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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

DCIT, CC-2(2), Kolkata vs. Arya Realty Developers Private Limited, Kolkata

In the result, the appeal of the revenue is dismissed

ITA 1918/KOL/2024[2015-16]Status: DisposedITAT Kolkata28 Nov 2024AY 2015-16

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.1918/Kol/2024 Assessment Year: 2015-16 Dcit, Cc-2(2), Kolkata…….…..………………........………………....Appellant Vs. Arya Realty Developers Pvt. Ltd.…............................…..…..... Respondent P-95, Lake View Road, Kolkata – 700029. [Pan: Aaica1390C] Appearances By: Shri Abhijit Adhikari, Jcit, Sr. Dr, Appeared On Behalf Of The Assessee. Shri S. M. Surana, Advocate & Sunil Surana, Ca, Appeared On Behalf Of The Revenue. Date Of Concluding The Hearing : November 27, 2024 Date Of Pronouncing The Order : November 28, 2024 आदेश / Order Per Sonjoy Sarma: The Present Appeal Has Been Preferred By The Revenue Against The Order Dated 05.06.2024 Of The Commissioner Of Income Tax (Appeals)- 26, Kolkata [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. At The Outset, The Ld. Dr Raised Issue Of A Delay Of 35 Days In Filing The Instant Appeal. The Revenue Has Submitted An Application For Condonation Of Delay Citing Valid Reasons. After Hearing The Submissions, The Delay Is Condoned & The Appeal Is Admitted For Hearing. 3. Brief Facts Of The Case Are That The Assessee Declared Business Income Of Rs.3,81,39,040/-. The Assessing Officer Treated This Income As Unexplained Cash Credit U/S 68 Of The Act & Accordingly Re- Classified It Under The Head ‘Income From Other Sources’ By Applying Section 115Bbe Of The Act.

Section 115BSection 250Section 68

Assessing Officer treated this income as unexplained cash credit u/s 68 of the Act and accordingly re- classified it under the head ‘income from other sources’ by applying section 115BBE of the Act. I.T.A. No.1918/Kol/2024 Assessment Year: 2015-16 Arya Realty Developers Pvt. Ltd 4. Aggrieved by the above order ... appeal before the ld. CIT(A), where the ld. CIT(A) held that the income should be treated as business income and not income from other sources. 5. Aggrieved by this order, the revenue filed the present appeal before this Tribunal. At the time of hearing, the ld. DR contended