Interest from borrowed funds which temporarily held in interest bearing deposit is capital cost: Delhi HC

PCIT Vs International Coal Ventures Pvt Ltd (Delhi High Court) Delhi High Court held that the interest received on borrowed funds, which were temporarily held in interest bearing deposit, is a part of the capital cost and is required to be credited to Capital Work-in-Progress. Facts- During the course of the assessment proceedings, the AO noticed that the Assessee had earned an amount of ₹11,45,92,550/- in respect of the funds received from its promoters. The Assessee had also paid interest to its promoters amounting to ₹11,14,73,651/-. According to the AO, the difference between the inter...