CIT Vs. TAJ INTERNATIONAL JEWELLERS

JUDGEMENT

(1.) Ms. Suruchi Aggarwal, Standing Counsel who appears on behalf of Mr. Abhishek Maratha is granted permission to place on record the correct assessment order (Annexure-A1 to this appeal).

(2.) This appeal which pertains to assessment year 2007-08 relates to issue of netting of interest paid of Rs. 1,85,62,489/- from the gross interest on Fixed Deposit Receipts of Rs. 2,64,79,712/-.

(3.) The assessee had availed of loan from a Bank and accordingly had paid the aforesaid interest. The loan amount was deposited and converted into Fixed Deposit Receipts as the respondent-assessee required them for opening letters of credit etc. The assessee had earned interest of Rs. 2,64,79,712/- on the said deposits and the same was shown under the head "income from other sources". As the assessee had also paid interest on the loan of Rs. 1,85,62,489/-, the same was reduced while calculating the taxable income under the head "income from other sources".