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of <h1>Interest on short-term deposits for letters of credit is incidental to asset acquisition and treated as non-taxable capital receipt</h1> <h3>Principal Commissioner Of Income Tax 1 Bhubaneswar Versus M/s. Posco India Pvt. Ltd.</h3> HC had held that interest earned on short-term deposit receipts used to enable opening a letter of credit for procuring plant and machinery was incidental ... Nature of receipt - Interest derived from Short Term Deposit Receipts - revenue or capital receipt - HC [2022 (5) TMI 1684 - ORISSA HIGH COURT] held that 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. HELD THAT:- The special leave petition is disposed of owing to low tax effect. The question of law, if any, is kept open. Consequently, all pending application(s) including the application(s) for condonation of delay would not survive for further consideration and shall also stand disposed of. Learned A.S.G. for the petitioner/Revenue submitted that the special leave petition would not survive for further consideration 'owing to low tax effect,' and that submission was placed on record. The special leave petition is accordingly 'disposed of owing to low tax effect.' The Court expressly stated that 'The question of law, if any, is kept open,' leaving substantive legal issues undetermined. All pending application(s), including the application(s) for 'condonation of delay,' were indicated to 'not survive for further consideration' and 'shall also stand disposed of.' The order thus resolves the petition on the basis of minimal tax impact without adjudicating underlying legal questions, and terminates ancillary proceedings connected to the petition.
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