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2015 (7) TMI 949 - AT - Income TaxChargeability of interest income - claimed to be capital receipt by the assessee and set off against the project development expenditure - Held that:- Ratio of the finding of in the case of Indian Oil Panipat Power Consortium Ltd. vs. ITO, (2009 (2) TMI 32 - DELHI HIGH COURT ) would be squarely applicable to the facts of the assessee’s case, because admittedly in the case under appeal before us the share capital as well as loans were raised for the specific purpose of setting up of the power generation plants. The business of the assessee has not been commenced and therefore, as per above decision, the interest received in the period prior to commencement of business was in the nature of capital receipt and hence was required to be set off against the pre-operative expenses. The assessee has already set off the interest income against the pre-operative expenses which is titled as “project development expenditure”. In view of above, we are of the opinion that the interest income of ₹ 1,35,87,158/- as well as ₹ 7,91,51,306/- was a capital receipt not chargeable to tax during the year under consideration. - Decided in favour of assessee.
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