TMI Blog2022 (8) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... ted [ 2021 (11) TMI 685 - ORISSA HIGH COURT] In the said decision, after considering the judgments in Tuticorin Alkali Chemicals Fertilizers Ltd., Madras [ 1997 (7) TMI 4 - SUPREME COURT] ; Commissioner of Income Tax, Bihar II, Patna v. Bokaro Steel Ltd. [ 1998 (12) TMI 4 - SUPREME COURT] and Commissioner of Income Tax v. Karnal Co-operative Sugar Mills Ltd. [ 1999 (4) TMI 7 - SC ORDER] , this Court held that interest earned on short term deposits from the borrowed capital would be capital and not revenue in nature. Consequently, Question (b) is answered in the negative in favour of the Assessee and against the Department. In view of the above decision of this Court holding the interest received on short term deposits from borrowed c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel ORDER 1. This is an appeal by the Assessee against an order dated 17 th August 2005 passed by the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack (Tribunal) in Income Tax Appeal for the assessment year (AY) 1991-92. 2. While admitting the present appeal on 5th November 2012, the following questions were framed for consideration by this Court: (a) Whether and in any event, the Assessee is entitled to deduction under Section 57 (iii) of the Act in respect of the interest expenditure and public issue expenses incurred in respect of the funds which gave rise to interest income assessable under Section 56? (b) Whether the Tribunal was justified in law in upholding the taxation of interest received amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessee and against the Department. 5. As far as Question (c) is concerned, reliance is placed by learned counsel for the Assessee on the judgment of the Madhya Pradesh High Court in Commissioner of Income Tax v. Bright Automotives and Plastics Ltd. [2005] 273 ITR 60. 6. In the present case, the deduction is sought of 1/6th of the expenditure on acquiring the know-how. It has been disallowed only because in the previous year in question, the manufacturing activity of the Assessee had not commenced. As explained by the Madhya Pradesh High Court in the aforementioned decision, this is not one of the conditions on which the deduction is allowable. As long as the technical know-how is acquired and payment therefor is made in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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