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TMI Blog2016 (12) TMI 1829X X X X Extracts X X X X X X X X Extracts X X X X ..... e has taken following grounds of appeal: (i) That the order passed by the DCIT, Circle-6, Jaipur or initiating proceedings u/s 147/148 is bad in law and CIT(A-II, has further erred in confirming the initiating proceedings u/s 147/148 of the IT Act, 1961. (ii) That the ld. AO has erred and Ld. CIT(A)-II has also erred in confirming initiated passing an order u/s 147/143(3) by changing of mind, by the ld. DCIT against provisions of act and well established principle of law as pronounced by the various Courts including Supreme Court. (iii) The ld. AO has erred and ld. CIT(A) -II has also erred in law as well as in facts in considering setting off interest earned against the interest paid inspite of clear cut distinction pointed out by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the grounds are again covered by the said judgement referred above. 3. The ld CIT DR is heard who has fairly accepted that the issue under consideration is covered by the decision of the Coordinate Bench referred supra. However, he relies upon the order of the lower authorities. 4. We have heard the rival contentions and perused the material available on record. The issue under consideration for the both the years relate to treatment of the interest received prior to commencement of commercial operations of the specified mega road projects. As per the Revenue, the same is to be brought to tax under the head "income from other sources." As per the assessee, it is in the nature of capital receipt and will be required to be set off agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urces". On the other hand the ratio of the Supreme court judgement in Bokaro Steel Ltd.'s case (supra) to our mind is that if income earned, whether by way of interest or in any other manner on funds which are otherwise 'inextricably linked" to the setting up of the plant such income is required to be capitalized to be set off against preoperative expenses ." "2.19 The facts in the instant case are pari materia with the facts of the Indian Oil Panipat (supra) and the ratio decidendi of Hon'ble Delhi High Court in that case will squarely apply to the facts of the assessee. In the instant case, undisputedly, the funds have been borrowed for the specific purpose of execution of the mega road projects and as per the loan agreement executed be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1 of the assessee is allowed." 5. Undisputedly, there are no changes in the facts and circumstances of the case. No contrary authority has been brought to our notice subsequent to above decision of the Coordinate Bench or the fact that said decision of the Coordinate Bench has been stayed by the Hon'ble High Court. In view of the similar facts and circumstances of the case and respectfully following the decision of Coordinate Bench in assessee's own case (supra), we hold that the interest received prior to commencement of commercial operations of the specified mega road projects will be in the nature of capital receipt and will be required to be set off against the pre-operative expenditure capitalized under the head "Capital work in pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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