9911796707
TMI Blog2015 (11) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... re of M/s. Tamilnadu Integrated Development Corporation and M/s. Electronic Corporation of Tamilnadu. This project was conceived for the promotion of software development in terms of creating infrastructure. The company was incorporated on December 2, 1997. Certificate for commencement of business was effective from April 20, 1998. Letter of intent for joint venture was issued on January 14, 1999 and the project was approved by the Central Government on May 24, 1999. The assessee-company filed its return of income by admitting nil income. The return filed by the assessee was processed under section 143(1) of the Income-tax Act, 1961, on October 12, 2001 and thereafter, the assessment was completed under section 143(3) of the Act on February ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough various sources, i.e., debentures and term loans from various banks. Funds which are not utilised immediately for the construction of the Tidel Park project and the funds are invested in various securities like ICICI Bank, PNB Gilts, etc. The assessee has received interest income from the above securities. Therefore, the Assessing Officer has held that interest income received from the securities is not inextricably linked with the setting up of business or construction activity of the Tidel Park and the receipt of the interest income is not directly linked with construction activities. The Assessing Officer, by following the decision in the case of CIT v. Bokaro Steel Ltd. [1999] 236 ITR 315 (SC), held that the interest income receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commencement of business was effective from April 20, 1998. Letter of intent for joint venture was issued on January 14, 1999 and the project was approved by the Central Government on May 24, 1999. 8. In the assessment order, the Assessing Officer has observed that the assessee has raised funds through various sources, i.e., debentures and term loans from various banks. Funds which are not utilised immediately for the construction of the Tidel Park project and the funds are invested in various securities like ICICI Bank, PNB Gilts, etc. The assessee has received interest income from the above securities. Therefore, the Assessing Officer, by following the decision of the hon'ble Supreme Court in the case of CIT v. Bokaro Steel Ltd. [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find that the above judgment has no application to the facts of the present case for the reason that the assessee has not been able to establish either before the authorities below or even before us that the assessee has already commenced its operations. 9. Though the Assessing Officer has not specifically considered the judgment of the hon'ble Madras High Court in the case of CIT v. Franco Tosi Ingegneria [2000] 241 ITR 268 (Mad), however, the Assessing Officer has considered the judgment of the hon'ble Supreme Court in the case of CIT v. Bokaro Steel Ltd. [1999] 236 ITR 315 (SC) and held that the interest income earned through short-term deposits by investing the borrowed capital as income not connected with the construction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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