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Interest Income from Capital Gains Bonds is Taxable as ‘Other Income’

In the case of Sonega Trades & Investments Private Limited vs. Income Tax Officer, Mumbai bench of Income Tax Appellate Tribunal (ITAT) recently held that interest income earned from capital gains bonds would be taxable under the head other income and the same cannot be taxed as business income. 

The assessee, a resident engaged in the business of warehousing and letting out of House Property has filed its return of income for the relevant assessment year and declared loss of Rs. 12,53,864. 

During the course of assessment proceedings, the Assessing Officer (AO) noticed that during the year the assessee earned interest of Rs.2.97 Lakhs from Capital Gains Bonds which was treated as business income and certain other miscellaneous income aggregating to Rs.48,407 was also claimed as business income. 

While completing the assessment proceedings the AO assessed all the said incomes under the head income from other sources. 

Article referred: http://www.taxscan.in/interest-income-capital-gains-bonds-taxable-other-income-itat/17365/

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