2018 (4) TMI 1999

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....tor undertaking incorporated on 20.05.2009 as special purpose vehicle by five public sector undertakings viz. Steel Authority of India Ltd. (SAIL), Coal India Ltd. ( CIL), Rashtriya Ispat Nigam Ltd. (RINL), NDMC Ltd. (NDMC) and National Thermal Power Corporation Ltd. (NTPC) with the specific object of acquiring coal mines and assets outside India. Assessee received a sum of Rs. 157 crores from RINL, its share of call money on 29.6.2011 and Rs. 3 crores from other promoters. Since the assessee started the study for acquiring coal mines, upto 31.3.2011, it incurred a total expenditure of Rs. 4,48,78,068/- on day to day expenses for preparation of a project report, feasibility studies and other expenses and received an interest ....

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....T (A) directed the AO to assess the entire interest earned to tax under the head "Income from other sources". Challenging the same, the assessee filed this appeal. 4. It is the argument of the learned AR that the assessee is a public sector undertaking, the interest as well as the tax will go to the corpus of the Government. It is submitted that the amount, which is held by the assessee in FD for acquiring the coal mines earned interest and holding of the money in FD is inextricable linked to the business purpose, as such, any interest accrued thereon cannot be either netted of for bringing the balance to tax under the head "Income from other sources" or the entire interest earned to be brought to tax under that head. According to the lear....