TaxTMI 
TaxTMI 
1999 (12) TMI 109
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....gle order for the sake of convenience. 2. During the course of assessment proceedings for asst. yr. 1989-90, the AO noted that assessee earned interest income by way of investing the amount in FDRs, in securities, etc. and shown this income as income from business and accordingly availed the deduction under s. 32AB of the IT Act. Objection of the assessee, was sought by the AO and after considering the reply of the assessee, the AO was not satisfied. Accordingly he treated the income earned as interest on these accounts as income from other sources and negatived the claim of deduction under s. 32AB. Similar decision was taken by the AO relevant to asst. yr. 1990-91. The assessee preferred appeal before the CIT(A) who examined the issue i....
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....s to be given and earning on these securities, therefore, should be treated income from business. In regard to reliance made by the learned Departmental Representative on (1999) 240 ITR 24 (Mad), it was stated that the facts of this case are entirely different and, therefore, this case law is not applicable on the facts of the present case. 5. We have heard the rival submissions and considered them carefully. We have also perused the case laws as relied upon by both the parties. After considering the material on record and considering the ratios of various case laws as relied upon by both the parties and also by the CIT(A), we find that there is no infirmity in the orders of the CIT(A). The CIT(A) has discussed the issue in detail and th....
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....ctory premises where other manufacturing activities were carried on. The Textile Commissioner, Ministry of Textiles, Government of India, Bombay, granted approval for setting up a new unit of manufacturing spun yarn at Sahibabad for existing factory premises and the money kept in short-term with the bank was substantially withdrawn and utilised for the purposes of extension of business. Therefore, the income earned on these investments is to be treated as income from business and not from the other sources of income. These contentions of the learned authorised representative were considered by the CIT(A) with a deep thought and after application of mind then the CIT(A) came to the conclusion that these incomes are part of the business incom....
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....so from what may be described as "business activity". If it is so derived then the mere fact that it is taxed under a different section will make no difference. The approach to the problem has, therefore, to be disassociated from the section under which the tax is imposed on the form of income." 7. The CIT(A) also considered the ratio of cases in CIT vs. Motilal Hira Bhai Spg. & Wvg. Co. Ltd. (1978) 113 ITR 175 (Guj), Andhra Pradesh State Financial Corpn. Ltd. vs. CIT (1985) 44 CTR (AP) 1 : (1984) 150 ITR 533 (AP), CIT vs. Paramount Premises (P) Ltd. (1991) 190 ITR 259 (Bom), CIT vs. Tirupati Woollen Mills Ltd. (1992) 193 ITR 252 (Cal), (1970) 77 ITR 139 (sic), CIT vs. Bhavnagar Trust Corpn. (P) Ltd. (1968) 69 ITR 278 (Guj) and after con....
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....urt are given in bottom para of p. 359 continuing on p. 360 which is reproduced here as under: "In CIT vs. Rajasthan Land Development Corporation (1995) 125 CTR (Raj) 261 : (1995) 211 ITR 597 (Raj), The Rajasthan High Court while considering the provisions of ss. 28 and 56 of the IT Act, 1961, held (i) interest on fixed deposits and other deposits before the commencement of business is an income from other sources; (ii) income from interest on deposits of surplus money during the construction period is also to be considered as income from other sources; (iii) interest income in respect of surplus money, not required for business and deposited in banks, or with persons as idle money, for safe keeping, would be assessable as income from ot....