9911796707
TMI Blog2017 (6) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... deposits and loans could only be taxable as “business income”. (ii) Interest paid on overdraft obtained for the purpose of business cannot be deducted from the interest earned on monies kept in fixed deposits as such income derived by way of interest on fixed deposits has to taxed under the head “income from other sources”. (iii) However, though the assessee may not be entitled to have interest paid by it on the overdraft to the bank, deducted from the interest received by it on the short term fixed deposits, the assessee is entitled to deduction of the same from its business income. Facts being similar, we follow the ratio laid down in the case of South Indian Shipping Corporation Ltd. [1998 (2) TMI 43 - MADRAS High Court] and hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis and without giving any evidence. It is apparent that appellant has not carried on any other activity as envisaged by Ld. CIT(A). 3. Briefly stated, the facts are that the assessee filed its return of income for the A.Y. 2010-11 on 09.10.2010 declaring total income at ₹ 2,35,87,146/-. The nature of business of the assessee is trading in shares. On perusal of the P L account of the assessee, the Assessing Officer (AO) found that the assessee has offered ₹ 4,83,58,212/- as other income. It consists of ₹ 47,00,725/- earned as Long Term Caplital Gains(LTCG) on shares which has been claimed as exempt u/s 10(38); ₹ 39,64,181/- being interest received from auto sweep term deposit with Kotak Mahindra Bank, fixed depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO as it was not attributable to earning interest income from fixed deposits etc. 5. Before us, the Ld. Counsel of the assessee filed in paper book containing a copy of the submission made before the AO and the Ld. CIT(A). He also filed a copy of the order of the ITAT A Bench, Mumbai in the case of M/s Kalpana Trading Corporation vs. ITO (ITA No. 6024 6025/Mum/2010). 6. The Ld. D.R. relied on the order of the Ld. CIT(A). 7. We have heard the rival submissions and perused the relevant material on record. We begin with the order in the case of M/s Kalpana Trading Corporation (supra) relied on by the Ld. Counsel of the assessee. In that case the grievance of the assessee was against the action of the Income-tax authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest received on short term bank deposits. The Income-tax Officer treated the income received by the assessee by way of interest on bank deposits as being taxable under the head Other sources . The interest paid by the assessee on overdrafts obtained by it were treated by him as expenditure incurred for the purpose of business and was given deduction under that head accordingly. In appeal, the treatment so accorded to the income received by the assessee by way of interest was affirmed by the Commissioner. The Commissioner also affirmed the view of the Income-tax Officer that the interest paid on overdrafts is only to be treated as expenditure for the purpose of business. The Revenue and the assessee having carried the matter in appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
