M/S. GANPATI GLOBAL PRIVATE LTD.,JAIPUR vs. ITO, WARD1(4), JAIPUR

ITA 302/JPR/2020Status: DisposedITAT Jaipur30 June 2021AY 2013-1431 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that interest earned on borrowed funds parked in short-term deposits during the pre-operative period is an independent source of income and not connected with construction activities. Therefore, it is taxable under 'income from other sources' without allowing deduction for interest on borrowed capital.

What were the facts?

The assessee company earned interest of Rs. 3,05,430/- on short-term deposits made from borrowed funds during its pre-operative period. The Assessing Officer and CIT(A) treated this interest as 'income from other sources'.

What were the issues?

Whether interest earned on short-term deposits of borrowed funds during the pre-operative period is taxable as 'income from other sources', and if interest expenses on borrowed funds can be set off against this income.

Which sections of the Income-tax Act were involved?

Section 57(iii)

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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR

Before: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 302/JP/2020

For Appellant: Shri Anoop Bhatia (CA) jktLo dh vksj ls@
Hearing: 05/04/2021Pronounced: 30/06/2021

PER: VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee against the order of ld. CIT(A)-I, Jaipur dated 30.01.2019 relevant for the assessment year 2013-14 wherein the assessee has raised the following ground of appeal:- “1. On facts and in circumstance of the case, the Ld. CIT(A) has grossly erred in confirming the addition made by treating the interest of Rs.

The order continues below.

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