TMI Blog2015 (11) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... term loans secured from financial institutions is income chargeable under the head "Income from other sources" and would not go to reduce the interest payable by the assessee which would be capitalised after the commencement of commercial production. In the present case, the assessee has failed to substantiate that the assessee has already commenced its business operations. Therefore we are of the opinion that the interest income earned by the assessee is an income chargeable under the head "Income from other sources". - Decided against assessee. - I. T. A. No. 388 /Mds/ 2015 - - - Dated:- 19-8-2015 - A. MOHAN ALANKAMONY (Accountant Member) and V. DURGA RAO (Judicial Member) Viram Vijayaraghavan for the appellant. S. Dasgupta f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the learned Commissioner of Income-tax (Appeals) and the learned Commissioner of Income-tax (Appeals) confirmed the order passed by the Assessing Officer. The assessee preferred further appeal before the Income-tax Appellate Tribunal and relied on the decision of the hon'ble jurisdictional High Court in the case of CIT v. Franco Tosi Ingegneria [2000] 241 ITR 268 (Mad). The Income-tax Appellate Tribunal vide its order in I. T. A. No. 1814/Mds/2003 dated February 22, 2007 remitted the matter back to the Assessing Officer to decide the issue de novo. The Income-tax Appellate Tribunal further directed the Assessing Officer to decide the alternative plea raised by the assessee in the light of the decision of the hon'ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal before the Tribunal. Learned counsel for the assessee has submitted that the Assessing Officer has failed to follow the directions of the Income-tax Appellate Tribunal and not considered the decision in the case of CIT v. Franco Tosi Ingegneria [2000] 241 ITR 268 (Mad). He has further submitted that once the assessee has set up business, it is eligible to claim expenditure even without commencement of the business. Therefore, the assessee has already set up its business with effect from January 14, 1999 and submitted that the expenditure incurred by the assessee has to be allowed. 6. On the other hand, the learned Departmental represenative has strongly supported the orders of the authorities below. 7. We have heard both sides, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot at all directly linked to the construction activities and accordingly, the Assessing Officer has held that the interest income received by the assessee is revenue in nature and treated the income as 'income from other sources'. On appeal, the learned Commissioner of Income-tax (Appeals) confirmed the order passed by the Assessing Officer. The objection of learned counsel for the assessee is that the Assessing Officer has failed to consider the judgment of the hon'ble jurisdictional High Court in the case of CIT v. Franco Tosi Ingegneria [2000] 241 ITR 268 (Mad). We find that in the above case, the hon'ble Madras High Court, based on the findings given by the Tribunal, has observed that it is clear from the finding of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm loans secured from financial institutions is income chargeable under the head Income from other sources and would not go to reduce the interest payable by the assessee which would be capitalised after the commencement of commercial production. In the present case, the assessee has failed to substantiate that the assessee has already commenced its business operations. Therefore, keeping in view of the facts and circumstances of the case and also by following the decision of the hon'ble Supreme Court in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. v. CIT [1997] 227 ITR 172 (SC), we are of the opinion that the interest income earned by the assessee is an income chargeable under the head Income from other sources . Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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