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2022 (8) TMI 563 - AT - Income TaxNature of receipt - Receipt of interest income - revenue or capital receipt - As necessary on the part of the assessee to revise the audited financial statements before filing the revised return of income, as the assessee has failed to do so and the same is treated as revenue expenditure and assessable as “income from other sources” and determined the assessed income - HELD THAT:- It is undisputed fact that the assessee company incorporated for the purpose to carry on the business to set up, manage, operate and maintain a Rail Based Mass Rapid Transport System around and between Ahmedabad and Gandhinagar in the State of Gujarat. Both the Central and the State Governments are to provide requisite finaces for implementation of the said project and the funds from the Central and State Government flow directly to the assessee company. Thus the assessee company is a SPV formed by the Central Government and State Governmet of Gujarat and there is no profit motive as the entire fund entrusted and the interest accrued therefrom on deposits in bank has to be applied only for the purpose of welfare of the State as provided in the guidelines. We have no hesitation in holding the order passed by the Ld. CIT(A) that the interest income is to be treated as capital in nature and therefore the addition made by the Assessing Officer is hereby deleted. Thus the grounds of appeal raised by the Revenue are hereby rejected and Cross objection raised by the Assessee are hereby allowed.
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