TaxTMI 
TaxTMI 
2011 (2) TMI 1520
X X X X Extracts X X X X
X X X X Extracts X X X X
....h specific purpose to set up Regasification Terminal. Four Public Sector Undertaking namely M/s Indian Oil Corporation Ltd., M/s Bharat Petroleum Corporation Ltd., M/s Oil and Natural Gas Corporation Ltd. and M/s Gas Authorities of India Ltd. are the promoter companies of the assessee which hold 50% equity shares in the assessee company. These companies had contributed a sum of Rs. 70 crores in the assessment year 2000-01 and Rs. 40 crores in the assessment 2001-02 as share capital money. The shares were yet to be allowed. Since the business was in the process of being set up in these assessment years, in respect of which appeals are filed are A.Y. 2001-02, 2002-03 and 2003-04. These funds are lying with the bank on which the interest was r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r companies in the form of share application money for which shares were to be allowed and the said money was to be utilized for the purpose of purchasing requisite plant and machinery. This application money was thus to be utilized for the purchase of capital assets. This fact is specially taken note and discussed in para 9 of the impugned order, inter alia observing as under:- "the learned counsel for the assessee has then drawn attention to page 91 (back) of the APB, i.e., the assesee's Annual Report for assessment Year 2000-01. Item (c) at this page is "EPC Contract". It states that the company had awarded a Lumpsum Turnkey Contract for Engineering, Procurement, Construction and Commissioning in December 2000 by following a trans....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... linked for the setting up of the project. On these facts being established, the Tribunal applied the ratio of the judgment of this Court in the case of Indian Oil Panipat Power Consortium Ltd. Vs. ITO, 315 ITR 254 as well as the Commissioner of Income Tax Vs. Panem Coal Mines Ltd. ( ITA No. 639/2008 decided on 17th September, 2009). 5. In the aforesaid two judgments of this Court after discussing the legal principle in detail, the Court has held that if the interest earned on the fund which are to be utilized for purchase of capital asset/ setting up of the business and that is inextricably linked with the setting up of the business, said interest will not be treated as income under the head "income from other sources". 6. While coming t....