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Special Purpose Vehicle (SPV)

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This query is : Resolved

CA Milap Mehta (Querist)

30 June 2010 Hi..

One assessee being private limited co. is the SPV(Special Purpose Vehicle) and doing construction of exhibition hall on behalf of state government by using grant..Whole grant is invested in Fixed Deposit with bank..Interest on such FD is also being applied in construction work..

Whether Interest income will be charged to Income-Tax and if yes,under which head?..Also refer any judgement if possible..
Or
can we take a base that Interest income is just application of grant to construction work and it will not be charged to income-tax?..

Thnx in advance..

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

30 June 2010 This is totally based on the Concession agreement with the board or authority which you have been signed, because SPV concession agreement different for each of the project and based on the ownerhip of the Project assets and on what base and conditions the grant has been released we need to analysis then only conclude

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