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 bank guarantee in favour of APTRANSCO, in respect of which it has claimed deduction from the total interest income received during the year under consideration.
25. From the above it would be clear that puma facie to claim deduction of interest income one of the requirements is that the deduction or exemption should be provided under the provisions of the Act. Even at this stage the td. Counsel for the assessee has placed no material to show as to how such interest income is not taxable or exempt under the relevant provisions of the Act. Merely because the said interest income; is earned by the assessee on account of contractual obligation and the same has been accepted in the regular assessment u/s 143(3) does not mean that interest income is not taxable under the Act. It would be a travesty of justice to allow the assessee that latitude. There is no such provision under the Act to exempt any such income because it is contractual. This being so and keeping in view the ratio of the above decisions hiding that the assessing officer is fully competent and is entitled to consider of other item of income also, if such items of escaped income come to his notice, during the course of re assessment proceedings, and he is not confined to those matters or items alone, on the basis of which the proceedings under S.14S were initiated, we are of the view that thee was no true and full disclosure by the assessee in terms of Explanation 2(c )(iv) of section 147 of the Act and consequently the assessee’s case does not fall under the exceptions of the proviso to S.147 of the Act and accordingly the AO was fully justified in adding the interest income of Rs 253848 as ‘income from other sources’ to the income of the assessee- company, This view also finds support from the recent judgment in Girilal and Company vs. 5.L.r-‘eepa, 1TO and Others (2008; 300 ITR 432 (Bom). The order passed by the Id. CIT(A) to this extent is reverse- and that of the AO is restored. The grounds taken K the revenue are, therefore, allowed.