2002 (9) TMI 856 - AT - Income Tax

Summary

Issues:
1. Treatment of interest received from a bank as income from business or other sources.
2. Deduction of net interest for arriving at business profits.
3. Allowance of depreciation on office premises and factory building not claimed by the assessee.

Analysis:
1. The first issue pertains to the treatment of interest received from a bank as income from business or other sources. The Tribunal referred to precedents set by the jurisdictional High Court and decided in favor of the Revenue, stating that the interest should be treated as income from business and not 'other sources'.

2. Regarding the deduction of net interest for arriving at business profits, the Tribunal relied on a previous decision and directed that credits and debits of the same nature should be netted out to avoid profit distortion. Consequently, the issue was decided in favor of the assessee and against the Revenue.

3. The final issue involved the allowance of depreciation on office premises and factory building not claimed by the assessee. The Tribunal considered relevant precedents and highlighted that the benefit of depreciation cannot be forced upon the assessee if they choose not to claim it. Citing legislative amendments and judicial interpretations, the Tribunal ruled in favor of the assessee, emphasizing that a privilege cannot be turned into an obligation. The Tribunal concluded that the issue should be decided in favor of the assessee and against the Revenue.

In summary, the Tribunal partially allowed the Revenue's appeal, ruling on various issues related to income treatment, profit calculation, and depreciation allowance, based on legal precedents, legislative amendments, and judicial interpretations.