Case Law Details
Ms. Bank Note paper Mill India Pvt. Ltd Vs ITO (ITAT Bangalore)
ITAT held that where the interest receipt is directly connected or incidental to working of construction of assessee plant, it should be reduced from the capital cost of project and not be treated as income. Statement provided by assesse in form of Annexure proves the inextricable link between the interest income earned and project expenditure. The hon’ble ITAT observed that the decision of the Hon’ble Supreme Court in Tuticorin Alkali Chemicals & Fertilizers Ltd. 227 ITR 1721 was distinguished by the Hon’ble Supreme Court in the case of Bokaro Steel Ltd. (236 ITR 315) wherein it was held that the ratio of decision in Tuticorin Alkali Chemicals & Fertilizers Ltd. is not applicable where interest receipt is directly connected with or incidental to working of construction of the assessee’s plant. Therefore, the appeal was held in favour of assessee and against the revenue.
FULL TEXT OF THE ITAT JUDGMENT
These are the appeals filed by the assessee company directed against different orders of Commissioner of Income Tax (Appeals)-1, Bangalore dt.31.8.2017 for the Assessment Years 2013-14 & 2014-15. Since the issue involved in both the appeals is identical, we proceed to dispose of both these appeals vide this common order. For the sake of convenience and clarity, the facts relevant to Assessment Year 2013-14 in ITA No.165/Bang/2018 are stated herein.
2. The grounds raised by the assessee for A.Y. 2013-14 are as under :
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