TaxTMI 
TaxTMI 
2019 (5) TMI 1825
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....gaged in the business of distribution of films, film production, film finance, media campaign, exports of films, service projects including subtitling, hiring of equipments, video studio etc., filed its return of income for the assessment year under consideration declaring nil income. Since the case was selected for scrutiny the AO issued notice u/s. 143(2) and 142(1) of the Act. In response to the said notices the Authorised Representatives (AR) of the assessee appeared before the AO and submitted the details called for and also discuss the case. The AO completed the assessment u/s. 143(3) of the Act, determining the total income of the assessee at Rs. 4,95,21,970/- and after making adjustment of brought forward loss the AO determined the ....
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....s per the audited report the nature of business of the assessee consists of distribution of film, film production, film finance, media campaign, exports of films, service projects including subtitling, hiring of equipments, video studio etc., therefore the FDR's is not part of parcel business activity. Hence, the interest income earned by the assessee from the deposits made is to be taxed under the head income from other sources. The Ld. DR further submitted that judgment of the Hon'ble Bombay High Court in the case of CIT vs. Lok Holdings 308 ITR 356 (Bom) and CIT vs. Paramount Premium P. Ltd., 190 ITR 259 (Bom) are not applicable to the facts of the present case. Since the AO has rightly treated the income in question under the head incom....
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....ith various banks. According to the A.O., such income should be taxed as income from other sources whereas, according to the appellant, this income should be taxed under the head "Income from Business or Profession". Here, it is pertinent to mention that this is not a simple case where idle money has been parked in FDRs and interest income has been earned. Here is the case where idle money has been made productive and safe because the appellant company is a Government of India's Enterprise under the administrative control of the Ministry of Information and Broadcasting. The Government of India is a 100% shareholder of the appellant company. The object of the Corporation is to plan, promote, organize and integrate the activities of devel....
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....stry. Further, there is lots of complications, activities and techniques related to production of films, hence such advances could not be utilized immediately. Therefore, with a view to safeguard the advances and make it productive, such advances have been ordered to be kept by the Bank as fixed deposit so that appellant can earn the interest and as and when payments are required to be made in respect of production of such films, such money can be withdrawn immediately. The duration of deposit reveals the fact that such FDRs are not for longer period but for short duration. With a view to make this point more clear, it becomes necessary to point out the factual aspects so that a general approach for taxing interest income earned on FDRs as ....
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....ited with Bank of India for production of short film for National Disaster Management Authority and Environment and Forest Department. These facts prove that such advances received from various Governmental Department/Ministry or for business purposes and only for time gap arrangement, such advances have been deposited on short-term basis to make them productive, hence unlike general assessee, the case of the appellant has to be reviewed in the facts and circumstances of the case. Since the entire advances received could not be immediately utilized on receipt, the surplus amount temporarily parked with the bank yielding interest is the income which can be regarded from the business activities and not as income from other sources because in ....
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.... Development Corporation Ltd. 216 ITR 535, 542 (Mad.), the Hon'ble Madras High Court has held that interest on short-term deposit, requirement of utilization of such advances for specific purposes which occurrence is always in future as there is a requirement of production of film which takes time and also considering the decision of Hon'ble Jurisdictional High Court giving the propositions which supports the case of the appellant, the A.O. is directed to treat the amount of Rs. 2,55,14,206/- as being interest income as income from business and profession and not as income from other sources." 8. We have gone through the findings of the Ld. CIT(A) passed in the assessee own case for the AY 2011-12. The Ld. CIT(A) has held that in c....