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2023 (5) TMI 1106 - AT - Income TaxNature of receipts - treatment to toll charges during the project construction - capital receipt or revenue receipts - HELD THAT:- As during the construction of the 6 lane toll road, assessee was not free to utilize the toll receipts but was obliged to use the toll receipts in construction of the project as per the overriding obligation under the Concession Agreement and Escrow Agreement and assessee had in fact utilized the toll receipts in the project construction - toll receipts received during the period of project construction were inextricably linked to the project because it was mandatorily required to be used for the construction of the project - thus correctly treated as capital receipts and held that assessee had rightly reduced the same from the cost of project. Decided against revenue. Addition of interest income on fixed deposit as treated by AO as taxable income - As per AO interest income was Revenue in nature and it had no relation with the construction of capital assets which was 6 laning of highway - HELD THAT:- Assessee was required to provide Bank Guarantee to NHAI for the performance of its obligations under the concession agreement and for the purpose of opening such bank guarantee, assessee had to open an Fixed Deposit with Canara Bank as margin money and on such margin money assessee had received impugned interest. Contention of assessee that interest earned was inextricably linked to the construction of the project accepted. As in the case of Indian Oil Panipat Power Consortium Limited [2009 (2) TMI 32 - DELHI HIGH COURT] had decided the issue in favour of the assessee. Decided against revenue.
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