2018 (7) TMI 1904

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....ur consideration: "(a) Whether on the facts and in the circumstance of the case and in law, the Tribunal was right in confirming the order of CIT(A) holding that the bare fact that the assessee deposited money in the bank itself is not sufficient to show that the deposit was made with a view to carrying out the business in the sense of earning profit by investment, ignoring that appellant had never claimed before any authority that the interest so earned is income from business and that the appellant, relying on the decision of Supreme Court in CIT v. Bokaro Steels Ltd. has been contending that interest so earned is capital receipt as is inextricably linked to the project ? (b) Whether on facts and in circumstances of the ....

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....ppeal by interalia holding as under: "Considering the facts of the present case that there was neither setting up nor commencement of business during the year under consideration, that non commencement of the project is continuing since 1993, that the money raised in form of OFCE was not raised for any construction of project or purchase of plant and machinery or for obtaining any license for letter of credit etc. but was only done with a specific and limited purpose to reduce resultant tariff of the project, that interest earned by the assessee from the nationalised banks had nothing to do with the setting up or commencing of the business, that it was a pure and simple case of accruing interest income from depositwe are of the opi....

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.... deposited with nationalised bank has nothing to do with the setting up of capital assets. Therefore, in these circumstances, interest earned could not be capitalised. We find that the decision of the Tribunal is in accord with the decision of the Apex Court in Bokaro Steels Private Ltd. (Supra) and Karnal Cooperative Sugar Mills Ltd. (Supra) wherein it has been held that income earned in connection with those activities which are directly connected with the setting up of plant and machinery could alone be capitalised. So far as the decisions of the Delhi High Court are concerned, all of them proceeded on its own facts. In Sasan Power Ltd. (Supra), it was found that interest received on unutilised commitment advances as well as interest pai....