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2011 (7) TMI 1110 - HC - Income Tax
Issues involved:
Revenue challenged tribunal's decision on bank interest and depreciation adjustments.
Bank Interest Issue:
- For the assessment year 1995-1996, the assessee earned interest from the bank on share application money.
- The Assessing Officer treated the interest earned as income from other sources and disallowed the adjustment claimed by the assessee.
- CIT(Appeals) allowed the appeal, citing a different decision, and the tribunal upheld this decision.
- Revenue argued that the interest earned was not linked to the business and should be taxed as per the Tuticorin Alkali Chemicals case.
- The assessee argued that the interest was linked to the capital structure of the company as per statutory provisions.
- The tribunal found that the facts of this case were different from the Tuticorin Alkali Chemicals case and referred to other relevant judgments.
- The High Court agreed with the tribunal's decision, stating that the interest earned was linked to the requirement of raising share capital.
Depreciation Issue:
- The tribunal also addressed the issue of allowing depreciation on plant & machinery not put to use during the year.
- The tribunal held that reopening under Section 147 of the Act was not permissible merely on a change of opinion.
- The High Court upheld the tribunal's decision on this issue as well.
- The tax appeal was ultimately dismissed.