Taxability of interest on share application money upheld as income from other sources; settlement order challenge failed.

Interest earned on temporarily deployed excess share application money is taxable as income from other sources because its revenue character is not changed by the intended use of the funds, in line with Tuticorin Alkali. The related public issue expenses were treated as eligible for amortisation under section 35D, and no prejudice was shown from that treatment. Interference with the Settlement Commission's order was not justified because no grave procedural defect, violation of natural justice, or absence of nexus between reasons and decision was established. The writ challenge therefore failed and the Commission's determination remained undisturbed.

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Issues: Whether interest earned on excess share application money was assessable as income from other sources, and whether the related public issue expenses were allowable by way of amortisation under section 35D.

Analysis: The interest arose from deployment of surplus funds received on public issue and was separately taxable as revenue receipt under the principles recognised in Tuticorin Alkali and the related line of authority. The use or intended destination of the receipt did not alter its tax character. The Settlement Commission also allowed amortisation of the public issue expenses under section 35D, so the assessee could not complain of prejudice on that account. No grave procedural defect, violation of natural justice, or absence of nexus between reasons and conclusion was shown to justify interference with the Commission's order.

Conclusion: The interest income was rightly taxed as income from other sources, the amortisation treatment was not shown to be illegal, and the challenge to the Settlement Commission's order failed.

Final Conclusion: The writ petitions were liable to be dismissed and the Settlement Commission's determination was left undisturbed.

Ratio Decidendi: Interest earned on temporarily deployed share application money is taxable as revenue income from other sources, and interference with a settlement order is warranted only for grave procedural defect, violation of natural justice, or absence of nexus between reasons and decision.

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