bench, in so far as, they are relevant for purposes of disposal of this appeal are extracted below: "We are, therefore, of the view that where surplus funds are parked with the bank and interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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