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2015 (7) TMI 1231 - ITAT MUMBAIInterest income considered as income from other sources - interest on FDRs - claim of the assessee that the impugned interest income is a capital receipt which is permissible to be set-off against the capital work-in-progress - Held that:- It is quite apparent that the funds deployed in FDRs are tied up funds and not surplus funds. Rather, in my considered opinion, the impugned funds are inextricably linked to the development and construction of assessee’s project of integrated market complex at White Field, Bangalore. In the background of the aforesaid factual position, in my view, the income on FDRs is required to be capitalized to be reducd from the capital work-in-progress, and is fully covered by the ratio of the judgment of the Hon'ble Supreme Court in the case of CIT v/s Bokaro Steel Ltd., [1998 (12) TMI 4 - SUPREME Court], and not by the judgment of Hon'ble Supreme Court in Tuticorin Alkali Chemicals & Fertilisers Ltd. (1997 (7) TMI 4 - SUPREME Court a), as contended by the Revenue. Thus conclude by holding that the assessee has rightly reduced the said interest income from the capital work-in-progress, because the funds deployed are only for an ultra short period which in inextricably linked with the project. Hence, set aside the impugned order passed by the learned Commissioner (Appeals) and hold that the addition needs to be deleted. - Decided in favour of assessee.
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