2011 (7) TMI 358

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....9 and 1999-2000 are as follows:   "1.Whether the Appellate Tribunal was right in law in holding that the interest receipts from Short Term Deposits with bank for opening Letter of Credit has to be assessed as income from other sources?   2. Whether the Appellate Tribunal was right in law in holding that the interest income has to be assessed as income from other sources inspite it relates to business of the assessee."   3. As far as the assessment year 1999-2000, apart from the two questions there is yet another question which is as follows:   "Whether the Appellate Tribunal was right in law in holding that interest earned from the advance made by the appellant should be assessable with interest income under ....

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.... deposits could not be treated as "income from business". On the other hand the income on the deposits held by the assessee could only be assessed as "income from other sources".   8. As regards the interest earned on money lent, the Tribunal pointed out that the assessee's main business was trading in timber, machinery, Pharmceuticals Even though the partnership deed did not prohibit any activity in money lending, yet the deed revealed that the object of the business was not money lending. The Tribunal further pointed out that out of the surplus money available, the assessee advanced money to other firms. This by itself would not mean that the assessee was carrying on money lending business as in the ordinary course of business. Th....