TMI Blog2018 (6) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... running of an assessee but a capital receipt would be one which goes towards funding the capital assets of a company like the enhancement of its manufacturing facility or the acquisition of more advanced equipment and the like. - Decided in favour of assessee Deduction of the interest paid on obtaining a loan u/s 36 - Held that:- Both the Commissioner (Appeals) and the Appellate Tribunal noticed an agreement between the assessee, the National Dairy Development Board and the West Bengal Cooperative Mill Producers Federation Limited to set up a joint venture company for the production of milk. The assessee is engaged in the business of the manufacture and sale of fruit juice and like products. The setting-up of a joint venture company wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same has to be regarded as a revenue receipt or a capital receipt. The scheme of the State Government is the same as in the case of ITA 37 of 2018 (Principal Commissioner of Income Tax Vs. Shyam Steel Industries Limited) which was decided on May 7, 2018. As would be evident from the judgment and order of May 7, 2018, this Court relied on the Supreme Court judgments reported at 228 ITR 238 (Sahney Steel Press Works V. CIT) and 306 ITR 392 (CIT V. Ponni Sugars Chemicals Ltd.) to hold that it is the purpose of the grant under a scheme which is of paramount importance while assessing whether the money received thereunder ought to be treated as a revenue receipt or a capital receipt. In that case, this Court concluded that since the scheme p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the funds borrowed by the assessee had to be regarded as a payment made for the purpose of the business of the assessee and a permissible deduction under Section 36(1)(iii) of the Act. In any event, the Commissioner (Appeals) noticed in the earlier of his two orders that in respect of previous assessment years the relevant Assessing Officers had not found fault with the interest payment being claimed as deduction. Since concurrent findings on the question have been rendered by the Commissioner (Appeals) and the Appellate Tribunal and the nature of the investment made by the assessee with the borrowed funds appears to be in the line of its business, the legal issue does not call for any reconsideration. ITAT 175 of 2014 along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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