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TMI Blog2018 (2) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... vity during the pick season of crops. Thus, the funds which could not be utilized during the slack season and therefore was not immediately needed were kept in bank deposits including FDR - the interest on the FDR has direct nexus with the business activity of the assessee. As relying on case of CIT vs. Lok Holding [2008 (1) TMI 365 - BOMBAY HIGH COURT] CIT-A as not erred deleting the disallowance - Decided against revenue - ITA No. 1020/JP/2017 - - - Dated:- 21-2-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri C.L. Yadav (C.A.) For The Revenue : Shri Ram Singh (Addl. CIT) ORDER PER: VIJAY PAL RAO, J.M. This appeal filed by the Revenue is directed against the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed the claim of the assessee and deleted the addition of ₹ 1,37,629/-. 3. Before us, ld. DR has submitted that the assessee has admittedly parked its surplus funds in the bank deposit and therefore, the interest on the FDR cannot be treated as income of the assessee for the purpose of remuneration given to the partners. He has relied upon the order of the Assessing Officer. 4. On the other hand, ld. AR of the assessee has submitted that since the business of the assessee is depending upon the crop season and therefore, during the lean period the funds available with the assessee was kept in FDR which is a temporary deposit in the bank. Further, some part of the FDRs were made only for availing overdraft facility for running th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... muneration to the partners. Accordingly, the addition of ₹ 1,37,629/- is deleted. Thus, the funds which could not be utilized during the slack season and therefore was not immediately needed were kept in bank deposits including FDR. The Hon ble Bombay High Court in case of CIT vs Lok Holding (supra) while considering the identical issue has held in paras 5 to 8 as under:- 5. In our view, the facts of the present case are completely different than the facts in the case of Tuticorin Alkali Chemicals Fertilizers Ltd. (supra). In that case, the business of the assesseecompany had not commenced and, therefore, the Apex Court held that there could be no income from business. 6. Apart from this, the business of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the aforesaid interest was assessable as income from business and affirmed the correctness of the view of the Tribunal that the interest so earned was Income from business . In our view, the law as laid down in Paramount Premises (P.) Ltd.'s case (supra) is squarely applicable to the facts of the present case. 8. The advocate for the assessee also brought to our notice a judgment of the Apex Court in the case of CIT v. Bokaro Steel Ltd.[1999] 236 ITR 315. In that case, the assessee-company was in the business of manufacturing of steel. For the purpose of construction of the plant the company gave advances to its contractors and earned interest from such advances, which were adjusted against the charges payable to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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