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“income from other sources”

Income HeadsSection 56Section 568,248 judgments

The decision most relied on for income from other sources is Jute Corporation of India Ltd. v. CIT (187 ITR 688), cited in 1,372 judgments on BharatTax.

Leading authorities on income from other sources

Jute Corporation of India Ltd. v. CIT
187 ITR 688 · 1991 · Supreme Court
1,372
citing judgments

The Commissioner of Income Tax (Appeals) possesses co-terminus powers with the Assessing Officer and can direct the Assessing Officer to perform actions he failed to do, but cannot introduce a new source of income in the assessment. The appellate assessment must be confined to the items of income that were the subject matter of the original assessment.

Totgars Co-operative Sale Society Ltd. v. ITO
322 ITR 283 · 2010 · Supreme Court
1,283
citing judgments

The interest income earned by a cooperative society from investing its surplus funds in fixed deposits with banks is not "derived from" its eligible business activities and is taxable as "income from other sources" under Section 56, thus not qualifying for deduction under Section 80P.

K.P. Varghese v. ITO
131 ITR 597 · 1981 · Supreme Court
989
citing judgments

An addition to income cannot be made merely on the basis of a difference in valuation of assets or a Valuation Officer's report without establishing actual understatement of consideration or the source of unexplained funds through proper enquiry. The Assessing Officer must conduct proper enquiry and satisfy the conditions for making such additions.

GE India Technology Centre Pvt. Ltd. v. CIT
327 ITR 456 · 2010 · Supreme Court
663
citing judgments

Tax must be deducted at source from payments made to a non-resident under Section 195 only if such payment is chargeable to tax in India. The Assessing Officer bears the onus to establish that the payments made are indeed chargeable to tax under the Income Tax Act.

Commissioner of Income Tax v. Nova Promoters and Finlease (P) Ltd.
342 ITR 169 · 2012 · High Court
658
citing judgments

To make an addition under Section 68 for unexplained cash credits, the Assessing Officer must conduct proper inquiry into the identity, genuineness, and creditworthiness of the creditor, especially concerning share application money. The assessee's initial discharge of burden by providing necessary details shifts the onus back to the AO for further investigation, including the source of source.

Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT
227 ITR 172 · 1997 · Supreme Court
621
citing judgments

Interest income earned on deposits, particularly before the commencement of business operations or as a requirement for business licensing, is taxable as "income from other sources" under Section 56, and cannot be treated as business income or set off against interest on borrowed funds.

Kale Khan Mohammad Hanif v. CIT
50 ITR 1 · 1963 · Supreme Court
581
citing judgments

The assessee bears the onus of proving the source and nature of any sum of money or receipt found to have been received by them. If the assessee fails to satisfactorily explain the receipt, the Income-tax Officer is entitled to treat it as taxable income.

Liberty India v. CIT
317 ITR 218 · 2009 · Supreme Court
571
citing judgments

The Supreme Court clarified that for profits and gains to be eligible for deductions under sections like 10B, 80IA, or 80IB, the income must be "derived from" or have a direct nexus to the eligible business activity. Income from incidental sources like the sale of scrips/licenses or interest on employee loans is generally not considered as derived from the eligible business for such deductions.

Judgments citing income from other sources

R and B Falcon A Pty Ltd, Mumbai vs. Assistant Commissioner of Income Tax, Dehradun

Appeal is allowed in above terms

ITA 128/DDN/2025[2022-23]Status: DisposedITAT Dehradun30 Jan 2026AY 2022-23

Bench: Sh. Satbeer Singh Godara & Sh. Manish Agarwalita No. 128/Ddn/2025 : Asstt. Year: 2022-23 R & B Falcon A Pty Ltd., Vs Acit, Office No. 402, 4Th Floor, One Circle-2, Boulevard Lake, Boulevard Road, Dehradun, Hiranandani Business Park, Powai Uttarakhand-248001 Lit S.O. Mumbai-400076 (Appellant) (Respondent) Pan No. Aaccr5345Q Assessee By : Sh. Amit Arora, Ca & Sh. Vishal Mishra, Ca Revenue By : Sh. Mohan Lal Joshi, Sr. Dr Date Of Hearing: 15.01.2026 Date Of Pronouncement: 30.01.2026 Order Per Satbeer Singh Godara: This Assessee’S Appeal For Assessment Year 2022-23, Arises Against The Cit(A)-3, Noida’S Din & Order No. Itba/Apl/S/250/2025-26/1076592383(1) Dated 30.05.2025, In Proceedings U/S 143(3) R.W.S. 144C Of The Income Tax Act, 1961. 2. Heard Both The Parties At Length. Case File Perused.

For Appellant: Sh. Amit Arora, CA &For Respondent: Sh. Mohan Lal Joshi, Sr. DR
Section 143(3)Section 244A

there are two questions which need to be decided: (A) whether interest on refund is business income (as held by the AO) or income from other sources (as claimed by the appellant); and (B) whether non-existence of PE in AY 2022-23 changes the nature of interest of income ... discussion w.r.t. para (A) above. 5.1.4 With regard to the first issue (A) as to whether interest on refund is business income or income from other sources, the issue has been discussed at length by the Hon’ble High Court of Uttrakhand in the case of BJ services Company Middle

Co-Operative Cane Development Union Ltd., Bahraich vs. Income Tax Officer-1, Bahraich

In the result, all the three appeals are partly allowed

ITA 601/LKW/2025[2020-21]Status: DisposedITAT Lucknow30 Jan 2026AY 2020-21

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharyita Nos.599, 600 & 601/Lkw/2025 A.Ys. 2013-14, 2018-19 & 2020-21 Cooperative Cane Development Vs. Income Tax Officer-1, 423A, Union Ltd., Bahraich, C/O Vaishnavpuram, Huzoorpur Ayyubi Chambers, Raniganj, Road, Bahraich, Uttar Pradesh Lakhimpur Kheri-262701, U.P. 271801 Pan: Aaaac8503F (Appellant) (Respondent) Assessee By: Sh. K.R. Rastogi, C.A. Revenue By: Sh. R.R.N. Shukla, Addl Cit Dr Date Of Hearing: 21.01.2026 Date Of Pronouncement: 30.01.2026 O R D E R Per Bench These Three Appeals Have Been Filed Against The Orders Of The Ld. Cit(A), Nfac On 25.06.2025 (For The Assessment Year 2013-14) & 26.06.2025 (For The Assessment Year 2018-19) & 4.07.2025 (For The Assessment Year 2020-21), Wherein The Ld. Cit(A) Has Partly Allowed The Appeals Of The Assessee Against The Various Orders Passed By The Ld. Ao Under Section 143(3) For The Assessment Years 2013-14, 2018-19 & 2020-21. The Grounds Of Appeal In The Aforesaid Three Appeals Are As Under:- A.Y. 2013-14 “(1) That The Authorities Below Erred On Facts & In Law In Not Allowing Deduction U/S 80P(2)(A)(Iii) & 80P(2)(I) Of I. T. Act On Interest Received On Investments Held With Banks In Form Of F.D.R.'S & Interest On Saving Bank Account Rs. 72,38,730/-. (2) That The Authorities Below Erred On Facts In Not Considering Investments In Deposits With Banks Has Been Made As Per Statutory Requirements & The Interest So Realized On Such Investments Shall Be Attributable To The Activity Of Providing Credit Facilities & Marketing Agriculture Produce. Cooperative Cane Development Union Ltd. A.Ys. 2013-14, 2018-19 & 2020-21

For Appellant: Sh. K.R. Rastogi, C.AFor Respondent: Sh. R.R.N. Shukla, Addl CIT DR
Section 143(3)Section 80PSection 80P(2)(a)

society. The ld. AO held that any interest income arising from deposit / investment of funds in banks in the nature of income from other sources were taxable under section 56 of the Income Tax Act and could not be categorized as income from the, ‘profits and gains of business ... produce grown by the members). He held that the said deduction was not available to interest income which was in the nature of income from other sources. He relied upon the decision of the Hon’ble Supreme Court in the case of Totgars Cooperative Sale Society Limited

Co-Operative Cane Development Union Ltd., Bahraich vs. Income Tax Officer-1, Bahraich

In the result, all the three appeals are partly allowed

ITA 600/LKW/2025[2018-19]Status: DisposedITAT Lucknow30 Jan 2026AY 2018-19

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharyita Nos.599, 600 & 601/Lkw/2025 A.Ys. 2013-14, 2018-19 & 2020-21 Cooperative Cane Development Vs. Income Tax Officer-1, 423A, Union Ltd., Bahraich, C/O Vaishnavpuram, Huzoorpur Ayyubi Chambers, Raniganj, Road, Bahraich, Uttar Pradesh Lakhimpur Kheri-262701, U.P. 271801 Pan: Aaaac8503F (Appellant) (Respondent) Assessee By: Sh. K.R. Rastogi, C.A. Revenue By: Sh. R.R.N. Shukla, Addl Cit Dr Date Of Hearing: 21.01.2026 Date Of Pronouncement: 30.01.2026 O R D E R Per Bench These Three Appeals Have Been Filed Against The Orders Of The Ld. Cit(A), Nfac On 25.06.2025 (For The Assessment Year 2013-14) & 26.06.2025 (For The Assessment Year 2018-19) & 4.07.2025 (For The Assessment Year 2020-21), Wherein The Ld. Cit(A) Has Partly Allowed The Appeals Of The Assessee Against The Various Orders Passed By The Ld. Ao Under Section 143(3) For The Assessment Years 2013-14, 2018-19 & 2020-21. The Grounds Of Appeal In The Aforesaid Three Appeals Are As Under:- A.Y. 2013-14 “(1) That The Authorities Below Erred On Facts & In Law In Not Allowing Deduction U/S 80P(2)(A)(Iii) & 80P(2)(I) Of I. T. Act On Interest Received On Investments Held With Banks In Form Of F.D.R.'S & Interest On Saving Bank Account Rs. 72,38,730/-. (2) That The Authorities Below Erred On Facts In Not Considering Investments In Deposits With Banks Has Been Made As Per Statutory Requirements & The Interest So Realized On Such Investments Shall Be Attributable To The Activity Of Providing Credit Facilities & Marketing Agriculture Produce. Cooperative Cane Development Union Ltd. A.Ys. 2013-14, 2018-19 & 2020-21

For Appellant: Sh. K.R. Rastogi, C.AFor Respondent: Sh. R.R.N. Shukla, Addl CIT DR
Section 143(3)Section 80PSection 80P(2)(a)

society. The ld. AO held that any interest income arising from deposit / investment of funds in banks in the nature of income from other sources were taxable under section 56 of the Income Tax Act and could not be categorized as income from the, ‘profits and gains of business ... produce grown by the members). He held that the said deduction was not available to interest income which was in the nature of income from other sources. He relied upon the decision of the Hon’ble Supreme Court in the case of Totgars Cooperative Sale Society Limited

Co-Operative Cane Development Union Ltd., Bahraich vs. Income Tax Officer-1, Bahraich

In the result, all the three appeals are partly allowed

ITA 599/LKW/2025[2013-14]Status: DisposedITAT Lucknow30 Jan 2026AY 2013-14

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharyita Nos.599, 600 & 601/Lkw/2025 A.Ys. 2013-14, 2018-19 & 2020-21 Cooperative Cane Development Vs. Income Tax Officer-1, 423A, Union Ltd., Bahraich, C/O Vaishnavpuram, Huzoorpur Ayyubi Chambers, Raniganj, Road, Bahraich, Uttar Pradesh Lakhimpur Kheri-262701, U.P. 271801 Pan: Aaaac8503F (Appellant) (Respondent) Assessee By: Sh. K.R. Rastogi, C.A. Revenue By: Sh. R.R.N. Shukla, Addl Cit Dr Date Of Hearing: 21.01.2026 Date Of Pronouncement: 30.01.2026 O R D E R Per Bench These Three Appeals Have Been Filed Against The Orders Of The Ld. Cit(A), Nfac On 25.06.2025 (For The Assessment Year 2013-14) & 26.06.2025 (For The Assessment Year 2018-19) & 4.07.2025 (For The Assessment Year 2020-21), Wherein The Ld. Cit(A) Has Partly Allowed The Appeals Of The Assessee Against The Various Orders Passed By The Ld. Ao Under Section 143(3) For The Assessment Years 2013-14, 2018-19 & 2020-21. The Grounds Of Appeal In The Aforesaid Three Appeals Are As Under:- A.Y. 2013-14 “(1) That The Authorities Below Erred On Facts & In Law In Not Allowing Deduction U/S 80P(2)(A)(Iii) & 80P(2)(I) Of I. T. Act On Interest Received On Investments Held With Banks In Form Of F.D.R.'S & Interest On Saving Bank Account Rs. 72,38,730/-. (2) That The Authorities Below Erred On Facts In Not Considering Investments In Deposits With Banks Has Been Made As Per Statutory Requirements & The Interest So Realized On Such Investments Shall Be Attributable To The Activity Of Providing Credit Facilities & Marketing Agriculture Produce. Cooperative Cane Development Union Ltd. A.Ys. 2013-14, 2018-19 & 2020-21

For Appellant: Sh. K.R. Rastogi, C.AFor Respondent: Sh. R.R.N. Shukla, Addl CIT DR
Section 143(3)Section 80PSection 80P(2)(a)

society. The ld. AO held that any interest income arising from deposit / investment of funds in banks in the nature of income from other sources were taxable under section 56 of the Income Tax Act and could not be categorized as income from the, ‘profits and gains of business ... produce grown by the members). He held that the said deduction was not available to interest income which was in the nature of income from other sources. He relied upon the decision of the Hon’ble Supreme Court in the case of Totgars Cooperative Sale Society Limited