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TMI Blog2016 (12) TMI 1829X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of commercial operations of the specified mega road projects will be in the nature of capital receipt and will be required to be set off against the pre-operative expenditure capitalized under the head Capital work in progress and the same cannot be brought to tax under the head income from other sources . - Decided in favour of assessee. - ITA No. 963/JP/12, ITA No. 282/JP/15 - - - Dated:- 19-12-2016 - Shri Kul Bharat, JM And Shri Vikram Singh Yadav, AM Assessee by : Shri P.P. Pareek (CA) Revenue by : Shri D.S. Kothari (CIT) ORDER Shri Vikram Singh Yadav, These are two appeals filed by the assessee against the order of the ld CIT(A)-II dated 30.10.2012 for AY 2007-08 and dated 30.01.2015 for AY 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amp at Jaipur) has also erred in considering ₹ 3,37,76,623/- as Income from Other sources rather than reducing it from the capital cost for the construction, as this amount pertains to prior to commercial operations of the road for which this amount was borrowed. (2) Without prejudice to ground 2 above it is submitted that the ld. AO has erred and ld. CIT(A) Bikaner (camp at Jaipur) has also erred in wrongly calculating the amortisation amount by not increasing the project coast by the amount of interest income ₹ 3,37,76,623/- earned from fixed deposit and taxed under income from other sources. 2. At the outset, the ld. AR submitted that ground No. 3 4 of assessee s appeal in ITA No. 963/JP/12 for A.Y. 2007-08 are covere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e s own case in ITA No. 628/JP/2014 for A.Y. 2009-10 dated 11.08.2016 are reproduced as under: 2.18 From the above, it is evident that there are two sets of judgements of Hon ble Supreme Court, proceedings on different lines of reasonings. The Hon ble Delhi High court in case of Indian Oil Panipat Consortium Ltd. (supra) has considered and interpreted the decisions of Hon ble Supreme Court in case of Tuticorin Alkali Chemicals Fertilizers (supra) as well as Bokaro Steel Ld. (supra). After analyzing both the decisions of Hon ble Supreme court, it held that the test which premeates through the judgement of the Supreme court in Tuticorin Alkali Chemicals fertilizers Ltd s case (supra) is that if funds have been borrowed for setting up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sources. We also note a distinguishing feature in the instant case that the assessee is not at liberty to use the interest so earned as per its will and discretion unlike the case in Tuticorin Alkali Chemicals Fertilizers (supra) and the interest has to be used solely for the purposes of implementation of the specified projects only. The impunged interest receipt of ₹ 35,39,479/- on such borrowed funds relates to the mega road projects/stretches which were under construction and the completed road projects/stretches upto the date of commencement of commercial operations. Therefore, the interest received prior to commencement of commercial operations of the specified mega road projects will be in the nature of capital receipt and wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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