9911796707
TMI Blog2013 (6) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... - SUPREME Court] & M.P. State Industries Corporation (1968 (4) TMI 2 - MADHYA PRADESH High Court) wherein held that the interest earned by investing the surplus share money in bank deposits, such interest is taxable as income from other sources and not as business income. Also see Shree Krishna Polyster Ltd (2004 (10) TMI 42 - BOMBAY High Court). Not a fit case for filing an SLP before the Apex Court. The prayer made by the appellant is rejected. - ITA No.238/2012 - - - Dated:- 29-4-2013 - Krishn Kumar Lahoti And M. A. Siddiqui,JJ. For the Appellant : Shri G. N. Purohit, learned Sr. Advocate with Shri Abhishek Oswal For the Respondent Shri Sanjay Lal ORDER This appeal is directed against an order dated 30.7.2012 pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... established its refinery at Agasod, Bina, District Sagar (M.P.) (ii) That, as per approval granted by the Government of India, the share of BPCL was restricted to 50% of the equity. For raising funds from Banks and financial institutions, a debt equity ratio was fixed as 1.6:1. The initial equity capital of BPCL and Oman Oil Company Limited was 151 Crores. (iii) That, to satisfy the debt equity ratio of 1.6:1 for raising a loan of Rs.1350.31 Crores, the company was required an additional equity due to embargo of 50% imposed by the Government of India and there being no progress in work for quite sometime, Oman Oil withdrew itself for arranging fresh capital. (iv) As per appellant, the BPCL had introduced 900 Crores in the form of zero ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also preferred before the Income Tax Appellate Tribunal but that was also dismissed. These orders have given the appellant a cause for filing this appeal. The main contention of the appellant before this Court is that aforesaid amount was zero coupon money and was parked with the banks and the interest earned on the amount was not liable to income tax as income from other sources, but the interest could have been treated as income from the business and could have been assessed because it will reduce cost of construction of the industries and thereby will reduce the capital invested by the appellant. Apart from this, the amount of Rs.500 Crores was parked with the bank to satisfy the debt equity ratio as was necessary to be maintained as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income Tax (2005) 274 ITR 21 (Bom.) and relying on the judgment in Tuticorin Alkali Chemicals Fertilizers (supra) held that such interest can be treated as an income from other sources and was not a business income. We have considered the rival contentions of the parties and find that in Tuticorin Alkali Chemicals Fertilizers (supra), the Apex Court considering the legal position held that the interest earned by the assessee before commencement of business on short term deposits with banks, even out of term loans secured from financial institutions, is an income chargeable under the head income from other sources and would not go to reduce the interest payable by the assessee which would be capitalised after the commencemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
