2011 (2) TMI 1192

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....RI.P.BALAKRISHNAN (E)   Judgment   Ramachandran Nair, J.   Two questions are raised for our decision in the appeal arising from the orders of the Income Tax Appellate Tribunal, Cochin Bench. The first question is whether interest received from deposits held with banks is income from business or from other sources. The second question relates to the proportionate disallowanc....

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.... earned an interest of over Rs.54.42 lakhs. In fact, the total income of the assessee works out only little over Rs.12.23 lakhs. If the R.B.I. requires a non-banking financial company to maintain deposits with the bank, probably it may be a business activity.   In that event, interests therefrom could be treated as business income. However, the assessee has not put up such a case before th....

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....nks is income earned from business activity or whether it is income from other sources.   3. The next issue relates to disallowance of interest for the funds diverted for investments in shares and immovable properties. It is not known whether the assess earned any income in trading of shares or in the purchase and sale of real estate. If the assessee is engaged in long term investments whi....

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....e of interest attributable to funds utilised for other purposes. In support of the Revenue's contention that interest on deposits is to be assessed as income from other sources, the learned senior counsel also relied on the decisions in Commissioner of Income Tax v. Popular Vehicles & Services Ltd. [ (2010) 325 I.T.R. 523 (Ker.)) and Pandian Chemicals Ltd. v. Commissioner of Income Tax [ (2003) 26....