HARKRISHEN SINGH TULI,CHANDIGARH vs. INCOME TAX OFFICER, WARD 1(3), CHANDIGARH

ITA 785/CHANDI/2024Status: DisposedITAT Chandigarh16 December 2025AY 2017-18Bench: SHRI LALIET KUMAR (Judicial Member), SHRI KRINWANT SAHAY (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that interest earned on FDRs invested from business dues transferred to personal accounts is 'Income from Other Sources' and not 'Business Income'. It also held that legal expenses are not deductible under Section 37, and indexation benefits are not applicable to such interest income.

What were the facts?

The assessee, a legal heir, received arbitration awards of Rs. 6.88 Crores which were initially in the company's account, then transferred to personal FDRs. The AO treated the interest earned on these FDRs as 'Income from Other Sources' and also added back a salary amount. The CIT(A) confirmed the AO's order.

What were the issues?

Whether interest income from personal FDRs invested with business funds is 'Business Income' or 'Income from Other Sources', deductibility of legal expenses, and applicability of indexation to interest income.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 56(1),Section 44AD,Section 37,Section 57(iii),Section 56,Section 48,Section 2(13)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI KRINWANT SAHAY

For Appellant: Shri Harkrishen Singh Tuli, Assessee
For Respondent: Shri Vivek Vardhan, Addl. CIT Sr.DR
Hearing: 16.12.2025Pronounced: 16.12.2025

PER LALIET KUMAR, JM

This captioned appeals have been filed by the assessee against the separate orders of the ld. Commissioner of Income Tax (Appeals) NFAC, Delhi (hereinafter referred to as the " CIT(A)"), dated 29.06.2024 for the Assessment Years 2012-13, 2017-18 and 2020-21. 2. As the facts, issues and circumstances in all the appeals are identical, therefore, all the appeals were heard together and are ITA 784, 785 & 786/CHD/2024 2

being disposed of by a common order for the sake of convenience. To dispose of the appeals, the facts are bein

The order continues below.

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