Commissioner of Income Tax vs Venad Conductors (P.) Ltd.

C.N. Ramachandran Nair, J.—This appeal is filed by the revenue against the order of the Tribunal refusing to entertain the appeal filed by the revenue on the ground that, the tax effect of the disputed issue involved is less than 2 lakhs. Even though the modified instruction in this regard is dated 24-10-2005 the standing counsel pointed out that as per CBDTs earlier Instruction No. 279/ 126/98-ITJ (Instruction No. 1979), dated 27-3-2000, the appeal filed by them before the Tribunal is maintainable because where Revenue Audit Objection in the case has been accepted by the Department, the matter should be contested irrespective of tax effect.

In this case the question arising is whether the interest earned being interest on deposit is income from other source as against the treatment by the assessee as income from business. The issue raised is squarely covered by a decision of this Court in Nanji Topanbhai and Co. Vs. Assistant Commissioner of Income Tax and Others, . In fact there are several decisions of this Court and the Supreme Court holding that interest on short-term deposits cannot be treated as income from business. In the circumstances, this appeal is allowed by reversing the order of the Tribunal and restoring the order issued by the Assessing Officer u/s 154 of the Income Tax Act. Even though counsel for the assessee stated that the matter should be sent back to the Tribunal, we find that the Tribunal has already considered the case on merits as well and a remand of this matter is an absolute waste of time. Therefore we decline this request and allow this appeal following the judgments referred above by reversing the order of the Tribunal and restoring the order passed by the Assessing Officer u/s 154 of the Income Tax Act.