TaxTMI 
TaxTMI 
2018 (6) TMI 1725
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....ng total income at NIL. The case was selected for scrutiny and accordingly notice u/s. 143(2) was served upon the assessee. The Assessing Officer (A.O) completed assessment u/s. 143(3) on 28/03/2014, determining total income at Rs. 61.28 lakhs. 2.Effective ground of appeal is about deleting the addition made by the AO under the head income from other sources. During the assessment proceedings, the AO found that the assessee had shown interest on fixed deposits under the head income from business. He directed it to explain as to why the interest income should not be taxed as income from other sources. After considering the submission of the assessee he held that as per the Audit Report the nature of the business of the assessee consisted of....
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....ation and Broadcasting, Department of Land resources, Ministry of Environment and Forests, District water and Sanitation Department, that advances were received for production of films regional language films for restoration of various regional films as per policy of 11th 5-year plan, that various advances were received by it for the business purposes, that for production of such films adequate time was required, that there were lots of complications activities and techniques related issues for production of films that the advances received by it could not be utilised for that reason, that with a view to safeguard the advances the company decided to deposit the money with the banks that a general approach for taxing interest income earned o....
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....income, that interest income was rightly assessed as income from other sources. He relied upon the cases of Tuticorin Alkali Chemicals (227 ITR72) and Sangam Power Generation (Income tax Appeal No.87of 2016,dtd.31.08.2017) of the Hon'ble Allahabad High Court. The Authorised Representative(AR) relied upon the order of the FAA and stated that there was direct link between the business of the assessee and the interest income that the advances received from various governmental agencies were utilised in an efficient manner for a limited period. He relied upon the cases of Lok Holdings( supra). 5.We have heard the rival submissions and perused the material before us. We are of the opinion that considering the facts that assessee's business -pro....
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....ting unutilized and surplus money by the assessee to earn interest and therefore the interest earned by the assessee cannot be assessed as Income from other sources. 5.1. Here,we would like to refer to the case of Lok Holdings(supra).Facts of the case are that the assessee was engaged in construction business and received monies from the purchasers of flats which it deposited with the bank. The AO assessed the interest income earned on money deposited with the bank as income from other sources. The FAA deleted the addition. The Tribunal on finding that the entire interest sprang from the business activity of the assessee and not out of any independent activity, held that the interest income received by the assessee was business income. Dis....