My querry is assessee is manufacturer and exporter of jewellery and unit is situated in SEZ covered U/S 10AA. For obtaining various facilities from bank such as advance Gold loan against export order assessee have to make FDR as margin money against LC.Said FDR is directly related with gold procurment from Bank itself and have direct nexus with business carried on. ITO wants to treat such interest received against FDR as Income from Other source and not Profit from industrial unit. Kindly through some light and legal decisions directly related.
CA KISHOR DATTANI
Interest from FDR for Gold Loan in SEZ: Business Income or Other Sources under Section 10AA? An individual inquired about the tax treatment of interest received from a Fixed Deposit Receipt (FDR) used as margin money for obtaining a gold loan in a Special Economic Zone (SEZ) under Section 10AA. The issue is whether this interest should be classified as business income or income from other sources. A respondent clarified that if the FDR is created out of business necessity, it should be considered business income due to its direct connection to the business activities, rather than being treated as income from other sources. (AI Summary)
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