Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business income - Chargeable as - Whether where assessee had invested certain amount in fixed deposits to secure a bank guarantee in order to acquire a contract work, interest accrued on such fixed deposits was to be treated as its business income - Held, yes CASE REVIEW CIT v. Govinda Choudhury & Sons [1993] 203 ITR 881/[1994] 74 Taxman 331 (SC), followed. [Para 4]. CASE REFERRED TO CIT v. Govinda Choudhury & Sons [1993] 203 ITR 881/[1994] 74 Taxman 331 (SC) [Para 4]. JUDGMENT K.L. Manjunath, J. - This appeal is by the revenue challenging the order passed by the Income-tax Appellate Tribunal, Bangalore dated 28-3-2002, whereunder, the Tribunal has confirmed the order passed by the Assessing Officer. 2. The question of law raised by the revenue in this appeal is whether the interest accrued on the deposit made by the assessee to avail of the bank guarantee has to be treated as income from the business or from other sources. 3. Heard learned counsel for both the parties. It is not in dispute that the assessee being a contractor in order to secure a contract work was required to offer a bank guarantee to the KPTCL. It is not in dispute that in order to avail of the bank guarantee, certain…

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