COMMISSIONER OF INCOME TAX Vs. MADRAS REFINERIES LIMITED

JUDGEMENT

(1.) AT the instance of the Department, the Tribunal referred the following question, for the opinion of this Court, under S. 256(1) of the IT Act, 1961, hereinafter referred to as the "Act" :

(2.) THE assessee, M/s Madras Refineries Ltd., is a public limited company, carrying on business in refining of petroleum products. The assessment year involved in this case is 1974 -75 in respect of which the previous year ended on 30th June, 1973. During the course of the assessment, the assessee claimed relief under S. 80J of the IT Act, 1961. During the course of the assessment proceedings, for the asst. year 1974 -75, the assessee received a total sum of Rs. 29,73,601 as interest in the following manner : The assessee claimed that this interest income is to be regarded as part of its business income. The ITO treated it as income from 'other sources'. According to the ITO, interest received was directly relatable to deposits made in the banks and such interest must be taken as income under the head 'other sources' and there was no scope to consider it as profit derived from industrial undertaking.

(3.) BEFORE us, the learned junior standing counsel appearing for the Department submitted that the assessee is doing business in refining of petroleum products. Moneylending or financing is not the . . Rs.