Commissioner of Income Tax vs Intra Port India

Badar Durrez Ahmed, J.—After hearing Counsel for the parties, it is apparent that the issue sought to be raised in the present appeal is covered in favour of the Revenue and against the assessee, by virtue of the decision of this Court in the case of Rishi Dev Batra Vs. Dr. (Mrs.) Anup Suri Consequently the Revenue�s appeal on this ground is allowed and the impugned order to that extent is set aside. We may note that in Shri Ram Honda Power Equip (supra), this Court had made the following observation and direction:

We are, therefore, of the view that where surplus funds are parked with the bank and interest is earned thereon it can only be categorized as income from other sources. This receipt merits separate treatment u/s 56 of the Act which is outside the ring of profit and gains from business and profession. It goes entirely out of the reckoning for the purposes of Section 80HHC. To give effect to this position, the Assessing Officer while computing profits of the export business will have to remove from the debit side of the profit and loss account the corresponding interest expenditure that has been �laid out� to earn such income from other sources. Otherwise this will depress the profits by an amount which is out of the reckoning of Section 80HHC, a consequence not intended to be brought about.

The same direction would apply in this case also.

The appeal stands disposed of.