CIT v. Dalmia Promoters Developers (P) Ltd.
INCOME TAX ACT, 1961
Business loss - Chargeability -Interest on fixed deposit
Assessee-company entered into agreement of real estate and as per said agreement, it received sum from its co-developers. It kept that sum in fixed deposit with bank. Thereupon, interest earned on said fixed deposit was claimed as business income. AO held that interest income could not be said to be incidental to real estate business, since it arose out of investment of surplus fund and therefore, it would be tax under head 'income from other sources'. Held:Income was held to be business income upon proper appreciation of the circumstances in which the amounts invested in term deposits were received by the assessee from the co-developers.
Income-tax Act, 1961, Section 28(i)
A.Y. :1993-94
Decision: In favour of assessee.
Case Law Analysis:CIT v. New Central Jute Mills Co. Ltd. [1979] 118 ITR 1005 /2 Taxman 246 (Cal.) [Para 3], CIT v. Ananda Bazar Patrika (P.) Ltd. [1987] 167 ITR 268 (Cal.) [Para 3], Collis Line (P.) Ltd. v. ITO [1982] 135 ITR 390 / 9 Taxman 129 (Ker.) [Para 3], Radhasoami Satsang v. CIT [1992] 193 ITR 321 / 60 Taxman 248 (SC) [Para 4], Director of Income-tax (Exemption) v. Apparel Export Promotion Council [2000] 244 ITR 734 / 112 Taxman 390 (Delhi) [Para 4], CIT v. A.R.J. Security Printers [2003] 264 ITR 276 / 131 Taxman 297 (Delhi) [Para 4], Hoystead v. Commissioner of Taxation [1926] AC 155 (PC) [Para 7], Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC) [Para 8], CIT v. Neo Poly Pack (P.) Ltd. [2000] 245 ITR 492 / 112 Taxman 363 (Delhi) [Para 9], Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT [1997] 227 ITR 172/ 93 Taxman 502 (SC) [Para 10] and CIT v. Autokast Ltd. [2001] 248 ITR 110/ 116 Taxman 244 (SC) [Para 10].