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2012 (8) TMI 768 - AT - Income TaxDis-allowance of Revenue expenditure holding them to be Capital Work in Progress assessee(SPV) engagd in development & construction services - commencement of business in AY 06-07 itself Held that:- It has been agreed in principle that the business of the assessee has commenced, hence, we direct the AO to allow expenditure which are not directly attributable to the development of project but are expenses incurred from year to year for general running of the business. Directly attributable expenses shall be capitalised and added to the WIP. Interest received from Bank on certain deposits capital receipt vs Income from other sources Held that:- Since it has been held for AY 06-07 that assessee has set up the business and the revenue expenditure are allowed. That being so interest income cannot be considered as a capital receipt for AY 07-08. Also it is held in the case of M/s. Tuticorin Alkali Chemicals & Fertilisers Ltd v CIT (1997 (7) TMI 4 - SUPREME COURT) that interest income from deposits even during preoperative period is assessable as income from other sources.
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