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TAXAP/106/2009 2/ 2 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 106 of 2009
=========================================================
COMMISSIONER
OF INCOME TAX-II - Appellant(s)
Versus
GUJARAT
POWERGEN ENERGY CORPORATION LTD - Opponent(s)
=========================================================
Appearance
:
MRS
MAUNA M BHATT for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE K.A.PUJ
and
HONOURABLE
MR.JUSTICE RAJESH H.SHUKLA
Date
: 15/02/2010
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE K.A.PUJ)
1. The
Commissioner of Income Tax-II, Ahmedabad has filed the Tax Appeal
under Section 260A of the Income Tax Act, 1961 for assessment year
1997-1998 proposing to formulate the following substantial questions
of law for determination and consideration of this Court.
Whether
the Appellate Tribunal is right in law and on facts in confirming the
order passed by the CIT(A) deleting the addition of Rs.20,94,194/-
being interest on deposit for obtaining bank guarantee. ?
2. Heard
Mrs. Mauna M. Bhatt, Standing Counsel appearing for the revenue and
perused the orders passed by the authority below. The question was
considered by the CIT (Appeal) as well as the Tribunal in light of
the decision of the Apex Court in the case of Commissioner of
Income Tax v/s. Karnal Co-Operative Sugar Mills Ltd. reported in
(2000) 243 ITR 2,
wherein
it is held that any income on deposit is incidental to the
acquisition of assets for the setting up of the plant and machinery.
As such interest is held to be a capital receipt, which would go to
reduce the cost of asset. Both the Appellate Authorities have found
on facts that the interest received from bank on margin money has
direct nexus with project and hence it is a capital receipt. It is
not taken as income from other sources. Since the issue is concluded
by the decision of the Apex Court, we are of the view that no
substantial question of law arises out of the order of the Tribunal.
We, therefore, dismiss this Tax Appeal.
(K.A. Puj,J.) (Rajesh H. Shukla,J.)
rakesh/
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