Commissioner of Income-tax-1 Vs. Green Infra Ltd.

Section 68 of the Income-tax Act, 1961 - Cash credit (Share capital) - Assessment year 2011-12 - Assessee-company offered to sell its shares - Identity of subscribers was confirmed by virtue of Assessing Officer issuing notices to them - Genuineness of entire transaction was recorded in books of account and reflected in financial statements of assessee-company since subscription was done through banking channels as evidenced by bank statements - Tribunal examined case of revenue on parameters of section 68 and found on facts that it was not hit by said section - Whether since revenue was not able to show that factual finding recorded by Tribunal was perverse, no substantial question of law arose - Held, yes [Para 3(c)] [In favour of assessee]

Section 28(i) of the Income-tax Act, 1961 - Business income - Chargeable as (Interest) - Assessment year 2011-12 - Assessee had earned interest income on fixed deposits which were kept in bank for short duration awaiting use of funds in its business operation - Said income was shown under head 'profit and gains of business' - Assessing Officer was of view that assessee had not commenced its business nor was it in business of money lending; therefore, interest on bank fixed deposit would be taxable as income from other sources and not as business income - Finding of Tribunal was that business of assessee had commenced and, thus, interest earned on short term fixed deposits was taxable as business income - Whether considering short duration for which amounts were kept in fixed deposit awaiting use in its business operations would necessarily mean income earned on account of business - Held, yes [Para 4(e)] [In favour of assessee]