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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

Nawal Kishore Rajgarhia, Kolkata vs. D.C.I.T., Circle - 3(1), Kolkata

The appeal of the assessee is partly allowed as indicated above

ITA 1884/KOL/2024[2015-2016]Status: DisposedITAT Kolkata18 Nov 2024AY 2015-2016

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarmai.T.A. No.1884/Kol/2024 Assessment Year: 2015-16 Nawal Kishore Rajgarhia…………………………………………….…..……Appellant C/O Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2Nd Floor, Kolkata – 700069. [Pan: Acqpr3401G] Vs. Dcit, Circle-3(1), Kolkata............…..….…..….........……........……...…..…..Respondent Appearances By: Shri Siddharth Agarwal, Advocate, Appeared On Behalf Of The Appellant. Shri Pradip Biswas, Addl. Cit- Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : October 30, 2024 Date Of Pronouncing The Order : November 18, 2024 Order Per Sonjoy Sarma: The Present Appeal Is Filed By The Assessee Against The Order Dated 31.07.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee Filed His Return Of Income On 14.08.2015 Declaring A Total Income Of Rs.38,62,700/-. The Return Was Selected For Limited Scrutiny On Two Specific Issues: I. Gross Interest Shown In Schedule Os Of Itr Is Less Than Interest Receipt Reported In 26As. Ii. Large Value Sale Of Option In Securities (Derivative) In A Recognized Stock Exchange & No Business Income Declared By The Assessee (Stt Code-4)

Section 143(2)Section 250Section 68

Assessing Officer added a sum of Rs.15,10,175/- as interest income without considering that this amount had already been accounted for as ‘income from other sources’ after deducting interest expenses on a loan. 3. Aggrieved by the order of the Assessing Officer, the assessee preferred appeal ... Assessing Officer added Rs.15,10,175/- as interest income without considering that this amount had already been accounted for under the head ‘income from other sources’ after deducting associated interest expenses. The ld. AR argued that the assessment in the case of the assessee was selected for limited scrutiny

Late Muthumalainadar Krishnavel, Represented by 6 Legal Heirs, Tuticorin vs. PCIT-1, Madurai

The appeal stand allowed in terms of our above order

ITA 1018/CHNY/2024[2016-17]Status: DisposedITAT Chennai18 Nov 2024AY 2016-17

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.1018/Chny/2024 (िनधा"रण वष" / Assessment Year: 2016-17) Smt. K.Indira, Pcit-1 Shri K.Muthuvel, Madurai. Shri Selvakumaran, Shri M.K.Balaji बनाम/ Shri K.Ragupathy, Shri K.Sudhakar Vs. All L/Hs Of Late Shri Muthumalainadar Krishnavel, 15, Melanavaladivillai, Arumuganeri, Tuticorin-628 202. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Bctpk-6952-M (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri S.Sridhar (Advocate)-Ld. Ar ""थ"कीओरसे/Respondent By : Shri R.Clement Ramesh Kumar (Cit)-Ld. Dr सुनवाईकीतारीख/Date Of Hearing : 29-08-2024 घोषणाकीतारीख /Date Of Pronouncement : 18-11-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri S.Sridhar (Advocate)-Ld. ARFor Respondent: Shri R.Clement Ramesh Kumar (CIT)-Ld. DR
Section 143(3)Section 147Section 263Section 56Section 56(2)(vii)

reopened and notice u/s 148 was issued on 13-11-2019. The assessee filed return of income reflecting house property income and income from other sources besides agricultural income. During the course of assessment proceedings, notices u/s 142(1) were issued

Income Tax Officer, Ward-3(1)(1), Ahmedabad, Vejalpur vs. Nana Layja Power Company Limited, Ahmedabad

In the result, the appeal of the Revenue stands dismissed

ITA 1457/AHD/2024[2014-15]Status: DisposedITAT Ahmedabad12 Nov 2024AY 2014-15

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.1457/Ahd/2024 िनधा"रण वष" /Assessment Year : 2014-15 The Income Tax Officer Nanalayja Power Company Ltd. बनाम/ Ward-3(1)(1) 301-303, Kaivanna Complex V/S. Ahmedabad Panchwati, Ahmedabad - 380 006 (Gujarat) "थायी लेखा सं./Pan: Aadcn 45111 F अपीलाथ&/ (Appellant) '( यथ&/ (Respondent) Assessee By : -None- Revenue By : Shri Surendra Kumar, Sr.Dr सुनवाई की तारीख/Date Of Hearing : 11/11/2024 घोषणा की तारीख /Date Of Pronouncement: 12/11/2024 आदेश/O R D E R Per Makarand V. Mahadeokar, Am: This Appeal By The Revenue Arises From The Order Of The Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac) [Hereinafter Referred To As “Cit(A)”], Dated 11/06/2024, For The Assessment Year (Ay) 2014-15, Wherein The Cit(A) Deleted The Addition Of Rs.1,17,75,568/- Made By The Assessing Officer [Hereinafter Referred To As “Ao”] U/S.56 Of The Act In The Assessment Order Passed Under Section 143(3) R.W.S. 147 Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act”], Dated 27/11/2019. Ito Vs. Nana Layja Power Company Ltd. Asst. Year : 2014-15

For Appellant: -None-For Respondent: Shri Surendra Kumar, Sr.DR
Section 143(3)Section 147Section 56

project funds, had escaped assessment. During the reassessment proceedings, the AO concluded that this interest income was liable to tax under the head "Income from Other Sources," relying on the principles laid down in the case of Tuticorin Alkali Chemicals & Fertilizers ... primary ground before us is that the CIT(A) erred in deleting the addition made by the AO, treating the interest income as “Income from Other Sources” under Section 56 of the Act. Additionally, the Department sought leave to amend or add grounds before the final hearing, but no amendments