2017 (11) TMI 627

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....w, the Ld. CIT (A) has erred in deleting the disallowance of interest during construction period amounting to Rs. 2,93,00,000/- by not considering the detailed observation of the AO that in view of the clear directions conveyed vide proviso to section 36(1)(iii) of the Income Tax Act that the interest, paid or payable on borrowings in respect of unit-II which cannot be first put to use till 31.03.2010, to be capitalized without set off of interest earned of Rs. 293 lakh from the banks even on deposit of temporarily surplus funds and is taxable under the head "income from other sources". 2. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the disallowance of interest during construction pe....

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....f the case, the appellant craves to be allowed to add any fresh grounds of appeal and/or delete or amend any of the grounds of appeal." 2. Briefly stated facts are that the assessee company is a JV company supplying whole of the power generated by it from its old plants to SAIL and the newly set up power plant to SAIL and the State Electricity Boards as per agreed ratios at the time of its approval. The tariff to be charged is as per the method approved by CERC - a statutory body. For the AY 2010-11 assessee filed the return of income on 01.10.2010 declaring a total loss of Rs. 6,30,03,76,000/-, paid tax of Rs. 21,48,00,023/- u/s 115JB on the declared book profits of Rs. 126,39,01,289/-. During the year under consideration, the assessee ....

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.... ITO (2009) 315 ITR 255 (Del.) and decision of Hon'ble Jurisdictional Delhi High Court in appellant's own case of NTPC Sail Power Company (P) Ltd. vs. CIT in ITA No. 1238/2011 in decision dated 17/07/2012 for the AY 2007-08 on identical issue in respect of the addition of interest, and Calcutta Co. Ltd. vs. CIT 37 ITR 1, Metal Box Co. of India Ltd. vs. Their workmen 73 ITR 53 and Bharat Earth Movers Ltd. vs. CIT 245 ITR 428 in respect of the additions made in respect of the net provision of retirement benefits. 3. Aggrieved by the impugned order, the Revenue is before us in this appeal stating that the detailed observations of the AO were not properly considered by the Ld. CIT (A) and the interest paid or payable on borrowings in respect....