Dismissing the appeals of the revenue the Court held that the assessee ever since its inception had been offering the broken period interest income earned from the sale of securities as business income under section 28 of the Income-tax Act, 1961 and not as income under the head “Income from other sources”. Accordingly the broken period interest paid to the sellers of securities was an allowable deduction from its business income . Referred clarification dt. 5-10 – 1993 Circular No. 665 ([1993] 204 ITR (St.) 39) ( AY.1999-2000, 2000-01)
CIT (LTU) v. SBI (2020) 428 ITR 316/ 194 DTR 259 (Karn)(HC)
S.37(1): Business expenditure — Bank — Purchase and sale of securities — Assessable as business income and not as income from other sources -Interest paid allowable as deduction [ S. 28(i), 36(i) (iii), 56 ]