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of <h1>Interest on short-term deposits for letters of credit to buy plant and machinery is incidental and a non-taxable capital receipt</h1> <h3>Principal Commissioner of Income Tax-1, Bhubaneswar Versus M/s. POSCO India Pvt. Ltd.</h3> HC held interest earned on short-term deposit receipts, placed to facilitate letters of credit for procuring plant and machinery, is incidental to the ... Nature of receipt - Interest derived from Short Term Deposit Receipts - revenue or capital receipt - HELD THAT:- In view of the decision of this Court in M/s. Neelachal Ispat Nigam Limited [2021 (11) TMI 685 - ORISSA HIGH COURT] no substantial question of law as urged by the Revenue arises in the present appeal as held interest earned from STDRs made by the Appellant to enable to open LoC for procuring plant and machineries is incidental to such acquisition and should be treated as receipt of a capital nature and not taxed as income. The appeal is accordingly dismissed. The court relied on its earlier decision dated 17th November 2021 in ITA No. 8 of 2005 (M/s. Neelachal Ispat Nigam Limited v. Assistant Commissioner of Income Tax, Circle-2(1), Bhubaneswar) and held that 'no substantial question of law' as urged by the Revenue arises in the present appeal. Applying that precedent, the appeal was dismissed: 'The appeal is accordingly dismissed.' The order further directs that an 'urgent certified copy of this order be issued as per rules.' The disposition is summary, predicated on stare decisis to the cited 2021 decision, and contains no additional substantive legal analysis beyond the finding that the Revenue's grounds do not raise a substantial question of law.
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