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ITAT: FDR Interest Classifiable as Other Income Not Business

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Arpit Kulshrestha

Mumbai ITAT's Order for Ms Skyline Prashasti

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) stated the interest obtained via fixed deposit receipt (FDR) would get taxed and not as income via the business but as additional income in Income Tax Act 1961.

In the request to the ITAT Shri Mahaveer Jain and Shri Charmi Shroff emerged as the petitioner and Shri Pitta Samuel emerged for the revenue. In the instant case, the two appeals arose on the identical facts disposed of together via ITAT.

On the first petition in which the petitioner is M/s Skyline Prashasti who was involved in the business of development of immovable properties via constructing buildings, and the respondent is CIT (A).

Read Also:- ITAT: Tax Portal Not Imaged Notice & Demand U/S 143(1), No More Addition

Towards the case, the taxpayer has deducted the sum of Rs 1,27,160 beneath the interest obtained on the FDR claiming the deduction beneath the business income.

The AO has a concern that the interest made on FDR needed to be assessed u/s 57 of the income tax Act 1961, as income via additional sources. AO assessed the mentioned interest in FDR beneath the head, the other source income as claimed via taxpayer as the income via business.

The CIT(A) laid on the order of AO and the taxpayer has furnished the petition to ITAT.

Read Also:- ITAT Mumbai: NIL Income Tax on Foreign Gains Starting Toward Loan

Refusing the petition the bench, Shri Amarjit Sing (Accountant Member), and Shri Sandeep Sing Karhail (Judicial member) sees that the interest obtained via FDR was subjected to tax since the additional income related to a case in which the taxpayer himself was a party. The tribunal also refused the petition furnished via the revenue.

Case Title M/s Skyline Prashasti vs Deputy Commissioner of Income Tax
Citation ITA Nos.1964/Mum/2021
Date 12.10.2022
Appellant by Mahaveer Jain & Charmi Shroff
Counsel For Respondent Pitta Samuel
Mumbai ITAT Read Order

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Published by Arpit Kulshrestha

Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous.
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