9911796707
TMI Blog2018 (4) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal") in ITA No.1039/Ahd./2007 and ITA No. 240/Ahd./2008. 2) Brief facts: (a) The Respondent M/ s. Shree Rama Multi Tech Ltd. is engaged in the manufacture of multilayer tubes and other specialty packaging and plastic products. The dispute in the present case relates to Assessment Years 1999-2000, 2000-2001 and 2001-2002. The Respondent filed its return of income for the Assessment Year 2000-2001 declaring a total income of Rs. 20,00,59,650/. However, the Assessing Officer, vide order dated 31.03.2003, passed an order of assessment assessing the taxable income at Rs. 27,61,14,254/. But the same came to be modified in light of the decision given by the Tribunal dated 16.12.2004 in ITA No. 1481/Ahd./2004 and ITA No. 1685/Ahd./2004 wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (Appeals) by filing CIT (A) ACITC 8/74/20062007. Learned CIT (Appeals), vide order dated 05.01.2007, partly allowed the appeal filed by the Respondent while affirming the findings of the Assessing Officer in not allowing set off of interest income from share application money. (d) Being aggrieved by the order passed by learned CIT (Appeals), both the parties filed crossappeals before the Tribunal. The Tribunal, by a common judgment dated 21.10.2011, allowed the claim of the Respondent with respect to the deduction on account of interest income of Rs. 1,71,30,212 and remanded the matter back to the Assessing Officer on other issues. (e) Being aggrieved, the Revenue filed an appeal before the High Court being ITA No. 235 of 2012. A Div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either to damages or compensation and the High Court erred in arriving on such a conclusion which is not in accordance with law and is liable to be aside. 7) Per contra, learned counsel appearing on behalf of the Respondent submitted that the case is squarely covered under the Commissioner of Income Tax vs. Bokaro Steel Ltd. reported in (1999) 236 ITR 315 (SC). Learned counsel finally submitted that the judgment of the High Court was well within the parameters of law and requires no interference. Discussion: 8) The Respondent company had come out with initial public issue during the year under consideration and the amount of share application money received was deposited with the banks on which interest of Rs. 1,71,30,202/was earned whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ostallotment, the claim of the Respondent was not allowed and added to the total income under the head income from the other sources as was declared in the original return of income filed by the Respondent. 9) Coming back to the facts of the case, we may reiterate that the Respondent was statutorily required to keep share application money in the separate account till the allotment of shares was completed. Interest earned on such separately kept amount was to be adjusted towards expenditure for raising share capital. We are, therefore, of the opinion that interest earned was inextricably linked with requirement of company to raise share capital and was thus adjustable towards the expenditures involved for the share issue. Though learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case, the company had deposited certain amount with the bank to open letter of credit for purchase of machinery for setting up plant. On the money so deposited, it earned interest. In that background, this Court observed that this is not a case where any surplus shares capital money which was lying idle had been deposited in the bank for the purpose of earning interest. The deposit of money is directly linked with the purchase of plant and machinery. 12) The common rationale that is followed in all these judgment is that if there is any surplus money which is lying idle and it has been deposited in the bank for the purpose of earning interest then it is liable to be taxed as income from other sources but if the income accrued is merel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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