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2016 (6) TMI 1049 - GUJARAT HIGH COURTInterest income - taxability - amount of deposit kept with the bank for the purpose of opening of Letter of Credit (LC) used for the purchase of Plant & Machinery - whether would be taxable as ‘income from other sources’ and the same shall not got to reduce the preoperative expenses or the fixed assets of the appellant? - Held that:- Considering the decision of the Hon’ble Supreme Court in the case of Karnal Cooperative Sugar Mills Ltd (1999 (4) TMI 7 - SUPREME Court), the question which is raised in the present appeal is required to be answered in favour of the assessee as observed that it is not a case where any surplus share capital money which is lying idle has been deposited in the bank for the purpose of earning interest. The deposit of money in the present case is directly linked with the purchase of plant and machinery. Hence, any income earned on such deposit is incidental to the acquisition of assets for the setting up of the plant and machinery. - Interest shall go to reduce the cost of the asset - Decided in favour of the assessee
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