2017 (1) TMI 1651

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....f Rs. 5,30,247/- received by the assessee on FDRs in the year under consideration prior to the commencement of its business. 2. The assessee in the present case is a Company, which was incorporated on 02.09.2005 with the object of manufacturing of and dealing in the Steel & Iron as well as Electrical Power Generation and Supply. During the year under consideration, it had initiated planning and survey for setting up 500 MW Thermal Power Project in Burdwan District in West Bengal but there was no commencement of business activity. Pursuant to a search and seizure action conducted in the case of the assessee on 15.01.2009, a notice under section 153A was issued by the Assessing Officer on 29.09.2009 and assessment was completed vide an ord....

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.... opportunity was already given to the assessee, the request of the assessee for adjournment is not acceded to. This appeal is accordingly being disposed of ex-parte on merit after hearing the arguments of the ld. D.R. and perusing the relevant material available on record. It is observed that the only issue involved in this appeal is regarding the treatment to be given to the interest income of Rs. 5,30,247/- earned by the assessee on FDRs during the pre-operative period and the relevant aspect that is to be considered in this context is whether the decision of the Hon'ble Supreme Court in the case of Tuticorin Alkali Chemicals and Fertilizers Limited (supra) is applicable in the facts of the assessee's case as held by the Assessing Officer....

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.... held by the Hon'ble Supreme Court that the question as to whether a receipt of money is taxable or not has to be decided according to the principles of law, and not in accordance with accountancy practice, which cannot override section 56 or any other provision of the Income Tax Act, 1961. 4. In the case of Bokaro Steel Limited (supra), the nature of income received by the assessee before commencement of its business, on the other hand, was entirely different as is evident from the relevant portion of the judgement of the Hon'ble Supreme Court passed in the said case, which is extracted hereunder:- "(1) During this period the company had given to the contractors quarters for the residence of the staff and workers employed by th....

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....s found that the assessee-company charged hire charges for such use of plant and machinery in order to cover the maintenance and wear and tear of the plant and machinery belonging to the assessee. (4) The assessee-company allowed the contractors to use the stones lying on the assessee's land for construction work. The stones lying on the assessee's company's land were the capital assets of the assessee-company. The assessee charged the contractor a certain amount by way of royalty for excavation and use of these stones for construction work. (5) The assessee had, during the assessment year 1971-72 shown in its accounts as income from interest a certain sum said to have been accrued to the assessee from M/s Hind....