2017 (4) TMI 771

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....ana Panda, Advocates. O R D E R The Revenue is aggrieved by an order of the Income Tax Appellate Tribunal (ITAT) which had affirmed the CIT (A)'s order in regard to the disallowance of interest that the assessee had made. It is urged that the interpretation of Section 57 (iii) of the Income Tax Act, 1961 by the ITAT is erroneous. The assessee had for the purpose of business, borrowed capital fr....

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....with the bank and these FDRs were made out of the receipt of Rs. 7.25 crores from Sunrise Securities Ltd. and the FDRs were made for the purpose of business and for this an OD A/c (vide OD A/c No.CA-401559) was also opened with the same bank i.e. SBOs in which the FDRs were made. It is submitted that the assessee did not succeed in the business because of various difficulties and problems but it d....

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....imed by the assessee in the return of income and as such the appeal of the assessee is allowed." The above findings were concurred by the ITAT in the impugned order. Mr. Zoheb Hossain, learned counsel for the Revenue relies upon the decision of the Supreme Court in Commissioner of Income Tax v. Dr. V.P. Gopinathan, 2001 (10) SCC 67 and the latter decision of this Court in CIT v. Delhi Brass & Met....

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....which was used as security. There is nothing in that decision to indicate that the essential point of the deposit was to create security to borrow the funds that the assessee did. In Delhi Brass & Metal (supra), the claim was in the context of Section 80HHC. The issue was whether the interest earned on account of surplus funds which the assessee characterized as "parked surplus fund" was business ....