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| The Tax Publishers2020 TaxPub(DT) 2641 (Karn-HC) INCOME TAX ACT, 1961
Section 56
Since interest income from share application money is inextricably linked with requirement of company to raise share capital and, thus, liable to be set off against public issue expenses.
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Income from other sources - Chargeability - Interest income from share application money whether can be set off against public issue expenses -
Revenue challenged order of Tribunal holding that interest income earned from deposits is liable to be set-off against expenses incurred towards public issue when interest earned was revenue nature and expenditure claimed was capital nature. Held: Substantial question of law was answered against revenue by Supreme Court in 'CIT v. Shree Rama Multi Tech Ltd. Apex court held that such interest is inextricably linked with requirement of company to raise share capital and is thus liable to be set off against public issue expenses.
Distinguished:Tuticorin Alkali Chemicals v. CIT (1997) 227 ITR 172 (SC) : 1997 TaxPub(DT) 1304 (SC)Followed:CIT v. Shree Rama Multi Tech Ltd. [(2018) 92 TAXMANN.COM 363 (SC)] : 2018 TaxPub(DT) 1989 (SC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE KARNATAKA HIGH COURT
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