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Hll Biotech Ltd, Trivandrum vs The Ito, Wd-1(1), Trivandrum on 15 March, 2019 cites

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

7.9 The Ld. relied on the letter issued by the Ministry of Health & Family Welfare cited supra to show that the interest income earned from equity funds is inextricably linked to the setting up of the plant and it is required to be capitalized and set off against the expenditure incurred during the construction 18 I.T.A. Nos. 576 to 578/Coch/2018 & S.P. Nos. 47-49/Coch/2018 of the Project. In our opinion, because the shareholder of the company was in a position to pass resolution or issue any letter, it cannot change the character of the source of the income. As discussed earlier, the business was not set up during the relevant previous year and the interest earned from the Bank deposits is to be assessed as income from other sources and it cannot be set off against the capital expenditure. Since we have relied on the judgment of the Supreme Court in the case of Tuticorin Alkali Chemicals & Fertilisers Ltd. vs. CIT (1997) 227 ITR 172, we are not going to consider the other judgments relied upon by the Ld. AR. Accordingly, this ground of appeal of the assessee is dismissed.
Supreme Court of India Cites 23 - Cited by 796 - Full Document

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

From the above, it is clear that there was already a finding by the first appellate authority that interest earned was inextricably linked with the setting up of the power plant. Whereas in the case before us, there is no such finding and the funds which were required for the construction of the vaccine plant had been placed with Banks and the holding company as short term deposits. 7.7 From the above discussion, it is clear that the decision of the Delhi High Court in the case of Indian Oil Panipat Power Consortium Limited vs. ITO (supra) is not applicable to the facts of the assessee's case before us. Thus, it is clear that in the case before us, assessee was still at the pre-commencement stage and during this phase, the assessee had raised equity funds which was invested in fixed deposits of the Banks as well as the holding company and the assessee had earned interest on the same.
Delhi High Court Cites 7 - Cited by 115 - V Sen - Full Document

The Commissioner Of Income Tax Iv vs Vgr Foundations on 14 June, 2007

6. CIT vs. VGR Foundations (298 ITR 132) (Mad.) 5.5 Further, the Ld. AR submitted that as general policy/guidelines for any funds provided by the Government of India, any income earned out of such funds provided for any specific purpose, it should be utilized only for the purpose for which such funds were given and the recipient is not at liberty to use the interest income as it like. Following these guidelines, assessee had utilized the interest received on funds exclusively provided for vaccine project, for implementing the project and this in a way had helped it to meet the cost overrun of about Rs. 116 crores. The Ld. AR relied on the letter dated 14/06/2018 issued by Ministry of Health & Family Welfare in support of the 9 I.T.A. Nos. 576 to 578/Coch/2018 & S.P. Nos. 47-49/Coch/2018 argument that there is diversion by overriding title which is reproduced as follows:
Madras High Court Cites 7 - Cited by 20 - P P Raja - Full Document

Ntpc Ltd vs Dcit & Others on 10 January, 2013

As directed by the Tribunal, the case was heard again by CIT(Appeals) to decide the issue, after considering the additional evidence. However, it was submitted that the CIT(A) by relying on judgment of the Supreme Court in the case of 7 I.T.A. Nos. 576 to 578/Coch/2018 & S.P. Nos. 47-49/Coch/2018 Sitaldas Tirathdas (41 ITR 367 SC) dismissed the appeal again, on the ground that the guidelines issued by Govt. of India does not result in diversion of income by overriding title. According to the ld. AR, the issue in this case was maintenance payment to wife and children under consent decree and the Apex court held that since for paying such maintenance no charge on the property was created, this was not diversion at source but only application of income to discharge an obligation which decision is not applicable to the facts of the present case, since in the case of the assessee, there is specific direction from the Govt. of India to utilize the interest earned by way of depositing the equity funds for the purpose of the vaccine project only and not for any other purpose. In the case of the assessee, since the interest can be utilized only for the purpose of setting up the vaccine project and it does not have the liberty to utilize the funds for any other purpose, it was diverted before it reached them. Hence this is a clear case of diversion by overriding title. The CIT(Appeals) had also relied on the decision of the ITAT Hyderabad in the case of Thermal Powertech Corporation India Ltd. vs. DCIT in ITA No.1534/Hyd/2016 dated 26/04/2017 in concluding that the interest income is to be assessed under the head ''Income from other sources". According to the Ld. AR, the facts of this case are also not applicable since in that case the assessee had earned interest on deposits made out of borrowed funds and it had the liberty to utilize the same for any purpose. In the case of the assessee, it was submitted that it had temporarily parked the share capital funds infused by the Govt. of India for 8 I.T.A. Nos. 576 to 578/Coch/2018 & S.P. Nos. 47-49/Coch/2018 setting up the vaccine plant, which is not immediately required, in deposits with banks on which it earned interest income.
Delhi High Court Cites 23 - Cited by 89 - B D Ahmed - Full Document
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