Case Laws Analysis
REFERRED Pune Sholapur Road Dev. Co. Ltd. v. ITO 2019 TaxPub(DT) 5273 (Mum-Trib)
REFERRED Road Infrastructure Development Company of Rajasthan Ltd. v. DCIT 2016 TaxPub(DT) 4221 (Jp-Trib)
REFERRED Principal CIT v. Facor Power Ltd. 2016 TaxPub(DT) 1063 (Del-HC)
REFERRED Adani Power Ltd. v. Asstt. CIT 2015 TaxPub(DT) 3050 (Ahd-Trib)
REFERRED Whistling Woods International Ltd. v. ITO 2011 TaxPub(DT) 0304 (Mum-Trib)
REFERRED Dy. CIT v. Times Guaranty Ltd. 2010 TaxPub(DT) 2070 (Mum-Trib)
REFERRED Indian Oil Panipat Power Consortium Ltd. v. ITO 2009 TaxPub(DT) 1494 (Del-HC)
REFERRED A.C. Nielsen Research Services (P) Ltd. v. Addl. CIT 2009 TaxPub(DT) 0594 (Mum-Trib)
REFERRED Deputy CIT v. Allied Construction 2007 TaxPub(DT) 0793 (Del-Trib)
REFERRED CIT v. Kisan Sahkari Chini Mills Ltd. 2006 TaxPub(DT) 0375 (All-HC)
REFERRED Shree Krishna Polyster Ltd. v. Deputy CIT 2005 TaxPub(DT) 0794 (Bom-HC)
REFERRED CIT v. Dr. V.P. Gopinathan 2001 TaxPub(DT) 1197 (SC)
REFERRED CIT v. Karnataka Power Corporation 2001 TaxPub(DT) 0524 (SC)
REFERRED CIT v. Bokaro Steel Ltd. 1999 TaxPub(DT) 1094 (SC)
REFERRED South India Shipping Corpn. v. CIT 1999 TaxPub(DT) 0413 (Mad-HC)
REFERRED Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT 1997 TaxPub(DT) 1304 (SC)
REFERRED CIT v. Assam Plantation Crops Development Corporation Ltd 1996 TaxPub(DT) 1149 (Gau-HC)
REFERRED CIT v. Govinda Choudhury & Sons 1993 TaxPub(DT) 0419 (SC)
REFERRED Challapalli Sugars Ltd. v. CIT 1975 TaxPub(DT) 0275 (SC)
REFERRED S.G. Mercantile Corporation P. Ltd. v. CIT 1972 TaxPub(DT) 0378 (SC)
REFERRED Traco Cable Company Ltd. v. CIT 1969 TaxPub(DT) 0239 (Ker-HC)
REFERRED Madhya Pradesh State Industries Corporation Ltd. v. CIT 1968 TaxPub(DT) 0397 (MP-HC)
REFERRED Mazagaon Dock Ltd. v. CIT 1958 TaxPub(DT) 0188 (SC)
REFERRED Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax 1954 TaxPub(DT) 0121 (SC)
 
The Tax Publishers2020 TaxPub(DT) 0771 (Mum-Trib)

INCOME TAX ACT, 1961

Section 56

When funds were inextricably linked with project funds, interest earned from time deposits kept in banks out of surplus funds of project had to be reduced from capital work-in-progress. Therefore, additions made towards interest Income under the head 'income from other sources' could not be sustained.

Income from other sources - Taxability - Interest earned from time deposits kept out of surplus funds -

Assessee engaged in construction of roads on BOT basis, borrowed loans from consortium banks. As per agreement with consortium banks, assessee withdrawn loan funds for the purpose of its project on a periodic basis. However, when funds were not required for its project, it kept those funds in consortium banks in fixed deposits for short period and necessary interest earned from said deposits has been credited to RTA account to be used for project of assessee. AO assessed said interest income as income from other sources. Held : When funds were inextricably linked with project funds interest earned from time deposits kept in banks out of surplus funds of project had to be reduced from capital work-in-progress. Therefore, additions made towards interest income under the head 'Income from other sources' could not be sustained.

Relied :ITAT Jaipur Bench in the case of ITA. No. 628/JP/2014 title as Infrastructure Development Co. of Rajasthan Ltd. v. DCIT, dt. 11-8-2016

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2012-13


INCOME TAX ACT, 1961

Section 37(1)

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