Pr. Commissioner Of Income Tax-7 v. M/S Triumph Realty Pvt. Ltd

$~204 *IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 177/2022 PR. COMMISSIONER OF INCOME TAX-7..... Appellant Through:Mr. Puneet Rai and Ms. AdeebaMujahid and Mr. Karan Pandey,Advocates. versus M/S TRIUMPH REALTY PVT. LTD...... Respondent Through:Ms. Kavita Jha, Advocate. %Date of Decision: 1[st]June, 2022 CORAM: HON'BLE MR. JUSTICE MANMOHANHON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA MANMOHAN, J (Oral): J U D G M E N T 1.Present Income Tax Appeal has been filed challenging the Orderdated 27[th]August, 2020 passed by the Income Tax Appellate Tribunal(‘ITAT’) in ITA No. 2948/Del/2018 for the Assessment Year 2013-14. 2.Learned counsel for the Appellant submits that the ITAT has erred inallowing the capitalisation of interest on FDRs earned during the period ofconstruction without appreciating the fact that while utilizing the ECB fundsthe assessee did not follow the RBI guidelines. He also submits that theITAT has failed to consider the various decisions of the Apex Court ITA 177/2022 including Tuticorin Alkali Chemicals and Fertilizers Limited vs CIT,(1997) 227 ITR 172 (SC). 3.This Court vide its order in ITA 70/2022 dated 31[st]March, 2022dismissed a similar appeal preferred by the Revenue against the ITAT orderpassed in assessee’s own case for the earlier Assessment Year 2012-13. ThisCourt in ITA 70/2022 held that “ ......The judgmentpassed in TuticorinAlkali Chemicals (supra) referred to and relied upon by learned standingcounsel for the Appellant has been considered and explained subsequentlyby the Apex Court in Commissioner of Income Tax, Bihar II, Patna vs.Bokaro Steel Ltd., Bokaro, (1999) 1 SCC 645, wherein it has been held“.....if the assessee receives any amounts which are inextricably linked withthe process of setting up its plant and machinery, such receipts will go toreduce the cost of its assets.These are receipts of a capital nature andcannot be taxed as income. Subsequently, a Division Bench of this Court inIndian Oil Panipat Power Consortium Limited, New Delhi vs. Income TaxOfficer, (2009) 315 ITR 255 (Delhi) has held “.......In view of the discussionabove, in our opinion the Tribunal misdirected itself in applying the decisionof the Supreme Court in Tuticorin Alkali Chemicals (supra) in the facts ofthe present case. In our opinion on account of the finding of fact returned bythe CIT(A) that the funds infused in the assessee by the joint venture partnerwere inextricably linked with the setting up of the plant, the interest earnedby the assessee could not be treated as income from other sources. In theresult we answer the question as framed in favour of the assessee andagainst the Revenue.......”. The aforesaid principle has also been reiteratedby this Court in Principal Commissioner of Income Tax vs. Facor PowerLtd., (2016) 380 ITR 474 (Delhi).” ITA 177/2022 Page 2 of 3 4.Keeping in view the aforesaid, this Court is of the opinion that nosubstantial question of law arises for consideration as the questions sought tobe raised in the present appeal are squarely covered by the decisions of theApex Court as well as this Court. Accordingly, the present appeal isdismissed. MANMOHAN, J JUNE 1, 2022AS MANMEET PRITAM SINGH ARORA, J ITA 177/2022