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TMI Blog2018 (11) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... nstructing an air port, for which purpose advances were taken from HUDCO. The funds were parked in short term Fixed Deposits which earned interest income - Held that:- The assessee may be entitled to capitalise the interest payable by it. But what the assessee cannot claim is adjustment of this expenditure against interest assessable under Section 56. Section 57 of the Act sets out in its clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claimed under the Income Tax Act. We hence answer that question also against the assessee and in favour of the Revenue. - ITA. No. 269 of 2009 - - - Dated:- 1-11-2018 - Mr K. Vinod Chandran And Mr Ashok Menon, JJ. For The APPELLANT : ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX For The RESPONDENT : ADVS. SRI.E.K.NANDAKUMAR (SR.), SRI.K.JOHN MATHAI, SRI.P.BENNY THOMAS AND SRI.P.GOPINATH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by a decision of the Hon'ble Supreme Court in 1997(227) ITR 172 [Tuticorin Alkali Chemicals and Fertilizers Ltd.v. Commissioner of Income-Tax]. T he Assessing Officer had rejected the claim specifically citing the aforesaid decision. The Tribunal very strangely sought to distinguish the decision in the following manner. In the present case what has actually happened is the low ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act unless expressly exempted . The interest earned by the assessee is clearly its income and unless it can be shown that any provision like Section 10 has exempted it from tax, it will be taxable. The fact that the source of income was borrowed money does not detract anything from the revenue character of the receipt. The question of adjustment of interest payable by the Company against the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n salary could have been allowed as against the interest income earned by the assessee from Fixed Deposit. The assessee had claimed expenditure of salary paid to its employees from the interest income earned from the Fixed Deposits. Admittedly, at that point, there was no business income available to the assessee since the air port had not been established. The above extracted paragraph also answe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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