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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

Bhagyashree Manohar Sawant, Mumbai vs. ITO, Ward - 26(1)(2), Mumbai

In the result, the appeal filed by assessee is allowed for statistical purposes

ITA 791/MUM/2023[2011-12]Status: DisposedITAT Mumbai23 May 2023AY 2011-12

Bench: Shri Pavan Kumar Gadale & Ms. Padmavathy Sbhagyashree Manohar Ito, Ward-26(1)(2), Sawant, 702, 7Th Floor, Room.No.303, बनाम/ Ptabuddha Samata Co- Kautilya Bhavan, Vs. Op Hsg. Society, Bkc, Bandra(E), Sant Rohidas Marg, Mumbai-400051. Sion, Mumbai-400022. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Cohps2513D (अपीलाथ" /Appellant) (""थ" / Respondent) अपीलाथ" ओर से / Appellant By : Shri Malav Sheth.Ar ""थ" की ओर से/Respondent By : Shri Anil Gupta.Dr सुनवाई की तारीख / Date Of Hearing 22/05/2023 घोषणा की तारीख /Date Of Pronouncement 23/05/2023 आदेश / Order Per Pavan Kumar Gadale - Jm: The Assessee Has Filed An Appeal Against The Order Of The Commissioner Of Income-Tax (Appeals)-National Faceless Appeal Centre, Delhi [“Ld. Cit(A)”] Passed Under Section 250 Of The Income Tax Act, 1961 (“The Act”) For The Assessment Year (“Ay”) 2011-12. The Assessee Has Raised Following Grounds Of Appeal:- 1. “Additions Of Rs.25,48,198/- Confirmed Without Giving Opportunity Of Being Heard Is Bad-In-Law & Must Be Deleted.

For Appellant: Shri Malav Sheth.ARFor Respondent: Shri Anil Gupta.DR
Section 143(2)Section 143(3)Section 148Section 250Section 68

must be deleted. 4. Addition of Rs. 25,48,198/- without considering the expenditure incurred in connection with the same under the head "Income from Other Sources" must be deleted.” 2. The brief facts of the case are that, the assessee has not filed the return of income ... submitted the details. The AO found that in 3 Bhagyashree Manohar Sawant the said FY, the assessee has disclosed the income under “income from other sources” and the assessee has not produced the evidences in respect of sources of cash deposits in the bank account to the extent of Rs.19

Sulochana Saijan Modi, Mumbai vs. Income Tax Officer-National E-Assessment Centre, Mumbai

In the result, the appeal filed by assessee is allowed

ITA 557/MUM/2023[2018-2019]Status: DisposedITAT Mumbai23 May 2023AY 2018-2019

Bench: Shri Kuldip Singh& Shri Om Prakash Kantsulochana Saijan Modi, Ito, A-501, Akar Apartment, National E- बनाम/ Film City Road, Malad Assessment Centre, Vs. East, Mumbai-400097. Mumbai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. : Aaopm0887F (अपीलाथ"/Appellant) (""थ" / Respondent) अपीलाथ" ओर से/ Appellant By : Shri Shashi Tulsian ""थ" की ओर से/Respondent By: Shri Ajay Singh, Sr.Ar सुनवाई की तारीख/ Date Of Hearing 11/05/2023 घोषणा की तारीख /Date Of Pronouncement 23/05/2023 आदेश / Order Per Om Prakash Kant - Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 19.01.2023 Passed By Cit(A), National Faceless Appeal Centre (“Nfac”), Delhi [“Ld.Cit(A)”] For Assessment Year (“Ay”) 2018-19. 2. The Grounds Raised By The Assessee Are Reproduced As Under: -

For Appellant: Shri Shashi TulsianFor Respondent: Shri Ajay Singh, Sr.AR
Section 143(3)Section 56(2)(x)

Singh Maina in as much as * The relied decision relates to Income from Capital Gain and the case of the appellant falls under Income from Other Sources. * In the said decision, the mentioned argument is at best an obiter dicta and not a ratio decidendi, therefore, not enforceable ... property i.e. Rs.57,85,300/- (1,45,55,800- 87,70,500) and 50% of the same has to be taxed under 'Income from other sources". In the meantime, the assessee had furnished the copy 6 | P a g e of scrutiny assessment order