TaxTMI 
TaxTMI 
2011 (11) TMI 485
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....levant assessment year was entitled to deduction under Section 80HHC of the Income Tax Act, 1961 (Act, for short). However, while computing the said deduction the respondent had included and treated the rent received, being Rs. 1,03,363/-, and interest of Rs. 1,76,983/-, as income from profits and gains from business, which is eligible for deduction under the said Section. 3. The Assessing Officer in his order dated 30.11.1990 observed that the interest was payable by sundry debtors, Haryana State Electricity Board, on bonds issued by IDBI, on fixed deposits and on account of income tax refund. The fixed deposits had been issued and obtained out of profits earned in the earlier years. The Assessing Officer held that the aforesaid interes....
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....om fixed deposits, the assessee company has retained these profits earned in the normal course of business for the betterment and improvement of the business. These funds have also been utilized for over covering the insecurity due to market conditions and also to combat technological obsolescence. The assessee has correctly relied on the judgment of the Delhi High Court in the case of Snam Progetti S P A where it was held that if at any time the assessee had spare funds and it preferred not to keep the same idle but make a deposit in the bank which gives it such income, then such income is business income. Following the decision of the Special Bench in the case of M/s. Pearl Polymers in 80 ITD I we hold that the interest income from fixed ....
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....any intention to part with the business asset, does not show and mean that the rent earned by the respondent-assessee was taxable under the head 'business income'. After the property was given on rent, the tenant may have used the property for industrial purpose, but this will not determine the heading under which rent received is taxable in the hands of the respondent. It is admitted that the respondent-assessee was owner of the property. In these circumstances, the rental income has to be taxed under the head 'income from house property'. In this connection we may reproduce the observations of the Supreme Court in CIT v. Chugandas & Co. [1965] 55 ITR 17 (SC) wherein it has been observed as under : "It must, therefore, be held that even....
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....estion also, the issue is covered against the assessee by decision of this Court in CIT v. Shri Ram Honda Power Equip [2007] 289 ITR 475/158 Taxman 474 (Delhi). In this case it has been observed:- "35. Turning to the submissions in the present cases, as regards the first of the categories, viz., the parking of surplus funds, there should be no difficulty at all. In view of the large number of the decisions of the hon'ble Supreme Court in the context of section 56 and section 57 and those of the Kerala High Court in the context of section 80HHC itself, we are unable to accept the contention of the assessees based on Snam Proghetti [1981] 132 ITR 70 (Delhi) that interest earned on parked surplus funds should qualify as business income. Cle....