Interest earned on margin money kept for providing bank guarantee is not exempt

RELEVANT PARAGRAPH 24. Applying the ratio of the above decision to the facts of the present case, we find that undisputedly, the assessing officer has not initiated proceedings under S.14S of the Act, to lax the interest income of Rs. 25,83,848 earned on margin money. In fact, the assessing officer has initiated the proceedings under S.148 to bring to tax the reimbursement of income-tax from APTRANSCO. However, during the course of re-assessment proceedings, the assessing officer also noticed that the assessee has earned interest income of Rs.25,83,848 on margin money kept by it for providing ...