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2018 (2) TMI 1763 - ITAT NEW DELHIInterest income from banks on FD - capitalization of interest amount in pre-operative expenses - It was observed that the interest earned was deducted from capital work in progress since the project is under construction and there was no income from operations. The surplus money was deposited in short-term deposits with bank. - AO treated the interest income as income from other sources - Held that:- the interest earned from temporary deposits are inextricably linked with the construction of plant and manufacturing unit. Accordingly we delete the addition made by Ld. AO in respect of the interest as “income from other sources” and hold the same as “income from business” to be adjusted against capital work-inprogress. - Decided in favor of assessee.
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