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2021 (11) TMI 685 - HC - Income TaxNature of receipt - Interest derived from Short Term Deposit Receipts - revenue or capital receipt - HELD THAT:- In the present case, the facts are akin to the decision in Karnal Co-operative Sugar Mills Ltd.[1999 (4) TMI 7 - SC ORDER]. Factually it is seen that the interest earned on the STDR was towards reducing the cost of the capital assets and therefore should not have been treated as revenue receipt in the hands of the Assessee. Consequently, the question framed is answered in affirmative, i.e. in favour of the Assessee and against the Department. In other words, it is held, in the facts and circumstances of the case, that the interest earned from STDRs made by the Appellant to enable to open LoC for procuring plant and machineries is incidental to such acquisition and should be treated as receipt of a capital nature and not taxed as income.
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