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TMI Blog2024 (6) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... ese appeals pertaining to same assessee and are based on similar issue and identical facts, the same are adjudicated together by taking ITA No.294/Ahd/2024 pertaining to AY 2016-17 as lead case and its findings will be applicable to the other appeal of the Revenue pertaining to the AY 2017-18. 3. Common Grounds of appeal(s) taken by the Department are as under: "1) On the facts and in the circumstance of the case and in law, the Ld.CIT(A) has erred in granting the relief of Rs. 2,96,67,323/- [for AY 2016- 17] and Rs. 2,99,42,445/- [for AY 2017-18] to the assessee on account of interest income despite the fact that the facts of the case of M/s.Adani Power Maharashtra Limited (on which Hon'ble ITAT, Ahmedabad relied upon in ITA Nos.1642 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elected for scrutiny assessment and a notice u/s. 143(2) and u/s. 142(1) of the Act was issued to the assessee. The assessment was completed u/s. 143(3) on 29/09/2021, wherein the Assessing Officer computed the total income of Rs. 2,90,81,990/-. 5. Being aggrieved by the assessment order, the assessee filed the appeal before the Ld.CIT(A). The Ld.CIT(A) partly allowed the appeal of the assessee. 6. The Ld.DR submitted that the assessee-company had itself shown the interest income of Rs. 2,96,67,323/- on FDs as taxable in its return of income. Under the circumstances, it was not proper for the Ld.CIT(A) to hold that the said "interest income" was in the nature of "capital receipt". 7. The Ld.AR submitted that an identical issue was involv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as capital receipt which is adjusted against pre-operative expenses of the assessee. Therefore, the alternative ground of appeal of the assessee is allowed." 8.1. There is no dispute to the fact that the business activities of the assessee-company had not commenced in the Financial Years (FYs) 2015-16 and 2016-17 as well. The Assessing Officer has given a categorical finding, in this regard, in the assessment order itself. Thus, the interest earned on FDs during the year was prior to commencement of business of the assessee-company and was in the nature of "capital receipt" as held in the assessee's own case in the AYs 2013-14 & 2014-15. The objection of the Department is that the assessee had not shown any nexus between the funds borrow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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