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TMI Blog2013 (12) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... (9) TMI 30 - CALCUTTA HIGH COURT] - The amendment to the second proviso to the Sec 43(B) of the Income Tax Act, as introduced by Finance Act, 2003, was curative in nature - It is applicable retrospectively with effect from 1st April, 1988 - Such being the position, the deletion of the amount paid by the Employees' Contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act - Decided against Revenue. Interest income - Held that:- The interest income as liable to be assessed only under the head 'profits and gains of business' and that too only the net of the interest - The assessee is carrying on the business for past several years - In the course of carrying on of its business, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court against the decision of Calcutta High Court in the case of AFT Industries Ltd. -vs- CIT (270 ITR 167) in the light of which Ld.CIT(A) decided the issue in favour of the assessee. 2. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in directing the A.O. to allow Rs.65,508/- Rs.41,166/- on account of employees' contribution to P.F. since the decision of the ld. CIT(A) is in contravention with section 36(1)(va). 3. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in allowing the claim of the assessee regarding interest income for Rs.24,35,797/- as income under the head 'profit gains of business' without appreciating the fact that interest income is not agri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s squarely covered by the decision of the Jurisdictional High Court in the case of CIT vs M/s.Vijay Shree Limited in G.A.No.2607 of 2011 dated 6th September, 2011 where the Hon'ble Jurisdictional High Court has followed the decision of the Hon'ble Supreme Court in the case of CIT vs Alom Extrusion Ltd. reported in 390 ITR 306 to hold that the amount paid by the employees contribution beyond the due date was deductible. 7. We have considered the rival submissions. As it is noticed that the issue in ground no.2 of the Revenue's appeal is squarely covered by the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs M./s Vijay Shree Limited referred to supra we are of the view that the decision of the ld. CIT(A) on this issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ckground, the Hon'ble Supreme Court held that as no business was admittedly commenced and the assessee earned interest on Bank deposits met out of surplus capital subscription and such income not having any connection with the setting up of the business was liable to be assessed as revenue receipts under the head 'other sources'. The position was more or less same in the case of CIT -vs- South Indian Shipping Corporation Limited (Supra). But in the instant case, the assessee is carrying on the business for past several years. In the course of carrying on of its business, the assessee borrowed funds on which interest is paid. Similarly on occasions, the company left with surplus business funds, which were deployed in making short-term inter- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this case, the interest accrued on short- term deposits of the assessee company which was met out of business funds available with the assessee-company, before the same were utilized for actual business, and as such the same is incidental to the business activity of the assessee-company and as such, the interest on short-term deposits shall be treated as business income. 33. The Hon'ble Jurisdictional Kolkata High Court in the case of CIT -vs- Tirupati Woollens Mills Limited (193 ITR 252) observed that where an assessee carrying on business, invests surplus cash lying with him temporarily in the Bank deposits, the interest earned on such deposits is out of the commercial assets of his business and, therefore, is assessable as 'busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed -vs- DCIT, vide its order dated 24th December, 2001. 37. In view of the above discussion, we do not find any infirmity in the order of the ld. CIT(A) in holding that on the peculiar facts and circumstances of the present case, the interest income was business income and the A.O. was not justified in treating the same as income from other sources." He vehemently supported the order of ld. CIT(A). 11. We have considered the rival submissions. A perusal of order of the Co- ordinate Bench of this Tribunal in the case of JCIT vs M/s. Duncan Agro Industries Ltd. in paras 30 to 37 as extracted clearly show that under similar circumstances the Co-ordinate Bench of this Tribunal has held the interest income as liable to be assessed only und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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