2005 (1) TMI 93

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..../94 decided by the Tribunal on March 11, 1997, to answer the following questions of law: "1. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount of sale proceeds of empty bags and containers, drums etc. and interest on F.D. has no nexus for calculation of profit of the assessee's business at the estimated rate of net profit adopted for the purpose? 2. Whether the Tribunal was justified in confirming the order of the authorities below in holding that the receipt of the sale proceeds of empty bags and interest on F. D. do not form part and parcel of the contract business and thus the amount so received at Rs. 3,85,578 is to be assessed separately under the head &#3....

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.... an appeal filed by the Revenue, the Tribunal reversed the view of the Commissioner of Income-tax (Appeals) and restored that of the Assessing Officer. In other words, the Tribunal was of the view that it is an income from other sources. It is against this view, the assessee prayed for the reference to this court. This request having been acceded to the Tribunal made the reference to this court to answer the aforementioned questions. 6. Heard Shri S. C. Bagadia, learned senior counsel with Shri D. K. Chhabra, learned counsel for the assessee and Shri R. L. Jain, learned senior counsel with Ku. V. Mandlik, learned counsel for the Revenue. 7. Having heard learned counsel for the parties and having perused the record of the case, we are ....

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....observations which are subtle in their expression, we cannot hold that interest earned by an assessee is their business income. In the first place, it is not their main or ancillary business. Secondly, no memorandum of association is filed or relied upon to show that t0e assessee in addition to its main business of civil construction, etc., are also engaged in some kind of money-lending or deposit business with their surplus funds. We cannot ignore the pointed observations and/or findings of the Supreme Court quoted supra on the ground that it was made in altogether different context and, hence, the same is liable to be ignored. On the other hand, we are inclined to respectfully follow being a law laid down by the Supreme Court on the subje....