Tribunal allows appeals, considers delays, remits interest issue, upholds TDS disallowance.

The appeals were partly allowed by the Tribunal. The delays in filing appeals were condoned due to valid reasons, and the cases were taken up for adjudication on merits. The issue of interest earned on unutilized funds was remitted back to the Assessing Officer for examination, with directions to tax the income in the year it is eligible for use. The disallowance of interest on late payment of TDS and the restriction of TDS credit were upheld by the Tribunal, dismissing the grounds of appeal in those regards.

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Issues Involved:
1. Delay in filing appeals.
2. Treatment of interest earned on unutilized funds.
3. Disallowance of expenditure on interest for late payment of TDS.
4. Credit for TDS on utility shift advances and mobilization advances.

Detailed Analysis:

1. Delay in Filing Appeals:
The appeals filed by the assessees suffered from delays of 57 and 10 days respectively. The delay was attributed to the preoccupation of the companies' MDs with other important work. Citing case law such as *Collector Land Acquisition vs Mst. Katiji & Ors* and *University of Delhi Vs. Union of India*, the Tribunal held that the delay, supported by cogent reasons, deserved to be condoned to ensure substantial justice. Thus, the delays were condoned, and the cases were taken up for adjudication on merits.

2. Treatment of Interest Earned on Unutilized Funds:
The primary issue was whether the interest income of Rs. 87,73,686/- earned from short-term investments should be treated as "Income from Other Sources" or be adjusted against the capital work in progress. The assessee argued that the funds were temporarily invested as per the mandate of NHAI and should be deducted from the capital work in progress. The Assessing Officer (AO) treated the interest as "Income from Other Sources" based on the decision in *Tuticorin Alkali Chemicals and Fertilizers Ltd.*. The CIT(A) upheld this view.

The Tribunal, after considering submissions and various judgments including *Bokaro Steels Ltd.*, noted that the funds were mandatorily invested as per the Escrow Agreement and the interest earned was inextricably linked to the project. Hence, the Tribunal remitted the issue back to the AO for examination, directing that the income should be taxed in the year it is eligible to be utilized, treating the ground as allowed for statistical purposes.

3. Disallowance of Expenditure on Interest for Late Payment of TDS:
The AO disallowed an amount of Rs. 17,03,927/- related to interest on late payments of TDS, treating it as non-allowable under Section 37 of the Act. The CIT(A) confirmed this disallowance, stating that it was a penal interest for non-remittance of TDS, which is a serious offence.

The Tribunal referred to the decision in *Govindam Clearing Agencies Pvt. Ltd. Vs. DCIT* and other relevant cases, concluding that interest on delayed payment of TDS is not allowable as business expenditure under Section 37(1) of the Act. Therefore, the Tribunal upheld the CIT(A)'s order, dismissing the ground of appeal.

4. Credit for TDS on Utility Shift Advances and Mobilization Advances:
The AO restricted the credit for TDS to Rs. 2,96,061/- as the corresponding receipts were not offered as income in the impugned assessment years. The CIT(A) confirmed this decision.

The Tribunal found no error in restricting the TDS credit and directed the AO to give credit in the year when the corresponding receipts are offered as income by the assessee, after due verification. The assessee was also directed to produce necessary documentary evidence for proof of TDS payment by the deductor. Thus, the Tribunal upheld the CIT(A)'s order and dismissed the ground of appeal.

Conclusion:
The appeals were partly allowed, with the Tribunal remitting the issue of interest earned on unutilized funds back to the AO for further examination and confirming the disallowance of interest on late payment of TDS and restriction of TDS credit.

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