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2015 (10) TMI 2712 - ITAT LUCKNOWInterest income from banks - busniss income or income from other sources - Held that:- None of the judgments cited by the learned AR of the assessee is rendering any help to the assessee. Hence, respectfully following the judgment of Hon’ble Jurisdictional High Court rendered in the case of CIT vs. Indo Gulf Fertilizer & Chemical Corporation Ltd. (2005 (8) TMI 45 - ALLAHABAD High Court) we hold that interest income from bank is taxable as income from other sources except interest income of ₹ 17,70,413/- earned in course of public issue of shares as per Ground No. 5.1 raised by the assessee. In our considered opinion, this income should be set off against public issue expenses because interest earned was inextricably linked with raising of share capital and was thus adjustable towards the expenditures involved for the share issue. We direct the A.O. that to the extent of expenses incurred for public issue of shares, the amount of interest income of ₹ 17,70,413/- earned in course of public issue of shares should be set off against such expenses but if the amount of interest income on share application money is more than the expenses incurred for public issue of shares, then such excess interest income should be taxed as income from other sources. Decided in favour of assessee for statistical purposes. Disallowance of depreciation - Held that:- Since business was not in existence, depreciation is not allowable because as per section 32, depreciation is allowable on assets used for business. He has also relied on the judgment of Hon’ble apex court rendered in the case of Bokaro Steel Ltd (1998 (12) TMI 4 - SUPREME Court) and held that if the asset is used in construction of project, depreciation has to be capitalized and not allowable as revenue expenditure. As it is noted by CIT (A) that no submission was made on this issue. We find no infirmity in the assessment order on this issue and therefore, this ground is rejected.
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