TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal Upholds Taxability of Interest Income on Surplus Funds</h1> <h3>M/s H.P. Power Transmission Corp. Ltd. Versus The ITO, Ward-1, Shimla</h3> M/s H.P. Power Transmission Corp. Ltd. Versus The ITO, Ward-1, Shimla - TMI Issues:1. Taxability of interest income earned by the assessee company on surplus funds.2. Treatment of interest income as income from other sources.3. Applicability of judgments in determining tax liability.Analysis:1. The appeal was directed against the addition of interest income of Rs. 9,46,51,086 made to the taxable income of the assessee company. The company, in a pre-operational stage, earned interest on surplus funds. The auditors noted that income earned during the construction period is not taxable. The company had not commenced business operations or production in the relevant assessment year.2. The assessing officer confronted the assessee with a show cause as to why the interest earned on surplus and borrowed funds should not be taxed as 'income from other sources'. The AO relied on the judgment of the Supreme Court in Tuticorin Alkali Chemicals & Fertilizers Ltd. Vs. CIT (1997) and held that the interest earned was assessable under the head income from other sources. The AO concluded that the interest income was taxable for Assessment Year 2012-13.3. The assessee challenged the AO's order before the ld. CIT(Appeals), who noted that similar issues were decided against the assessee in previous assessment years. The order of the ld. CIT(Appeals) dated 05.11.2014 was confirmed by ITAT in previous years. The ld. CIT(Appeals) found that the issue was covered against the assessee by previous ITAT orders and dismissed the appeal.4. The counsel for the assessee conceded that the issue was covered against the assessee by previous ITAT orders. The Tribunal had dismissed appeals of the assessee in previous years on identical grounds. Considering the precedents and previous decisions, the Tribunal concluded that the issue was covered against the assessee by various orders of ITAT Chandigarh Bench. The appeal of the assessee was dismissed as it lacked merit.In conclusion, the Tribunal upheld the taxability of interest income earned by the assessee company on surplus funds as income from other sources based on previous judgments and decisions. The appeal was dismissed as the issue was covered against the assessee by previous ITAT orders.
TaxTMI 