2016 (4) TMI 1391

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.... business income instead of income from other sources to the tune of Rs. 87,54,636/-. 2. That the appellant craves leave to add, alter/or amend any of the grounds of appeal during the course of hearing." 3. The Assessee is a company engaged in the business of manufacturing of various machineries. In the course of assessment proceedings AO noticed that the assessee has earned a sum of Rs. 87,54,636/- as interest on bank Fixed Deposits. AO was of the view that since the business of the assessee company was manufacturing of machinery, the said interest income cannot said to be connected with the business of the assessee and therefore had to be assessed as income from other sources. Accordingly the income of assessee was determined ....

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....he appellant company is an Enterprise wholly owned by the Government of West Bengal. The appellant has made fixed deposits which have been used for bank overdraft facilities for running various business activities. The Ld. A/R has explained that the present appeal is distinguishable from the facts in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. v. VIT, [1997] 227 ITR 172 (sq. In that case, the Hon'ble Supreme Court has decided that there could be no income from business as the business of the assessee-company did not commence. The Ld. A/R has relied on the decision in the case Chinna Nachimutha Constructions (supra) and various other decisions. The Ld. A/R has also explained that when deposits are made in connection to busi....

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....onsidered submissions of the learned DR. In our view the income in question has to be assessed under the head income from business. In this regard we find that it is not in dispute that the assessee had to invest funds in fixed deposits and offered them as security for the overdraft facilities it received from banks. The Hon'ble Bombay High Court in the case of Indo Swiss Jewels Ltd. (supra) had held that where interest is earned on inter corporate deposits made from surplus funds which are set apart for payment of imported machinery, the said interest income has to be assessed as business income. In the case of Koshika Telecom Ltd. (supra) the Hon'ble Delhi High Court has taken the view that where deposit of margin money by an asse....