Hi
There is an assessee engaged in Civil Works contracts. As per the terms of agreement with contractee, the assessee makes FDs as Security Deposit. These FDs are funded from the OD limits. Since FDs are directly linked with the business of the assessee, can interest on them be taxed under PGBP rather than IFOS? Otherwise, if interest on FDs is taxed under IFOS, can interest paid on OD be deducted from Interest earned on FDs?
Also kindly refer any case laws in respect of above matters.
Thank you.
CAclubindia
