2008 (5) TMI 198

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....ber 29, 1999, passed by the Income-tax Appellate Tribunal, Chandigarh (in short "the ITAT"), in I. T. A. No. 999/Chandi/92. 3. It appears the assessee filed return for the assessment year 1989-90 which was assessed on August 24, 1999, by the Income-tax Officer thereby assessing interest on short-term deposits received by the assessee as income from other sources and assessed the assessment under section 56 of the Act. As such the interest of Rs. 3,09,586 received during the period was assessed to tax. 4. The assessee had claimed that no business activity was being done by him and only construction work and installation of machinery was done during the assessment year in question and all the expenses incurred on it has been capitalized....

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....erest could not be treated as income from other sources. 6. In the facts and circumstances the appeal under section 260A of the Act has been preferred by the Commissioner of Income-tax, Shimla on the following substantial question of law: "Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the assessee had correctly claimed adjustment and that amount of Rs. 3,09,586 received as interest could not be treated as income from other sources under section 56 of the Income-tax Act ?" 7. During the course of arguments, it has been submitted that the issue in question could be dealt with in view of the decision of the Supreme Court in Tuticorin Alkali Chemicals and Fertiliz....