https://www.taxtmi.com/caselaws?id=14621 Interest earned on short-term deposits of borrowed funds before business commencement is treated as taxable revenue income, not as a non-taxable adjustment against borrowing costs. Where an assessee is still setting up its business and has not commenced production, temporary investment of unutilised borrowings does not change the character of the interest income, and it cannot be netted off against interest payable on loans used for capitalisation. The principle applied is that pre-commencement income from a non-business source remains taxable under the Income-tax Act, 1961, and the referred question was answered in favour of the Revenue. en-us Fri, 06 Nov 1998 00:00:00 +0530 Fri, 17 Jul 2009 16:00:59 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=14621 Interest earned on short-term deposits of borrowed funds before business commencement is treated as taxable revenue income, not as a non-taxable adjustment against borrowing costs. Where an assessee is still setting up its business and has not commenced production, temporary investment of unutilised borrowings does not change the character of the interest income, and it cannot be netted off against interest payable on loans used for capitalisation. The principle applied is that pre-commencement income from a non-business source remains taxable under the Income-tax Act, 1961, and the referred question was answered in favour of the Revenue. Case-Laws Income Tax Fri, 06 Nov 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=14621