Substantial question of law test bars admission where fixed-deposit interest classification causes no tax impact

The High Court applied the settled test for admission under section 260A and found no substantial question of law. Although the dispute concerned whether interest on fixed deposits should be taxed as business income or income from other sources, the Court held that the point did not alter the tax liability on the facts found by the lower authorities. Because no additional tax would arise even if the Department's view were accepted, the appeal was not admitted.

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Issues: Whether the appeal under section 260A of the Income-tax Act, 1961 raised a substantial question of law so as to warrant admission.

Analysis: The High Court applied the settled test for a substantial question of law and compared it with the facts of the case. Although the dispute related to the treatment of interest earned on fixed deposits as business income or income from other sources, the Court found that the issue did not affect the tax liability in a manner that would justify admission under section 260A. It held that even if the Department's contention were accepted, no additional tax would arise on the facts found by the lower authorities.

Conclusion: The appeal did not involve any substantial question of law and was not admitted.

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