https://www.taxtmi.com/caselaws?id=5705 Whether receipts arising during construction of a new industrial plant were taxable income or capital receipts turned on whether they were inextricably linked to the setting-up activity. The SC held that advances and related recoveries/receipts from contractors (including rent/amenities for housing contractor personnel and other connected recoveries) were intrinsically connected with construction, were adjusted against contractor bills, and reduced the cost of construction; they therefore constituted capital receipts not chargeable to tax. On interest, the SC applied the "real income" doctrine, holding that an interest entry later reversed due to a change in the transaction did not result in any real accrual and was not exigible to income-tax. Appeals were dismissed. en-us Fri, 18 Dec 1998 00:00:00 +0530 Thu, 18 Dec 2025 15:58:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=5705 Whether receipts arising during construction of a new industrial plant were taxable income or capital receipts turned on whether they were inextricably linked to the setting-up activity. The SC held that advances and related recoveries/receipts from contractors (including rent/amenities for housing contractor personnel and other connected recoveries) were intrinsically connected with construction, were adjusted against contractor bills, and reduced the cost of construction; they therefore constituted capital receipts not chargeable to tax. On interest, the SC applied the "real income" doctrine, holding that an interest entry later reversed due to a change in the transaction did not result in any real accrual and was not exigible to income-tax. Appeals were dismissed. Case-Laws Income Tax Fri, 18 Dec 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=5705