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1 - 10 of 11 (0.37 seconds)Section 271B in The Income Tax Act, 1961 [Entire Act]
Section 44AB in The Income Tax Act, 1961 [Entire Act]
Section 80J in The Income Tax Act, 1961 [Entire Act]
Sterling Foods vs Commissioner Of Income-Tax, Karnataka on 1 June, 1984
In the case of Sterling Foods vs. CIT (1984) 150 ITR 292 (Kar), the Karnataka High Court made the following observation in regard to the meaning of the expression 'derived from' :
Collis Line Pvt. Ltd. vs Income-Tax Officer, A-Ward on 28 November, 1981
In the present case the surplus amount available out of the profit from the assessee's business was invested in two year Cash Certificates of Vijaya Bank. Interest accrued on such investments cannot be viewed as income from business. There is no direct nexus between the assessee's export business and the earning of the interest income. Interest accrued on the bank deposits could not be, therefore, treated as income arising from the business or incidental to the business. On the facts of the case, we find that the CIT(A) has rightly applied the ratio of the decision in Collis Line Ltd.'s case (supra) to the facts of the present case in upholding the assessment of the interest income under the head 'other sources'.
Section 80I in The Income Tax Act, 1961 [Entire Act]
Cochin Company vs Commissioner Of Income-Tax, Kerala on 14 March, 1967
The Kerala High Court had also the occasion to consider the meaning of the expression "derived from" in the case of Cochin Co. vs. CIT (1978) 114 ITR 822 (Ker). In that case the Court observed as under :
Commissioner Of Income Tax vs Madras Refineries Ltd. on 8 January, 1997
8. The learned counsel for the assessee has referred to the fact that in this case the AO had treated the interest amount of Rs. 2,31,596 as part of the gross receipts from business for the purpose of s. 44AB of the IT Act and also initiated action under s. 271B on the assessee. It was contended that after treating the interest amount as part of the gross receipts of the business, the AO was not correct in turning round to hold that interest was assessable not as business income but as income from other sources. Kesavan also placed reliance on the decision of the Madras High Court in the case of Madras Refineries Ltd. (supra) to contend that once interest on the bank deposit was treated as business receipt for the purpose of s. 44AB, it was assessable as business income only. In the case of Madras Refineries Ltd. the deposit made by the assessee in the bank was treated as part of the capital of the new industrial undertaking for working out the relief under s. 80J. The High Court held that any income earned by the capital employed would automatically become the business income of the assessee and it is not to be treated as income from other sources. In the present case it is true that a notice was issued by the AO under s. 271B of the IT Act on 24th December, 1991, calling for the assessee's explanation as to why their accounts had not been audited in accordance with the provisions of s. 44AB. In reply the assessee wrote to the AO on 16th January, 1992 that in the turnover of the business he had wrongly included certain receipts. Interest of Rs. 2,31,596 on the bank deposit was one of the items which the assessee had claimed as not includible in the turnover or gross receipts of the business for the purpose of s. 44AB. Though a notice under s. 271B had been issued by the AO, it appears that the proceedings had not been pursued. It is not the assessee's case that penalty had been levied under s. 271B rejecting their claim that interest on bank deposit was not includible in the turnover/gross receipt of the business. It may be that on the basis of the assessee's reply dt. 16th January, 1992, the AO accepted the plea that interest was not to be included as part of the business turnover or receipts. In any case merely because a notice was issued under s. 271B it would not be correct to contend that the AO had treated the interest as part of the business receipt and so he could not later assess the same as income from other sources. In view of the fact that the proceedings under s. 271B had not been pursued after the assessee had clarified the position through the letter dt. 16th January, 1992, we find that on the facts of this case, the ratio of the decision of the Madras High Court in the case of Madras Refineries Ltd. cited above is not applicable.
Commissioner Of Income-Tax vs Cochin Refineries Ltd. on 25 June, 1984
7. The learned Departmental Representative has brought to our notice another decision of the Kerala High Court in the case of Cochin Refineries Ltd. (supra) to contend that interest on bank deposit was not assessable as income from business. In that case Cochin Refineries Ltd. claimed deduction under s. 80-I in respect of interest on amounts deposited in banks and financial institutions for short periods for the purpose of repayment of loans on due dates. The amounts were so deposited as the loans were then not due for repayment. The High Court held that the amounts received as interest were receipts from other sources and not profits and gains attributable to the business of the assessee as a priority industry. In that case it was held as under :