TaxTMI 
TaxTMI 
2008 (8) TMI 123
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....s not arise in appeal No.111/2007, inasmuch as appeal No.45/2006 arises out of appeal of the assessee filed before the tribunal, against invoking of the powers under section 263 of the Income Tax Act, while appeal No.111/2007 arises out of the regular appeal, filed by the assessee, with respect to the different year. But then the central question, about the entitlement of the assessee, to claim exemption under section 10B, on the interest income, earned from M/s Wolkem India Ltd. is involved in both the appeals, and therefore, these two appeals are involving common question of law. Bereft of unnecessary details, the necessary facts of appeal No.45/2006 are, that the assessee and Wolkem India Ltd. admittedly are sister concerns. The....
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.... from the interest in respect of other parties, without due enquiries. Reliance was placed on judgment of this Court in Murli Investment Co. vs. CIT (1987) 167 ITR 368, wherein the income derived from surplus fund was not considered to be business income. With these findings, it was concluded, that while considering the total taxability in respect of the different items, erroneous view was taken, without due enquiry regarding income of Wolkem India Ltd., and it is prejudicial to the interest of revenue. This order was challenged by the assessee before the learned Tribunal, on the ground, that the provisions of section 263 could not be invoked. Learned Tribunal found, that the AO has applied his mind to the facts of the case, and tr....
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....rned tribunal was in error, in granting exemption. Reliance on decision in Murli Investment's case was reiterated, to contend, that in the present case also, the interest was the yield of amount deposited by the assessee with the seller, and was independently received by the assessee, as interest, and therefore, it cannot be treated as business income, so as to entitle the assessee to exemption under section 10B. Assessee on the other hand supported the impugned order, by contending, that the income was the result of business transactions between the assessee and seller, and therefore, it clearly falls within the definition of "Profits and Gains" and therefore, the assessee was entitled to exemption under section 10B, and the same has ri....
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....me is sought to be covered only under section 14(F) which covers "income from other sources", which is defined as above under Section 56. Thus, from the above provisions, it is clear, that income from other sources, if falling within the definition of income, is taxable by virtue of section 14, and thus it is taxable income, but then, it is only one of the species of income, as defined in section 2(24). Clause (D) of section 14 is about the head "profits and gains of business or profession". Thus it is clear, that for all purposes, profits and gains of business or profession, and income from other sources, are treated, by the act to be different species of income. In this background, section 2(24) as such, does not categorise....