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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

Tech Mahindra Ltd., Mumbai vs. ACIT, Circle - 2(3)(1), Mumbai

In the result, appeal by the assessee is allowed

ITA 6573/MUM/2019[2012-13]Status: DisposedITAT Mumbai17 Mar 2022AY 2012-13

Bench: Shri Vikas Awasthy & Shri Prashant Maharishiआअसं. 6573/मुं/2019 ("न. व. 2012-13 ) Tech Mahindra Limited, Gateway Building, Apollo Bunder, Mumbai – 400 001 Pan: Aaacm-3484-F ...... अपीलाथ" /Appellant बनाम Vs. Acit, Cir. 2(3)(1), Aaykar Bhavan, M.K.Road, Mumbai 400 020 ..... ""तवाद"/Respondent अपीलाथ" "वारा/ Appellant By : Shri J.D.Mistri, Sr. Advocate ""तवाद" "वारा/Respondent By : Shri Rajesh Damor सुनवाई क" "त"थ/ Date Of Hearing : 20/12/2021 घोषणा क" "त"थ/ Date Of Pronouncement : 17/03/2022 आदेश/ Order Per Vikas Awasthy, Jm: 6573/Mum/2019 This Appeal By The Assessee Is Directed Against The Order Of Commissioner Of Income Tax(Appeals)-6, Mumbai [In Short 'The Cit(A)’] Dated 04/09/2019 For The Assessment Year 2012-13. 2. Shri J.D.Mistri, Sr.Advocate Appearing On Behalf Of The Assessee Submitted At The Outset That The Assessee Has Raised Additional Grounds Of 2 Appeal Assailing Jurisdiction Assumed By The Assessing Officer U/S. 147 Of The Income Tax Act,1961 ( In Short 'The Act') & Validity Of The Order Passed U/S. 143(3) R.W.S. 147 Of The Act. At This Stage He Would Be Confirning His Submissions On The Additional Grounds Raised.

For Appellant: Shri J.D.Mistri, Sr. AdvocateFor Respondent: Shri Rajesh Damor
Section 115JSection 143(3)Section 147Section 148Section 68

same amount and held the receipts from foreign customers/parties as unexplained cash credits and taxed under ‘Income from other Sources’. The ld.Counsel for the assessee in support of this contention furnished copy of the reasons for reopening for Assessment Year 2011-12, copy of the assessment order dated 30//12/2018 ... cannot be any escapement of income. That too, merely for the reason of changing the nature and character of income from business to income from other sources by treating it as unexplained cash credit. Thus, in our considered opinion, not only the reopening of assessment is invalid in absence

M/S. Kotekar Vyavasaya Seva Sahakara Sangha Niyamitha, Mangaluru vs. The Income Tax Officer, Ward - 2(4), Mangaluru

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

ITA 1232/BANG/2019[2015-16]Status: DisposedITAT Bangalore14 Mar 2022AY 2015-16

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2015-16 M/S. Kotekar Vyavasaya Seva Sahakara Sangha Niyamitha, The Income Tax Officer, 5-4(5), Raitha Sadana, Ward – 2(4), Beeri, Kotekar, Mangalore. Mangalore – 575 022. Vs. Pan: Aaaak2844D Appellant Respondent Assessee By : Shri Prashanth .G.S, Ca : Shri Sankar Ganesh K, Jcit Revenue By (Dr) Date Of Hearing : 31-01-2022 Date Of Pronouncement : 14-03-2022 Order Per Beena Pillaipresent Appeal Arises Out Of Order Dated 19.03.2019 Passed By Ld.Cit(A), Mangaluru On Following Grounds Of Appeal: Tax Effect In Sl.No. Grounds Of Appeal Rs. A) The Orders Of The Authorities Below In So Far As These Are Against The Appellant Is Opposed To Law, Weight Of Evidence, Natural Justice, Probabilities, Facts & Circumstances Of The Appellant'S 1. Case. B) The Appellant Denies Itself Liable To Be Assessed On A Total Income Of Rs.82,17,400/- As Against The Returned Income Of Rs.1,99,640/- Under The Facts & Circumstances

For Appellant: Shri Prashanth .G.S, CA
Section 57Section 80PSection 80P(2)(a)Section 80P(2)(d)Section 80P(4)

under the facts and circumstances of the case. g) Without prejudice, if the interest income earned from deposits is considered as income from other sources, then the learned assessing officer ought to have allowed the deduction towards the incidental expenses incurred under section 57 of the Act under the facts ... Interest/dividend income of Rs.1,79,47,663/- earned from Co-operative Banks and nationalised Banks was held to be income from other sources and excluded from the deduction u/s. 80P(2)(a)(i). Further deduction under Section 80P(2)(d) was also denied relying on the Karnataka High Court decision

Pravin Laxmichand Chheda, Mumbai vs. ACIT 24(3), Mumbai

In the result the appeal filed by the assessee is allowed

ITA 509/MUM/2020[2014-15]Status: DisposedITAT Mumbai09 Mar 2022AY 2014-15

Bench: Shri S Rifaur Rahman & Shri Pavan Kumar Gadaleshri Pravin Laxmichand Vs. Acit – 24(3) Chheda Room No. 413, 4Th 302, Aavishkar Society, Floor, Piramal Sv Road, Irla Bridge Chambers, Parel Andheri (W), Mumbai – 400012 Mumbai – 400058 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabpc1278P Appellant .. Respondent Appellant By : Mr.Yogesh Thar. Ar Respondent By : Mr.Naveen Kumar. Sr.Dr Date Of Hearing 16.02.2022 Date Of Pronouncement 04.03.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Order Of The Commissioner Of Income Tax (Appeals)- 36, Mumbai Passed U/S 143(3) & 250 Of The Act. The Assessee Has Raised The Following Grounds Of Appeal: 1. (A) The Learned Cit (Appeals) Erred In Law & Facts In Confirming The Action Of The Learned Assessing Officer Of Assessing The Loan Taken From Sadguru Krupa Constructions Pvt. Ltd. (Herein Referred As "Company") On 05.05.2013 Of Pravin Laxmichand Chheda., Mumbai. Rs.25,00,000/- As Deemed Dividend U/S 2(22)(E) Of The Income Tax Act, 1961. (B) The Learned Cit (Appeals) Failed To Appreciate The Fact That The Company Did Not Have Accumulated Profits As On The Date On Which The Loan Was Advanced. (C) The Learned Cit (Appeals) Erred In Law By Confirming The Manner Of Computation Of Accumulated Profits Adopted By The Learned Assessing Officer. (D) The Learned Cit (Appeals) Erred In Law By Not Appreciating The Fact That The Company Had Followed The Principles Of Revenue Recognition Laid Down In Accounting Standard 9 Issued By Icai. (E) The Learned Cit (Appeals) Erred In Law In Relying On The Statement Of Mr. Dllip Porwal Without Giving Your Appellant The Opportunity To Cross-Examine Him. (F) Your Appellant Prays That The Additions Made U/S 2(22)(E) Of The Income-Tax Act, 1961 Is Against The Provisions Of Law & Against The Principals Of Natural Justice & May Please Be Deleted.

For Appellant: Mr.Yogesh Thar. ARFor Respondent: Mr.Naveen Kumar. Sr.DR
Section 143(2)Section 143(3)Section 2(22)(e)

above, the loan to the assessee by a company in which he holds substantial shareholding, is hereby assessed under the head Income from Other Sources u/s 56 r.w.s 2(22)(e) of the Income Tax Act, 196 1.Therefore, Rs.25,00,000 is added to the total income of assessee under ... head income from other sources. Penalty proceedings u/s. 271(1)(c) is hereby initiated for furnishing inaccurate particulars of income. 4. The A.O. has assessed the total income of Rs. 1,04,25,280/- with the addition of Rs.25,00,000/-as deemed dividend U/sec2