URBAN STANISLAUS COMPANY Vs. COMMISSIONER OF INCOME TAX
HIGH COURT OF KERALA
Urban Stanislaus Company
COMMISSIONER OF INCOME TAX
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JAWAHAR LAL GUPTA, J. -
(1.) HAS the Tribunal erred in taking the view that the amount of Rs. 5,34,572 earned by way of interest by the assessee was income from other sources and thus could not be included under Section 80HHC of the IT Act, 1961? This is the short question that arises for consideration in this appeal under Section 260A of the Act. A few facts may be noticed.
(2.) THE assessee is engaged in the business of exporting cashewnuts. During the asst. yr. 1993 -94, the assessee had earned an interest of Rs. 5,34,572 on the fixed deposits. The assessee claimed that the amount of interest was to be considered as income from business and not under other sources. The assessing authority rejected it. On appeal, the order of the assessing authority was reversed. However, the Revenue's claim was accepted by the Tribunal. Hence, this appeal.
Mr. Kochunni Nair contends that the appellant had taken loan from the bank. 20 per cent of the sale proceeds had to be deposited by way of security for the loans. Thus, the interest earned on the fixed deposits was income from business and not from the other sources.
(3.) A perusal of the order of assessment passed by the AO shows that the assessee had claimed a carry forward of business losses amounting to Rs. 91,13,180. Still further, the assessee had claimed 'a sum of Rs. 20,350 towards deduction under Section 80HHC(1A)........'. After consideration of the matter, the AO had found that deduction under Section 80HHC(1A) can be claimed only in respect of the amount for which the prescribed certificate as contemplated under Clause (4) had been furnished. Still further, the assessee's claim that the amount of interest viz., Rs. 5,34,572 represented the income from business was not sustained.;
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