Interest received from FDR Taxable as ‘Other Income’: ITAT [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that the interest received from fixed deposit receipt (FDR) is taxable not as income from the business but as other income in Income Tax Act 1961.

In the appeal before the ITAT Shri Mahaveer Jain and Shri Charmi Shroff appeared for the appellant and Shri Pitta Samuel appeared for the revenue.

In the instant case 2 appeals arose on the same facts disposed of together by the ITAT. On the first appeal where the appellant is M/s Skyline Prashasti who was engaged in the business of development of immovable properties by constructing buildings, and the respondent is CIT (A).

In the instant case, the assessee deducted a sum of One lakh twenty-seven thousand one hundred and sixty (1,27,160/-) under interest received on FDR claiming a deduction under income from the business. The A.O. was of the view that interest earned on FDR was required to be assessed u/s 57 of the income tax Act 1961, as income from other sources. The A.O. assessed the said interest on FDR under the head, Income from other sources as against claimed by the assessee as income from the business. The CIT (A) relied on the order of A O. And the assessee filed an appeal before ITAT.

 Dismissing the appeal the bench of comprising of, Shri Amarjit Sing (Accountant Member), and  Shri Sandeep Sing Karhail (Judicial member) observing that the interest received from FDR was taxable as other income referring to a case where the assessee himself was a party. The tribunal also dismissed the appeal filed by the revenue.

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