https://www.taxtmi.com/caselaws?id=5601 SC held that interest earned by the assessee-company from short-term bank deposits made out of surplus borrowed funds prior to commencement of business is taxable as "Income from other sources" under section 56. Such interest is of revenue character and cannot be treated as capital receipt or adjusted against interest payable on term loans proposed to be capitalised. Deduction or set-off is permissible only as expressly allowed under section 57, which did not cover the assessee's claim. Accounting treatment or long-standing practice cannot override the statutory scheme. Both parts of the reference were answered in favour of the Revenue, affirming the Tribunal's view and disapproving contrary HC decisions. en-us Tue, 08 Jul 1997 00:00:00 +0530 Tue, 16 Dec 2025 15:06:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=5601 SC held that interest earned by the assessee-company from short-term bank deposits made out of surplus borrowed funds prior to commencement of business is taxable as "Income from other sources" under section 56. Such interest is of revenue character and cannot be treated as capital receipt or adjusted against interest payable on term loans proposed to be capitalised. Deduction or set-off is permissible only as expressly allowed under section 57, which did not cover the assessee's claim. Accounting treatment or long-standing practice cannot override the statutory scheme. Both parts of the reference were answered in favour of the Revenue, affirming the Tribunal's view and disapproving contrary HC decisions. Case-Laws Income Tax Tue, 08 Jul 1997 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=5601