Commissioner of Income Tax vs Rajesh Rakheja

The matter has been called out twice but there is no appearance on behalf of the assessed.

2.The following substantial questions of law are framed for consideration:

Whether the interest earned by the assessed on Fixed Deposit Receipts should be assessed under the head "Business Income" or "Income from other sources"?

Whether the Income Tax Appellate Tribunal was correct in law in holding that only 90 per cent of the interest is to be excluded from the profits of the business as per Explanation (baa) to Section 80HHC of the Income Tax Act, 1961, even if the interest is assessed under the head ''Income from other sources'' ?

Filing of paper books is dispensed with and the appeal is heard finally.

Learned Counsel for the revenue has drawn our attention to the judgment of this Court in Rishi Dev Batra Vs. Dr. (Mrs.) Anup Suri ''. On a perusal of the said decision, we are of the opinion that the above questions are covered by it.

The income earned by the assessed from FDRs is required to be assessed as income from other sources. The said income is Therefore outside the purview of Section 80HHC of the Act and 100 per cent of the interest is required to be excluded from the profits of the business in terms of Explanation (baa) to Section 80HHC of the Act.

The order passed by the Tribunal is accordingly set aside. The appeal is allowed.