2011 (2) TMI 1573

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....espondent. Judgment Ramachandran Nair,  Two questions are raised for our decision in the appeal arising from the orders of the Income Tax Appellate Tribunal, Cochin Bench. The first question is whether interest received from deposits held with banks is income from business or from other sources. The second question relates to the proportionate disallowance of interest paid on funds b....

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.... lakhs. In fact, the total income of the assessee works out only little over Rs.12.23 lakhs. If the R.B.I. requires a non-banking financial company to maintain deposits with the bank, probably it may be a business activity. In that event, interests therefrom could be treated as business income. However, the assessee has not put up such a case before the Assessing Officer when he proposed to assess....

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....er it is income from other sources. 3. The next issue relates to disallowance of interest for the funds diverted for investments in shares and immovable properties. It is not known whether the assess earned any income in trading of shares or in the purchase and sale of real estate. If the assessee is engaged in long term investments which is revealed from the assessee's statement before the....