Interest recd on F.D when production not start.

Save Share

This query is : Resolved

Vijay (Querist)

28 December 2008

Dear Sir,

My company incorporated in 2005 and start production in 2006 . During thid period whichever expences made , that's capitalised . and that time we had F.D with Bank , on which we received interest . This interest we shown to " Pre - operative Exps ( interest ) under current asset. it's wrong or right . can I get any Case law against said transaction ?

Please help

Vijay

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

28 December 2008 It is wrong based on the following decisions:-
1) Tuticorin Alkaali Chemical and fertilizersltd Vs.CIT (1997)227 ITR 172(SC).
2) Vijaya Laxmi
sugar Mills ltd Vs CIT (1991) 191 ITR 641(SC).
Accordingly, the interest should be offered for taxation under the head income From Other Sources.

C A GROUP COACHING

C A GROUP COACHING (Expert)

28 December 2008 INCOME TO BE DECLARED & OFFERED AS INCOME FROM OTHER SOURCES
CASE LAWS AS GIVEN BY LEARNED SENIOR CA CHAKRAPANI ARE THERE FOR YOUR REFERENCE

CHANDRAKANT AMBANI
BOMBAY
9819408963
9821240674

Vijay

Vijay (Querist)

29 December 2008 Thanks a lot.

Vijay

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now