9911796707
TMI Blog2025 (3) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... lant. Since, the above fund inextricable linked with the setting up of the plant, the decision of Bokaro Steels Limited [1998 (12) TMI 4 - SUPREME COURT] is clearly applicable in applicant's case and ld. CIT(A) has not erred in relying the same. The grounds have no substance. Disallowance of premium received on the shares issued - AO made addition of book share premium of shares @Rs.2/- as excessive share premium per share due to the reason that, identity, genuineness and creditworthiness of the investor was not proved - CIT(A) deleted addition - HELD THAT:- Conclusion of ld. CIT(A) that the allotment of shares to an existing shareholder cannot be construed to be an investor whose identity and creditworthiness were not proved, needs no int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and perused the record. The facts in brief are, the appellant company filed its Return of Income for the A.Y. 2017-18 on 25.10.2017 declaring NIL income. Subsequently, appellant company revised its Return of income on the same date i.e. 25.10.2017, thereby, showing an increase credit of TDS at an income of Rs. NIL. Thereafter, the instant case was selected for limited scrutiny through CASS on the following grounds: a) Share premium b) Investment in immovable property 2.1 Mandatory notices were issued and the Assessing Officer has passed assessment order u/s 143(3) of the Act on 22.12.2019 by making following additions: a) Addition of Rs. 52, 00, 000/- on account of share premium received: On perusal of Balance Sheet submitted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not allow the same, as revenue expenditure, as per Section 35D of the Act. Hence, the claim of preliminary expenses by the appellant company amounting to Rs. 72, 59, 610/- was disallowed. c) Claim of expenses against interest income of Rs. 94, 78, 739/-: During the course of assessment proceedings, appellant was asked to furnish the explanation with regard to the interest income which was not declared under the head 'Income from other Sources'. In response to the above, appellant company filed its reply and on perusal of the same, it was observed by the AO as per ITR form, the nature of business of the company was contract work, therefore, company was not involved in any type of financing activity during the year under consideration. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal at any time before or during the hearing of this appeal." 4. Ground no. 1 and 2: This issue is arising out of disallowance of interest earned during the set-off of business. We find that the Assessing Officer has made addition of Rs. 94, 78, 739/- as interest earned during the process of setting up of new business under the head 'Income from other sources' by relying on the decision of Hon'ble Supreme Court in the case of Tuticorin Alkalies Chemicals & Fertilizers Ltd. (vs) CIT, 221 ITR 172, wherein, it has been held that, interest earned prior to the commencement of the business is taxable as 'Income from other sources'. However, before ld. CIT(A), the assessee has submitted that, Hon'ble Supreme Court has held in the subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such deposits was set-off against the capital work in progress during the year. Since, the above fund inextricable linked with the setting up of the plant, the decision of Hon. Supreme Court in the case of CIT (vs) Bokaro Steels Limited (cited supra) is clearly applicable in applicant's case. 4.5 The submission of the appellant and the facts stated by the Assessing Officer in assessment order have been considered. It is found that the Assessing Officer has relied on the decision of Hon. Supreme Court in the case of Tuticorin Alkalies Chemicals and Fertilizer Limited (vs) CIT 221 ITR 172, whereas, the Assessing Officer has not given any findings on the non-applicability of the decision of Hon. Supreme Court in the case Bokaro Steel Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, the appeal filed by the appellant on this grounds is allowed. 5. In the end result, the appeal of the appellant is hereby allowed.'' 5. Now in terms of the ground as raised before us, we find that there is no case of department as to how disputed interest is not inextricable linked with the setting up of the plant. The nature of deposits have been duly examined in AY2018-19 and found to be inextricable linked with the setting up of the plant. Since, the above fund inextricable linked with the setting up of the plant, the decision of Hon. Supreme Court in the case of CIT (vs) Bokaro Steels Limited (cited supra) is clearly applicable in applicant's case and ld. CIT(A) has not erred in relying the same. The grounds have no substan ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
