Receipts on account of tender form and recovery of house accommodation and furniture & fixture provided with house accommodation are of capital nature.

ACIT Vs Bharat Oman Refineries Limited (ITAT Mumbai)- So far as the receipts on account of tender forms and by way of water and electricity charges to the contractors were concerned, they would not be treated as arising out of a source of income separate from the business which was being set up. Since, the business had not been fully set up, the receipts and payments would be clearly on capital account and hence not liable to tax. In a case where these receipts and payments pertains to the fixed structure of the company’s business that was being set up, it would be inconsistent to hold that the expenditure incurred by the assessee prior to the setting up would be of a capital nature but the receipts would be of a revenue nature.Hence, the impugned receipts were of a capital nature and were not liable to tax.

IN THE INCOME TAX APPELLATE TRIBUNAL
BENCH, INDORE

ITA No. 530/Ind/2010
Assessment Year: 2007- 08

ASST. COMMISSIONER OF INCOME TAX
1(1), BHOPAL

Vs

M/s BHARAT OMAN REFINERIES LIMITED
A-BLOCK, OFFICE COMPLEX
GAUTAM NAGAR, BHOPAL

Joginder Singh, JM and R C Sharma, AM

Dated: September 14, 2011

Appellant Rep by: Shri Arun Dewan, Sr. DR