I.T.O. WARD -1(1), RAIPUR (CG) vs. M/S CMDC ICPL COAL LTD, RAIPUR (CG)

ITA 271/BIL/2014Status: DisposedITAT Raipur12 October 2018AY 2011-1221 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the interest income earned on funds temporarily parked in banks was inextricably linked to the setting up of the project and was a capital receipt, not taxable as income from other sources. This income should be used to reduce the cost of the project and pre-operative expenses.

What were the facts?

The assessee company, a joint venture, earned interest on surplus funds parked in banks while awaiting approvals and land acquisition for its coal mining project. The Assessing Officer treated this interest income as taxable "Income from other sources".

What were the issues?

Whether interest earned on surplus funds parked during the pre-operative period of a project is a revenue receipt or a capital receipt.

Which sections of the Income-tax Act were involved?

Section 4,Section 36(1)(iii)

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Cases cited in this judgment(10)Show list

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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: SHRI R. K. PANDA & MS. SUCHITRA KAMBLE

For Appellant: Shri R. B. Doshi, CA
For Respondent: Shri Ajit Kumar Laskar, DR, Shri R. B. Doshi, CA

PER R. K. PANDA, AM : This appeal filed by the Revenue is directed against the order dated

02.07.

2014 of the ld. CIT(A), Raipur (CG) relating to assessment year 2011-12. 2. The only effective ground raised by the Revenue reads as under :- “Whether in law and on facts & circumstances of the case, the learned CIT(A) has erred in deleting the addition of Rs.1,22,54,520/- made by the AO on account of interest earned in surplus funds parked with banks, treating it as income from other sources being a revenue receipt?”

3.

Facts of the case, in brief, are that the assessee company is a joint venture

company between Chhattisgarh Mineral Development Corporation Limited

(CMDCL) and IFFCO Chhattisgarh Power Limited (ICPL). The obje

The order continues below.

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