Interest on FDR for security/guarantee to companies for taking contracts is Business Income

Shri Devasamparambil Hassainar Kutty Vs ACIT (ITAT Jaipur) Revenue has not disputed the fact that the FDRs taken by the assessee are for the purpose of furnishing the security/guarantee to the companies those have awarded the contract to the assessee. Therefore, these FDRs were furnished as a performance guarantee by the assessee. Once the FDRs in question were obtained for the purpose of furnishing the performance guarantee for taking the contracts, then the interest on such FDRs has a direct nexus with the business activity of the assessee and consequently the same has to be treated as busin...