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TMI Blog2015 (6) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... eting the addition made by the Assessing Officer of Rs. 70 lakhs under the head "income from other sources" 2. Since these appeals were heard together, they are being disposed of through this consolidated order for the sake of convenience. 3. The facts in brief borne out from the record are that the assessee has earned income from sale of tender documents at Rs. 70 lakhs in assessment year 2008-09 and Rs. 35 lakhs in assessment year 2009-10 and the same were treated as capital receipt and adjusted against the preoperative expenses reducing the cost of project. The Assessing Officer, having examined the legal position, came to the conclusion that the income from sale of tender documents was to be assessed as income from other sources and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l power project at Tehsil Bara, Allahabad. During the course of setting up of the plant the appellant derived income of Rs. 70,00,000/- by way of sale of tender documents to prospective bidders. The AO treated the income as "income from Other Sources' which the appellant claims is not chargeable top tax. 5(5) I find that the judicial decisions in Tuticorin Alkali Chemicals and Fertilizers Ltd. 227 ITR 172 and CIT Vs Indo Gulf Fertilizer & Chemical 280 ITR 521 (All) relied upon by the AO are not applicable to the facts of the case in so far as these decisions relate to chargeability of interest income during period of construction and not income from sale documents. I find that the issue is covered by decision of Hon'ble Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch cost. Similarly, sale proceeds of trees, grass, stones and boulders go to represent the capital cost of the land utilized for the construction of the factory and the erection of equipment of the factory and the erection of equipments. These receipts were directly related to the capital structure of the business and they cannot be considered as an independent source of income unrelated to the business to the business which was being set up. 5(6) The tender forms were supplied by the assessee to the contractors not in order to earn income nor is the sale of tender forms a source of income as understood commonly. This activity was rather a part and parcel of the constructional activities of the assessee. The source is not independent of, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arnataka Power Corporation", 247 I.T.R. 268(SC) and "Bongaigaon Refinery and Petro Chemical Co. Ltd. vs. CIT, 251 I.T.R. 329(SC), that any receipt inextricably linked to the setting up of the project is capital receipt not liable to tax and going to reduce the cost of the project. 5(7) In view of above discussion the income from sale of tender documents of Rs. 70,00,000/- is a capital receipt and cannot be chargeable to tax under the head 'Income from other Sources'. The addition of Rs. 70,00,000/- made by the AO is deleted giving consequential relief to the appellant." 5. Aggrieved, the Revenue has preferred an appeal before the Tribunal and has simply placed reliance upon the orders of the Assessing Officer whereas the ld. coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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