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M/S. Ganpati Global Private Ltd., ... vs Ito, Ward1(4), Jaipur on 30 June, 2021 cites

Wns Global Services P.Ltd, Mumbai vs Ito 10(2)(4), Mumbai on 16 January, 2019

20. Drawing support from the analysis so done by the Coordinate Bench of various authorities on the subject, with which we find no reason but to follow and endorse, we agree with the contention advanced by the ld. DR that in the instant case, the matter is squarely covered against the assessee by the series of decisions of Hon'ble Supreme Court in case of Tuticorin Alkali Chemicals & Fertilizers Ltd., Bokara Steel Ltd. as well as Bongaigaon Refinery and Petrochemicals Ltd. In the instant case, the assessee company has invested borrowed funds, available during the period starting disbursement and availability of funds, and actual utilization for the purposes the funds were borrowed, and therefore surplus in the intervening period, in short term interest bearing deposits with the bank. There is nothing on record to suggest that the assessee company was bound to utilize the interest so earned on such short term deposits to adjust against the interest paid on borrowed capital and there were any end-use restrictions and it was therefore free to use the interest income in any manner it liked and therefore interest earned by investing borrowed capital in short term deposit is an independent source of income not in any manner 30 ITA No. 302/JP/2020 M/s Ganpati Global (P) Ltd. vs. ITO connected with construction activities which rightly been brought to tax as income under the head "income from other sources".
Income Tax Appellate Tribunal - Mumbai Cites 34 - Cited by 6 - Full Document

Tuticorin Alkali Chemicals And ... vs Commissioner Of Income Tax, Madras on 8 July, 1997

Therefore, in the case of assessee, the project finance so disbursed in installments depending upon the stage of completion of project, if invested in STDR during the gap between receipt of funds and actual incurrence thereof in the on- going project cannot be termed as being 'surplus and idle' funds and thus the ratio applied in the case of Tuticorin Alkali Chemicals' (supra) is not applicable in the case of the appellant. And the interest earned on such STDR being inextricably related to the setting-up of business are eligible to be netted-off against expenditure incurred during the pre- commencement stage and hence deserve to be capitalized.
Supreme Court of India Cites 23 - Cited by 796 - Full Document

Commissioner Of Income-Tax Bihar-Ii, ... vs Bokaro Steel Limited, Bokaro on 18 December, 1998

in the case of Bokara Steel Ltd. (supra), that company received certain income from the contractor who was assigned the job of constructing the factory. During the course of construction activities carried on by the contractor, the contractor had availed certain facilities and services from the company and paid certain consideration to the company. The nature of the services and consideration/income received by the company from the contractor are noted as below :--
Supreme Court of India Cites 9 - Cited by 372 - S V Manohar - Full Document

Commissioner Of Income-Tax vs Electrochem Orissa Ltd. on 10 November, 1994

In the case of CIT v. Electrochem Orissa Ltd. [1995] 211 ITR 552, the Orissa High Court preferred the view expressed by the High Court of Andhra Pradesh to the view expressed by the Madras High Court in Seshasayee Paper and Boards Ltd.'s case [1985] 156 ITR 542 on the ground that the Madras case was based on a finding of fact that there was no direct connection between the interest paid and the interest received.
Orissa High Court Cites 7 - Cited by 18 - G B Patnaik - Full Document

Bongaigaon Refinary And ... vs Commissioner Of Income-Tax on 24 July, 2001

24. Further, a clear-cut differentiation between treatment of interest income from short term deposits made out of borrowed funds and other categories of income received during the period prior to the 27 ITA No. 302/JP/2020 M/s Ganpati Global (P) Ltd. vs. ITO commencement of business, more so, income received from the contractor undertaking the work of set up of the business of the assessee, has once again been made out by the Hon'ble Supreme Court in its later decision in the case of Bongaigaon Refinery and Petrochemicals Ltd. (supra). In this judgment, the Hon'ble Supreme Court has reiterated the law that excluding interest derived by the assessee during the period prior to the commencement of business, other items of income such as hire charges for it equipment and recoveries from contractors on account of water and electricity charges shall be adjusted against the project cost or the business of oil refinery and petro chemicals.
Supreme Court of India Cites 4 - Cited by 27 - Full Document

Indian Oil Panipal Power Consortium ... vs Income Tax Officer on 26 February, 2009

In view of this judgment of the Madras High Court and the judgment of the Apex Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. (supra), and other judgments of Hon'ble Supreme court, in our opinion, the judgment of the Delhi High Court in the case of Indian Oil Panipat Power Consortium Ltd. (supra) and other case relied on by Ld. Counsel in his arguments may not be applicable to the facts of this case. In view of the above discussion, we do not find any infirmity in the order of the lower authority. Accordingly, the same is confirmed."
Delhi High Court Cites 7 - Cited by 115 - V Sen - Full Document

Commissioner Of Income Tax, West Bengal ... vs Rajendra Prasad Moody, Calcutta Etc on 4 October, 1978

On a reference to the Madras High Court, after referring to the judgment of the Apex Court in CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 and various other judgments of the High Courts, found that the borrowing has not been exclusively and solely for the purpose of earning interest in which case alone it should be taken as income which should be deducted from the interest receipt.
Supreme Court of India Cites 19 - Cited by 413 - P N Bhagwati - Full Document

Challapalli Sugar Ltd vs The Commissioner Of Income Tax, A.P. ... on 31 October, 1974

In the case of Challapalli Sugars Ltd. v. CIT [1975] 98 ITR 167 (SC), this court examined the question whether interest paid before the commencement of production by a company on amounts borrowed 26 ITA No. 302/JP/2020 M/s Ganpati Global (P) Ltd. vs. ITO for the acquisition and installation of plant and machinery would form a part of the actual cost of the asset to the assessee within the meaning of that expression in section 10(5) of the Indian Income Tax Act, 1922 and whether the assessee will be entitled to depreciation allowances and development rebate with reference to such interest also. The court held that the accepted accountancy rule for determining cost of fixed assets is to include all expenditure necessary to bring such assets into existence and to put them in working condition. In case money is borrowed by a newly started company which is in the process of constructing and erecting its plant, the interest incurred before the commencement of production on such borrowed money can be capitalised and added to the cost of the fixed assets created as a result of such expenditure. By the same reasoning if the assessee receives any amounts which are inextricably linked with the process of setting up its plant and machinery, such receipts will go to reduce the cost of its assets. These are receipts of a capital nature and cannot be taxed as income." (Emphasis supplied)
Supreme Court of India Cites 28 - Cited by 416 - H R Khanna - Full Document
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