Reassessment after 143(1) processing and project-linked interest held not taxable as income from other sources.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Where the original return was only processed under section 143(1), there was no assessment order reflecting formation of opinion, so reopening could not be struck down as a mere change of opinion and the Tribunal could examine the jurisdictional issue. On merits, interest earned on deposits of funds earmarked for acquisition of technical know-how, land, machinery and other project commitments had a direct nexus with setting up the manufacturing business. Such receipts were therefore to be adjusted against pre-operative expenditure and not taxed as income from other sources. The High Court upheld reassessment but rejected the Revenue's treatment of the interest as taxable income.....