Interest on deposits linked to business setup was capital receipt and not taxable as ‘Income From Other Sources’

VNG Automotive Private Limited Vs ACIT (Delhi High Court) Conclusion: Interest earned on funds kept in bank during business setup, when those funds were directly linked to the project, was a capital receipt and not taxable as “income from other sources”. Held: Assessee-company had deposited unused funds in bank while setting up its business and earned interest. The company adjusted this interest against pre-operative expenses but AO treated it as taxable income and reopened the assessment. Assessee company argued that the money was not surplus, it was meant for business purposes like machi...