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5.2 It is clear upon a perusal of the facts as found by the authorities below that the funds in the form of share capital were infused for a specific purpose of acquiring land and the development of infrastructure. Therefore, the interest earned on funds primarily brought for infusion in the business could not have been classified as income from other sources. Since the income was earned in a period prior to commencement of business it was in the nature of capital receipt and hence was required to be set off against pre-operative expenses. In the case of Tuticorin Alkali Chemicals & Fertilisers Ltd. (supra) it was found by the authorities that the funds available with the assessee in that case were 'surplus' and, therefore, the Supreme Court held that the interest earned on surplus funds would have to be treated as 'income from other sources' . On the other hand in Bokaro Steel Ltd.'s case (supra) where the assessee had earned interest on advance paid to contractors during pre-commencement period was found to be 'inextricably linked' to the setting up of the plant of the assessee and hence was held to be a capital receipt which was permitted to be set off against pre-operative expenses.

ITA No. 668 to 670/JP/2019 M/s Road Infrastructure Dev. Com. of Rajasthan Ltd. vs. ACIT "The Company is engaged in construction of Mega Highway Roads, which involves of displacement of various families, domicile of shops car some other inconveniences to the various villages of nearby areas. As per the Partnership & Development agreement (PDA) executed with the Government of Rajasthan, the Company was authorized to undertake, participate and support environmental, community development/social activities viz. develop schools, creation of some infrastructure facilitie s, welfare of commuters or any other activities by which the common man life is improved or made more convenient, alongside the project road."

vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- M/s Road Infrastructure Development Company of Rajasthan Ltd., Jaipur.

2. izR;FkhZ@ The Respondent- ACIT, Circle-6, Jaipur.

3. vk;dj vk;qDr@ CIT

4. vk;dj vk;qDr@ CIT(A)

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.

ITA No. 668 to 670/JP/2019 M/s Road Infrastructure Dev. Com. of Rajasthan Ltd. vs. ACIT