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TMI Blog2020 (1) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) TMI 32 - DELHI HIGH COURT] funds infused in the assessee by the joint venture partner were inextricably linked with the setting up of the plant, so the interest earned could not be treated as income from other sources - Decided in favour of assessee. - I.T.A. No.6936/Mum/2018 (Assessment Year: 2014-15) - - - Dated:- 20-1-2020 - SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER Appellant by: Shri Sandeep Bhalla with Shri Saurabh Shah (AR) Respondent by: Shri Smiti Samant (CIT-DR) ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER 1. This appeal by assessee is directed against the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest income and only the net interest income should be charged as per the provisions of section 56 of Income Tax Act, 1961. 5. On the facts and circumstances of the case, the appellant denies the liability for payment of interest u/s. 234B and prays that the interest levied by the Learned AO as directed by Learned DRP shall be deleted. 2. Brief facts of the case are that the assessee is a company engaged in the business of infrastructure development. The assessee was awarded a contract for development of Highway on Built Operate and Maintenance basis by Government of Rajasthan, part of NH-11, starting from Sikar to Bikaner in the state of Rajasthan. During the year under consideration, the assessee earned i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee was dismissed vide direction dated 10.09.2018. On receipt of direction from ld. DRP, the Assessing Officer passed the final assessment order accordingly. Aggrieved by the addition in the final assessment, the assessee has filed the present appeal before this Tribunal. 3. We have heard the submission of ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the revenue and perused the material available on record. 4. At the outset of hearing, the ld. AR of the assessee submits that the grounds of appeal raised by assessee are covered by various decision of Tribunal in favour of assessee, which were passed on similar grounds of appeal in cases of assesses whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erused the material available on record. There is no dispute that assessee earned interest on deposit in Bank. Further, there is no dispute that the assessee is under the process of setting up of infrastructure facility of Expressway from Sikar to Bikaner. The assessee reduced the interest from its workin- progress. We have noted that on identical grounds of appeal, the coordinate bench of this Tribunal in Jorabat Shillong Expressway Ltd. (supra) on similar grounds of appeal passed the following order: 5. We have considered the submission of both the parties and have gone through the orders of authorities below. We have noted that similar ground interest income was treated as Income from Other Sources in Assessment Year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is earned by way of interest or any other manner on funds which are extricable linked to set up of the plant, such income is required to be capitalized to be set up of against the pre-operative expenses. It was held that test is whether activities are taken up for setting up of business and the funds which generated are extricable is connecting the setting up of the plant. 9. Thus, considering the aforesaid ratio lay down by Hon ble Delhi High Court in Indian Oil Panipat Consortium Ltd. (supra), we find that the submissions of ld DR for the revenue has no leg to stand. Therefore, the ground no. 1 to 3 of the appeal raised by assessee are allowed in favour of assessee. 10. Ground No.4 is raised in alternativ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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