Interest on application money

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Dharmesh (Querist)
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07 March 2008 We are engaged in real estate development and for that we have recd some funds (approx. 100 cr) during april to june as application money under FDI investment in real estate. We have allottted debentures to the investor @ 4%. We have deposited the said money in Bank FD pending its utilsation for project. Till date we have acquired only land (more than 50% payment has been made). We have earned almost 75L as FDR interest. My question is whether the said income can be treated as Income From Other Sources or will it reduce my project cost? Pls reply with relevant case study.

Dharmesh

Dharmesh (Querist)
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07 March 2008 URGENT

R.V.RAO

R.V.RAO (Expert)
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07 March 2008 INTEREST PAID IF ANY CAN BE SET OFF AGAINST INTEREST RECEIVED.THIS IS WHEN A UNIT IS RUNNING .

BUT BEFORE START UP OF PRODUCTION , THE ASSESSING OFFICER IS LIKELY TO ASSESS THE INTEREST INCOME UNDER OTHER SOURCES.
R.V.RAO

Dharmesh

Dharmesh (Querist)
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08 March 2008 We have acquired land but construction is not started, so what will be the treatment?

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