Law: Income Tax Ordinance, 1979

Section: 15,30

[Income Tax Ordinance (XXXI of 1979)].....Section 15---Business income---Commercial expediency---"Interest on investment"---To earn interest on "investment" is distinct from earning interest in "deposit"---Earning of interest by assessee, who had obtained loan for setting up an industry, and would have been manufacturing the product when it might have started the production was not to be deemed an "income from business" on the principle of commercial expediency. (b) Income Tax Ordinance (XXXI of 1979) S.15---Classification of income under S.15, Income Tax Ordinance, 1979---Criterion---Sole criterion to classify the income under S.15, in ordinary course, is the source and/or the nature of activity and conduct wherefrom and/or whereby the particular income is being generated---As long as the sources can be factually found, circumstances seldom have any bearing on the characteristic of the income. (c) Income Tax Ordinance (XXXI of 1979) Ss.30 & 15---Classification of income---"Income from business"---"Income from other sources"---Interest earned by an assessee who deals in money as stock-in-trade is "income from business", but such income cannot be anything but "income from other sources" for an assessee who has earned it on money held as capital, irrespective of the fact that it is borrowed or contributed by proprietor/director/partner/sponsor or shareholder---Interest income is assessable as "income from other sources" in circumstances. CIT v. A.P. Industrial Infrastructure Corpn. Ltd. (1989) 176 ITR 361; Madhya Pradesh State Industries Corpn. Ltd. v. C.I.T., (1986) 69 ITR 824 (M.P.); Traco Cable Company Ltd. v. C.I.T. (1969) 72 ITR 503 (Kar. H.C.); Collis Line (Pvt.) Ltd. v. C.I.T. (1982) 135 ITR 390; CIT v. Bihar Alloy Steels Ltd. 1995 PTD 1189 (14.C. Patna); C.I.T., N.-W.F.P. v. N.-W.F.P. Forest Development Corporation 1990 PTD 178; CIT, Dacca v. Liquidator, Khulna-Bagerhat, Railway Company Ltd. 1962 PTD 415; PLD 1961 Dacca 108; C.I.T. v. Hindustan Electro Graphites Ltd. 1991 PTD 252; CIT v. Bihar Alloy Steels Ltd., 1994 206 ITR 351; Addl. CIT, Madras v. Madras Fertilizers Ltd. 1990 122 ITR 139; CIT v. Maglam Cement Ltd. 1996 217 ITR 369; Madhya Pradesh…

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