2016 (2) TMI 349

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.... Per Chandra Poojari, Accountant Member These appeals by the assessee are directed against the common order of the Commissioner of Income-tax(Appeals) dated 29.9.2015 for the asst. years 2005-06 and 2006-07. 2. The common ground raised in these appeals is that the CIT(Appeals) erred in confirming the action of the Assessing Officer in treating the interest income as income from other sour....

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....d by this, the assessee went in appeal before the CIT(Appeals). 4. Before the CIT(Appeals), the assessee contended that interest earned from fixed deposit with State Bank of Travancore to open bank guarantee in favour of M/s. GAIL (India) Ltd. is to be treated as income from other sources. However, the CIT(Appeals) dismissed the ground of appeal by placing reliance on the judgment of the Suprem....

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....sent case on this touchstone, we find that the borrowed funds in this case has been utilized to open bank guarantee / letters of credit in favour of M/s. Gas Authority of India Ltd. to obtain allotment letter and rights to utilize the natural gas to produce electricity. The deposit in the bank was made to obtain the said BG/LC. In this view of the matter, the precedent from the Hon'ble Apex Court ....