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”. Therefore, the broken period interest paid to the sellers of securities was an allowable deduction from its business income under the Act. clarification dated October 5, 1993 was issued by Circular No. 665 [(1993) 204 ITR (St.) 39] (AY.1999-2000, 2000-01)
CIT(LTU) v. State Bank of India (SBI) (2020) 428 ITR 316/194 DTR 259 / (2021 ) 277 Taxman (Karn.)(HC) Editorial : Notice issued in SLP filed against the High Court order . CIT(LTU) v. State Bank of India ( 2021 ) 281 Taxman 368 (SC)
S. 37(1) : Business expenditure-Bank-Purchase and sale of securities -Broken period interest paid on purchase of securities allowable as deduction when the broken period interest from sale offered to tax as business income. [S. 28(i), 145]