TMI Blog2018 (9) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... matter was called for hearing. However, an adjournment petition has been filed by the assessee stating that ld. AR of the assessee is having severe chest infection, continuing fever and diabetic related complications and, therefore, he is unable to appear before the bench on the date of hearing, which in our opinion is not a plausible one and, hence, the adjournment petition filed by the assessee is rejected. Accordingly, the Bench proceeded to dispose off the appeal after considering the facts and material available on record and the submissions of ld. DR. 3. Since the issues involved in all the cases are identical, therefore, all the appeals along with cross objections have been heard and are being disposed off by this consolidated order en masse. 4. First we shall decide the appeals of Revenue in ITA No.403 344/CTK/2017 for the assessment year 2011-12 2013-14. 5. The only common issue raised by the revenue in both the appeals is that the CIT(A) erred in deleting addition of interest income of ₹ 1,14,46,578/- for the assessment year 2011-2012 and ₹ 24,60,63,081/- for the assessment year 2013-2014 holding that such interest on FDs cannot be taxed in the han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Tribunal while considering this issue has held as under: We have heard the rival parties and perused the material available on record. On our careful consideration of the facts and circumstances of case as brought on record by the authorities below, we are inclined to find the contention of the learned Counsel of the assessee appropriate to the extent that it was never a change of stance on the facts remaining the same beginning from Assessment Year 2006-07. It was a misconstruction of the facts for the purpose of finding applicability of the provisions of law enunciated by the Hon'ble Apex Court in the case of Tuticorin Alkali Chemicals Fertilizers Ltd v. CIT (supra). The law enunciated in the case of Tuticorin Alkali Chemicals Fertilizers Ltd v. CIT(supra) cannot alone be considered as favoring Revenue insofar as it also talks about capitalization of the interest and the circumstances, which circumstances have been dealt with by the Hon'ble Delhi High Court in the case of Indian Oil Panipat Power Consortium Ltd v. ITO (supra) and further more in the case of NTPC Sail Power Company Pvt. Ltd., v.CIT decided on17.07.2012 in ITA No.1238/2011 (copy placed on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the bank would have a huge different than that of business and be brought to tax under the head Income from other sources . It is well-settled that an income received by the assessee can be taxed under the head Income from other sources only if it does not fall under any other head of income as provided in section 14 of the Act. The head Income from other sources is a residuary head of income. In the instant case, it was clear upon a perusal of the facts as found by the authorities below that the funds in the form of share capital were infused for a specific purpose of acquiring land and the development of infrastructure. Therefore, the interest earned on funds primarily brought for infusion in the business could not have been classified as 'income from other sources Since the income was earned in a period prior to commencement of business, it was in the nature of capital receipt and, hence, was required to he set off against pre-operative expenses. We are inclined to find a meaning to the insertion of the proviso to Section 36(l)(iii) that interest paid, in respect of capital borrowed for acquisition of an asset for extension of existing business or profession was b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord for the AYs in appeal before us are as under : Rs. in Lakhs Particulars. As on 31.3.2006 As on 31.3.2007 As on 31.3.2008 Share Capital 22500.00 22500.00 22500.00 Land(CWIP) 307.00 664.74 1440.85 Bank Deposit. 19190.00 1289.00 - Interest from Bank 637.44 1,04.17 432.67 Pre-operative Expenses. 629.76 3736.28 5280.69 The returns filed by the assessee for the AYs 2006-07 and 2007-08 clearly indicate that the assessee at no point of time was having income from other sources irrespective of the accounting of the income having been capitalized when the claim of expenditure of 10% was purely on estimation when apparently it was not the business of the assessee to earn income but parking of its funds when the interest income sought to be considered exempt fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer filing NIL return. The appeal for the Assessment Year 2008-09, therefore, is allowed on the basis of facts and figures brought on record by the Assessing Officer as well as the learned CIT(A) and as mentioned above. However in view of the principles laid out above, we are inclined to restore the issue to the file of the Assessing Officer for the Assessment2006-07 and 2007-08 to consider the case of the assessee de novo on establishing the fact that the interest has been earned on the parking of share generated as was considered by the Hon'ble Apex Court insofar as the earning of interest has been capitalized by reducing the project cost to be amortized has to be considered as a nullity after verification. Needless to say, an opportunity of being heard to the assessee be granted to establish the fact as have been narrated before us in the light of Assessment Year 2008-09 when it is not a change of stance as contested by the learned DR but on the same set of facts the interest portion cannot be isolated for the purpose of taxation. 6. In the result, the appeal for the Assessment Year 2008-09 is allowed and the learned Assessing Officer is directed to accept the N ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
