2013 (4) TMI 929

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....confirmed by the ld. CIT(A) on account of interest income received by the assessee treating the same as chargeable to tax under the head "income from other sources". 2. The assessee in the present case is a partnership firm which carries on the business as builder and developer. The return of income for the year under consideration was filed by it on 29-9-2008 declaring total income of Rs. 58,93,845/.  During the course of assessment proceedings, it was noticed by the A.O. that the assessee has received interest on fixed deposits with bank amounting to Rs. 12,19,969/- and interest from private parties amounting to Rs. 4,16,369/-. The said interest received during the year under consideration as well as interest paid for the loans ta....

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....volves around the applicability of the ratio laid down by the Hon'ble Supreme Court in the case of Tutikorin Chemicals. Though the Ld. AR of the Appellant has tried to distinguish the facts of this case from the facts of the aforesaid case relied upon the AC, but I am not convinced with the grounds on which the Ld. AR has tried to distinguish his case from the case decided by the Apex Court. As regards the argument of the Appellant, that it has three different projects as against the only one line of operation i.e. manufacturing in the case before Supreme Court, it is noted that the assessee's business is also of only one activity i.e. construction, in a the three projects. Similarly, the other plea of the Appellant that it has shown profit....

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....m intending purchasers and temporarily  invested the surplus amounts with banks and other concerns and the interest earned by the assessee on the temporary deposits made out of surplus funds was held to be business income by the Hon'ble jurisdictional High Court which could not be assessed as "income from other sources".  Since the facts involved in the present case are almost similar to the case of Lok Holdings (supra), we respectfully follow the decision of the Hon'ble jurisdictional High Court rendered in the said case and hold that the interest income in question received by the assessee is chargeable to tax under the head "profits and gains of business or profession" for the year under consideration and not under the head "in....