C.I.T. vs Siddharth Soya Products

None is appearing for the respondent and the appeal is pending for more than 10 years.

Notices have been sent by registered post acknowledgment due on 28.02.14 and, therefore, it is deemed to have been served on them.

This is revenue''s appeal under Section 260-A of the Income Tax Act and the appeal has been admitted for considering the following substantial question of law :-

�Whether the learned Tribunal was justified in holding that income earned by the assessee from short term deposits/loans is assessable under the head income from the business and profit in the facts and circumstances of the case particularly when the business of the assessee is production and distribution of veg-oil and D-oiled cake from Soya bean and sales there from ?�

The Income Tax Appellate Tribunal having decided the aforesaid issue by holding that the income earned by the assessee from short-term deposits and the loan is assessable under the Head income of business and profit. The question is as to whether this finding of the learned Tribunal is correct or not.

The question has been considered in detail by a Division Bench of this Court as early as in the year 1968 in the case of MADHYA PRADESH STATE INDUSTRIES CORPORATION LTD. Vs. COMMISSIONER OF Income Tax, M.P., and it has been held that interest on such deposit is taxable as income from other sources and not as business income.

Shri Sanjay Lal brings to our notice an order passed by a Co-ordinate Bench of this Court very recently on 29th April, 2013 in I. T. A. No. 238/12 wherein after following the principles laid down in the case of Madhya Pradesh Industries Development Corporation (supra), it has been held by a Co-ordinate Bench of this Court that such a question actually had already been answered in favour of the revenue in the aforesaid case and, therefore, the identical finding of the Tribunal was quashed.

We have gone through the findings of the Tribunal and by a Co-ordinate Bench of this Court in the case of M/s Bharat Oman Refineries Vs. Commissioner of Income Tax-I in I. T. A. No. 238/12 and we find that after referring to various judgments of the Supreme Court so also of the Bombay High Court, the order identical in nature of the Income Tax Appellate Tribunal has been set aside.

Having considered the matter so, we do not find any reason to take a different view. Accordingly, we answer the reference by holding that income from interest by the assessee in the present case is taxable as income from other sources and cannot be considered from business.

Accordingly, we answer the reference as indicated hereinabove.

The appeal stands allowed and the impugned order passed by the Tribunal is quashed.