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| The Tax Publishers2020 TaxPub(DT) 4476 (Kol-Trib) INCOME TAX ACT, 1961
Section 4
Interest earned on deposits had to be mandatorily invested in concerned project and thus interest from borrowed funds temporarily deposited in banks [STD] was inextricably linked with setting up of plant. Accordingly, same was to be treated as capial receipt.
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Income - Capital or revenue receipt - Interest income on short-term deposits out of funds borrowed in connection with setting up of project Integrated Petrochemical Complex funds borrowed for setting up of project -
Assessee earned interest income on short-term deposits out of funds borrowed in connection with setting up of Project Integrated Petrochemical Complex.Held: Interest earned on deposits had to be mandatorily invested in concerned project and thus interest from borrowed funds temporarily deposited in banks [STD] was inextricably linked with setting up of plant. Accordingly, same was to be treated as capial receipt.
Relied:CIT v. Karnataka Power Corporation (2001) 247 ITR 268 (SC) : 2001 TaxPub(DT) 524 (SC) and CIT v. Bokaro Steel Ltd. (1999) 236 ITR 315 (SC) : 1999 TaxPub(DT) 1094 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12 to 2014-15
IN THE ITAT, KOLKATA BENCH
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