2018 (7) TMI 1622

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.... is a capital income or a revenue income. The revenue categorised it as a revenue income in the assessment order, which was taken up in appeal. In first appeal relying on Commissioner of Income tax v. Bokaro Steel Ltd. [1999 236 ITR 315], the assessment order was overturned to the extent of finding the interest income received to be a capital income. The First Appellate Authority relied on Tuticorin Alkali Chemicals And Fertilisers Ltd. v. Commissioner of Income Tax [1997 227 ITR 172] and Commissioner of Income Tax v. Cochin Shipyard Ltd. [(2000) 158 CTR (Ker) 208]. The Tribunal, though noticed Bokaro Steel Ltd. [supra], did not consider the effect of the said decision. 2. The substantial questions of law arising are as follows: "(i) Whe....

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....he assessee was applied in setting up the factory. The Hon'ble Supreme Court held that interest income is always of a revenue nature, unless it is received by way of damages or compensation. If the capital of a Company is fruitfully utilized instead of being kept idle, the income thus generated is of a revenue nature and not an accretion to capital, was the declaration. 5. We find that a Division Bench of this Court in Cochin Shipyard Ltd. [supra] followed the aforesaid judgment. We also notice that Cochin Shipyard Ltd. was on identical facts as in the present case, wherein the assessee had entrusted work to the contractors and had advanced amounts to such contractors, for smooth commencement and completion of civil and other construct....