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2011 (11) TMI 193 - ITAT DELHIInterest income earned on refund of earnest money – real estate - income from other sources vs income from business – interest bearing unsecured loan received for depositing earnest money - set off interest paid from the interest income - entitlement of carry forward of losses – participated in tender within months of incorporation – Held that:- The participation in the tender is starting of one activity which enable the assessee to acquire the land for development. The actual development of the land is immaterial for construing that business of the assessee has been set up. The investment of Rs. 186 crores was not as a deposit out of surplus fund rather it was earnest money paid by the assessee for the purchase of land. Thus, assessee has demonstrated that its business was set up during the accounting period relevant for this assessment year. Therefore, income of the assessee has to be assessed under the head "business income" and consequently loss computed by allowing interest expenditure against interest income deserves to be permitted for carry forward. - Decided in favor of assessee.
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