DCIT, Shimla V. M/s Beas Valley Power Corporation Limited, Mandi

ITA 1274/CHANDI/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5106 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 02-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGHDR
• Keywords: Capital receipt
• Section: 143(3); 260A; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 1274 TO 1277/CHD/2016 A.YS.: 2007-08,2008-09, 2012-13 & 2013-14 THE DCIT, VS. M/S BEAS VALLEY CORPORATION LTD., CIRCLE SHIMLA. JOGINDER NAGAR, DISTT.MANDI. PAN-AABH4161P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH,DR RESPONDENT BY : SHRI VISHAL MOHAN DATE OF HEARING : 27.03.2017 DATE OF PRONOUNCEMENT : 08.06.2017 ORDER PER MS. DIVA SINGH,JM BY THESE FOUR APPEALS, THE REVENUE ASSAILS THE CORRECTNE SS OF THE CONSOLIDATED ORDER DATED 30.09.2016 OF LD. CIT(A) SHIMLA PERTA INING TO 2007-08, 2008-09, 2012-13 AND 2013-14 ASSESSMENT YEAR S. IT WAS THE COMMON STAND OF THE PARTIES BEFORE THE BENCH THAT SINCE IDENTICAL ISSUES ARE AGITATED IN EACH OF THESE APPEALS ON IDENTICAL SET OF FACTS AND CIRCUMSTANCES, THE ARGUMENTS ADVANCED IN ITA NO. 1274/C HD/2016 WOULD ADDRESS ALL THESE APPEALS. ACCORDINGLY, GROUNDS FROM THE AFORESAID APPEAL IN 2007-0-8 ASSESSMENT YEAR ARE BEING REPRODUCED HEREUNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES, THE LD. C IT(A) HAS ERRED IN HOLDING THAT INTEREST INCOME EARNED BY THE ASSESSEE COULD NOT BE TREATED AS ' INCOME FORM OTHER SOURCES' AND IS NOT LIABLE TO BE TAXED, IGNOR ING THE FACT THAT THE COMPANY IS YET IN PRE-OPERATIVE STAGE AND HAS NOT COMMENCED BUSINE SS OPERATIONS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES, THE LD. CIT( A) IS NOT JUSTIFIED IN HOLDING THAT INCOME EARNED IN THE PERIOD PRIOR TO C OMMENCEMENT OF THE BUSINESS IS A CAPITAL RECEIPT AND WAS REQUIRED TO B E SET OFF AGAINST PRE- OPERATIVE EXPENSES. 2. THE LD. AR SUBMITTED THAT THOUGH THESE ARE DEPARTME NTAL APPEALS, HOWEVER, THE POINT AT ISSUE IS FULLY COVERED IN ASSESSEE'S FAVOUR BY VIRTUE OF ORDER DATED 31.12.2014 IN ITA NO. 85/CHD/2012 IN THE CAS E OF THE ASSESSEE PERTAINING TO 2009-10 ASSESSMENT YEAR. COPY O F THE AFORESAID ORDER AVAILABLE ON RECORD WAS RELIED UPON. THE LD. SR.DR TH OUGH RELIED UPON THE ASSESSMENT ORDER, HOWEVER, THE FACTUAL POSITION AS CLAIMED BY THE LD. AR WAS NOT DISPUTED. 2 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE AO IN 2007-08 AND 2008-09 ASSESSMENT YEARS HAS PASSED HIS SEPARATE ORDERS DATE D 30.06.2014 U/S 143(3)/147. IN 2012-13 AND 2013-14 ASSESSMENT YEARS, T HE RESPECTIVE ORDERS OF THE AO ARE DATED 30.09.2014 AND 23.12.2015 PAS SED U/S 143(3) OF THE ACT. RELIANCE BEFORE THE ITAT HAS BEEN PLACED ON THE ORDER PA SSED BY THE COORDINATE BENCH DATED 31.12.2014 IN ITA 857/2012 P ERTAINING TO 2009-10 ASSESSMENT YEAR. ACCORDINGLY, AS FAR AS 2007-0 8 AND 2008-09 ASSESSMENT YEARS ARE CONCERNED, WE FIND THAT THE ISSUES AND FACTS ARE THE SAME AND THE AO IN THE ORDER PASSED U/S 147 HAVING BE EN PASSED PRIOR TO THE ORDER OF THE ITAT, ADMITTEDLY DID NOT HAVE THE BENE FIT OF THE SAID ORDER, WHICH ORDER, IT IS SEEN HAS BEEN NOTICED BY THE FIRST APP ELLATE AUTHORITY IN BOTH THE YEARS. 4. THE SIMILARITY OF FACTS IN THE TWO APPEALS PERTAINING TO 2012-13 AND 2013-14, IT IS NOTED HAS BEEN NOTICED BY THE AO HIMSELF IN PARA 12 OF HIS ORDER DATED 23.12.2015 AND NECESSARY RELIEF WAS DENIED TO THE ASSESSEE ON THE GROUNDS THAT THE ISSUE IS BEING KEPT ALIVE AS THE MA TTER WAS SUBJUDICE BEFORE THE HON'BLE HIGH COURT OF HIMACHAL PRADESH. FOR RE ADY REFERENCE, SAID PARA IS EXTRACTED HEREUNDER : 12. I HAVE ALSO CONSIDERED THE SUBMISSIONS OF THE ASSES SEE AND PERUSED THE COPY OF ITAT'S ORDER PASSED IN THEIR CASE FOR THE ASSESS MENT YEAR 2009-10 IN ITA NO.857/CHD/2012 DT. 31/12/2014. IT IS WORTHWHILE TO MENTION HERE TH AT THE SAID ORDER OF THE HON'BLE ITAT, CHANDIGARH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND AN APPEAL U/S 260A HAS BEEN PREFERRED BEFORE THE HON'BLE HIGH COURT OF HIMACHAL PRADESH. THUS, THE ISSUE IS STILL SUB- JUDICE. IN VIEW OF THE THESE FACTS, I AM OF THE CON SIDERED OPINION THAT THE INTEREST INCOME EARNED BY THE ASSESSEE BY INVESTMENT OF BORROWED AND SURPLUS FUNDS AMOUNTING TO RS. 38,40,1927- IS ASSESSABLE IN ITS HANDS IN THE ASSES SMENT YEAR 2013-14 UNDER THE HEAD INCOME FROM OTHER SOURCES. 5. THUS WE FIND THAT THE SUBMISSIONS OF THE PARTI ES THAT ON FACTS AND LAW, THE ISSUE AS CONSIDERED BY THE CO-ORDINATE BENCH I N ITS ORDER DATED 31.12.2014 IS THE SAME, IS FOUND TO BE CORRECT. FOR THE S AKE OF COMPLETENESS, THE FACTS IN THE YEAR UNDER CONSIDERATION ARE THAT THE ASSESSEE I.E. BEAS VALLEY POWER IS A GOVERNMENT COMPANY PROMOTED BY HPSEB L TO EXECUTE THE 100 MW UHL STAGE -III IN JOGINDER NAGAR DISTT. MAND I. THE COMPANY WAS INCORPORATED ON 25/03/2003. HOWEVER THE ACTIVITIES O F THE COMPANY COULD COMMENCE ONLY FROM JANUARY, 2004 WHEN THE MANAGIN G DIRECTOR AND COMPANY SECRETARY WERE APPOINTED. SINCE THE COMPANY HAD N OT STARTED 3 COMMERCIAL OPERATIONS, PROFIT AND LOSS ACCOUNT WERE NOT P REPARED AND INSTEAD A STATEMENT SHOWING INCIDENTAL EXPENDITURE DURING CONSTRUCTION (PENDING ALLOCATION) WAS BEING PREPARED. COMPANY WAS ACCOR DINGLY UNDER CONSTRUCTION TILL 31.03.2013 RELEVANT TO ALL THE ASSESSMENT YEARS UNDER CONSIDERATION. HENCE NO COMMERCIAL PRODUCTION/ACTIVITY HAD BEEN UNDERTAKEN IN ANY OF THE ASSESSMENT YEARS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CONCLUDED AFTER HEARING THE ASSESSEE THAT INTEREST EARNED ON BANK DEPOSITS IS A TAXABLE INCOME AND SHOULD HAVE BE SHOWN UNDER THE HEAD ' INCOME FROM OTHER SOURCES' . THE ARGUMENTS ON BEHALF OF THE ASSESSEE THAT IT WAS AT CONSTRUCTION STAGE AND THERE WAS NO SOURCE OF INCOME IN VIEW OF WHICH THE AMOUNT WAS K EPT IN SHORT TERM DEPOSITS IN THE BANK WAS NOT ACCEPTED. SIMILARLY TH E ARGUMENT THAT THE INTEREST SO RECEIVED ON SHORT TERM DEPOSIT DURING T HE YEAR ON THE LOAN RECEIVED WAS SET OFF AGAINST THE INTEREST PAYABLE ON PF C LOAN SO AS TO REDUCE THE COST OF PROJECT; AND THE AMOUNTS WERE SO DEPOSITED SO AS TO BE READILY AVAILABLE TO MEET OUT THE URGENT REQUIREMENTS OF FUNDS FOR WORKS; USED SOLELY AND EXCLUSIVELY FOR THE BUSINESS NEEDS OF THE ASSESSEE INCORPORATED TO SET UP THE UHL, STAGE-ILL POWER PROJEC T; AND THE ARGUMENT THAT EARNING OF INTEREST ON SHORT TERM DEPOSITS WAS SE T OFF AGAINST THE INTEREST PAID ON PFC LOAN AND THEY HAD A DIRECT NEXUS A ND IS INEXTRICABLY LINKED WITH COMMISSIONING OF THE PROJECT WERE ALL R EJECTED BY THE AO RELYING UPON THE DECISION OF THE APEX COURT IN TUTICORIN AL KALI CHEMICALS & FERTILIZERS HOLDING THAT INTEREST EARNED ON BANK DEP OSITS DURING THE PRE- CONSTRUCTION PERIOD WAS ASSESSEE'S INCOME FROM OTHER SOURCE S. 5.1 THE DISTINCTION SOUGHT TO BE MADE BY THE ASSESSEE WITH THE DECISION OF THE APEX COURT IN THE CASE OF TUTICORIN ALKALI CHEMICALS & F ERTILIZERS V CIT, 227 ITR 172 (S.C) RELIED UPON BY THE AO WAS NOT ACCEPTED BY HIM. RELIANC E PLACED ON THE CASE OF CIT VS BOKARO STEEL LTD. (1999) 236 ITR 315 (SC) AND CIT VS KARNAL COOPERATIVE SUGAR MILLS LTD. (2000) 243 ITR 2 (SC) THOUGH CONSIDERED, HOWEVER, IT WAS CONCLUDED THAT THE VIEW TAKEN BY THE APEX COURT IN THE CASE OF TUTICORIN ALKALI CHEMICALS & FERTILIZERS V CIT (SUPRA) WAS AGAIN REITERATED THEREIN. SIMILARLY, CIT VS KARNATAK A POWER CORPORATION (2001) 247 ITR 268 (SC) AND BONGAINGAON REFINE RY AND PETROCHEMICALS LTD. VS CIT (2001) 251 ITR 329 (SC) AND TH E DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF INDIAN OIL PANIPAT C ONSORTIUM LTD. VS ITO (2009) 315 ITR 255 (DEL) WAS HELD BY THE AO TO BE DISTINGUISHABLE ON FACTS. ACCORDINGLY, IT WAS CONCLUDED BY THE AO THAT E ACH CASE TURNS ON 4 ITS OWN PECULIAR FACTS AND NATURE. THE CONCLUSION ACCORDIN G TO THE AO WAS FURTHER FORTIFIED BY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF INTERNATIONAL MARKETING LTD. VS ITO (2007) 292 ITR 504 (D EL). THUS, IT WAS CONSIDERED THAT THE JUDICIAL OPINION IS THAT INTEREST EARNE D ON PRE OPERATIVE STAGE OF THE BUSINESS IS TAXABLE IN THE HANDS OF THE ASSESSEE. 6. BEFORE THE FIRST APPELLATE AUTHORITY, IT IS NOTED THAT RELIANCE HAS BEEN PLACED UPON TWO DECISIONS OF THE COORDINATE BENCHES NAME LY ITA 857/CHD/2012 A.Y. 2009-10 DATED 31.12.2014 AND ITA 113 2/CHD/2014 A.Y. 2011-12 DATED 23.09.2015. THE CO-ORDINATE BENCH IN IT S ORDER DATED 23.09.2015 HAS CONSIDERED THE ISSUE IN THE FOLLOWING MANNER : 5. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE P ARTIES. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAV OUR OF THE ASSESSEE BY ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF THE SAME ASSESSEE F OR PRECEDING ASSESSMENT YEAR 2009- 10 IN ITA 857/2012 IN WHICH THE TRIBUNAL ON IDENTIC AL ISSUE, DECIDED THE SAME IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 31.12.2014. THE FIN DINGS OF THE TRIBUNAL IN PARA 11 TO 14 ARE REPRODUCED AS UNDER : 11. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH T HE PARTIES AND PERUSED THE FINDINGS OF AUTHORITIES BELOW. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMI TTED THAT THERE WERE NO SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE SO THE DE CISION IN THE CASE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. VS. CIT (SUPRA) RELIED UPON BY ASSESSING OFFICER IS NOT APPLICABLE TO THE FACTS OF THE CASE. HE HAS SUBMITTED THAT FUNDS WERE KEPT IN SHORT TERM DEPOSIT FOR THE PURPOSE OF COMPLETION OF THE PROJECT AND NOT TO EARN ANY INTEREST. HE HAS SUBMI TTED THAT EVEN THE INTEREST SO RECEIVED WAS UTILIZED FOR CONSTRUCTION OF THE PR OJECT AND FOR PAYING INTEREST ON LOANS TAKEN FROM POWER FINANCE COMPANY. HE HAS REFERRED TO ANNUAL REPORT OF THE ASSESSEE (PB-15) T6O SHOW THAT THERE WERE NO SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE AND THE INTEREST PAID O N THE LOAN ENDING 31.03.2009 WAS RS. 3652.44 LACS AND THE INTEREST RE CEIVED FROM THE BANK WAS RS. 625.95 LACS. HE HAS, THEREFORE, SUBMITTED THAT THE ASSESSEE RECEIVED LESSER INTEREST AS AGAINST MORE INTEREST PAID TO THE FINAN CIAL INSTITUTION. THEREFORE, THERE WAS NO INTENTION ON THE PART OF THE ASSESSEE TO EARN ANY INTEREST ON SHORT TERM DEPOSITS. 12.ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 12(I) ON CONSIDERATION OF THE ABOVE FACTS AND MATER IAL ON RECORD, WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE FINDINGS OF T HE AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT ASSESSEE CORPORATION IS A GOVERNMENT C OMPANY PROMOTED BY H.P. STATE ELECTRICITY BOARD LTD. THE ASSESSEE HAS ADMIT TEDLY NOT STARTED COMMERCIAL OPERATION IN THE YEAR UNDER CONSIDERATION AND WAS S TILL IN THE PRE-OPERATIVE STAGE. THE ASSESSEE CLAIMED THAT IT HAS NO SURPLUS FUNDS BUT THE FINDING OF THE AUTHORITIES BELOW WAS THAT ASSESSEE EARNED INTEREST ON SURPLUS FUNDS. THE ACCOUNTS OF THE ASSESSEE PLACED ON RECORD CLEARLY S UPPORT THE SUBMISSION OF THE ASSESSEE THAT THERE WERE NO SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE. THE ASSESSEE ALSO CLAIMED THAT ITS FUNDS WERE TEMPORARI LY EMPLOYED FOR SHORT TERM DEPOSITS FOR EFFICIENTLY AND EFFECTIVELY USE OF ITS FUNDS SO AS TO REDUCE THE TOTAL COST OF THE PROJECT. THE LD. CIT(APPEALS) ALSO PAR TLY AGREED WITH THE SUBMISSION OF THE ASSESSEE THAT PART FUNDS WERE INVESTED FOR S ETTING UP OF THE PLANT & MACHINERY. THE ASSESSEE'S COUNSEL HAS REFERRED TO THE ACCOUNTS OF THE ASSESSEE AT PAGE 15 OF THE PAPER BOOK TO SHOW THAT ASSESSEE RECEIVED LESSER INTEREST OF RS. 625.97 LACS AND PAID INTEREST ON LOAN AT RS. 36 52.44 LACS IN THE YEAR UNDER CONSIDERATION WOULD SHOW THAT ASSESSEE HAS TO PAY M ORE INTEREST AS AGAINST THE SMALL INTEREST RECEIVED BY ASSESSEE. THEREFORE, IF ANY ADJUSTMENT IS MADE 5 AGAINST INTEREST PAID, STILL THERE IS A LIABILITY O F THE ASSESSEE TO PAY INTEREST ON THE LOANS. THE ASSESSEE ALSO EXPLAINED THAT FOR EFFECT IVE FUNDS MANAGEMENT, THE TEMPORARY SURPLUS FUNDS WERE KEPT IN SHORT TERM BAN K DEPOSITS AND THEREAFTER, INTEREST WAS EARNED AND SO WAS ALSO USED FOR CONST RUCTION OF THE PROJECT AND FOR PAYING INTEREST TO THE POWER FINANCE COMPANY WHICH HAVE NOT BEEN ADVERSELY COMMENTED UPON BY THE AUTHORITIES BELOW. THEREFORE , THE RELIANCE OF THE ASSESSING OFFICER ON THE DECISION IN THE CASE OF TU TICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. VS. CIT (SUPRA) WAS TOTALLY MISPLA CED. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS BOKARO STEEL LTD. HELD AS UNDER : HELD, DISMISSING THE APPEAL, THAT THE FIRST THREE H EADS OF INCOME WERE (I) THE RENT CHARGED BY THE ASSESSEE TO ITS CO NTRACTORS FOR HOUSING WORKERS AND STAFF EMPLOYED BY THE CONTRACTO R FOR THE CONSTRUCTION WORK OF THE ASSESSEE INCLUDING CERTAIN AMENITIES GRANTED TO THE STAFF BY THE ASSESSEE, (II) HIRE CHA RGES FOR PLANT AND MACHINERY WHICH WAS GIVEN TO THE CONTRACTORS BY THE ASSESSEE FOR USE IN THE CONSTRUCTION WORK OF THE ASSESSEE, AND ( II) INTEREST FROM ADVANCES MADE TO THE CONTRACTORS BY THE ASSESSEE FO R THE PURPOSE OF FACILITATING THE WORK OF CONSTRUCTION. THE ACTIVITI ES OF THE ASSESSEE IN CONNECTION WITH ALL THESE THREE RECEIPTS WERE DI RECTLY CONNECTED WITH OR INCIDENTAL TO THE WORK OF CONSTRUCTION OF I TS PLANT UNDERTAKEN BY THE ASSESSEE. THE ADVANCES WHICH THE ASSESSEE MADE TO THE CONTRACTORS TO FACILITATE THE CONSTRUCTION A CTIVITY OF PUTTING TOGETHER A VERY LARGE PROJECT WAS AS MUCH TO ENSURE THAT THE WORK OF THE CONTRACTORS PROCEEDED WITHOUT ANY FINANCIAL HITCH AS TO HELP THE CONTRACTORS. THE ARRANGEMENTS WHICH WERE MADE B ETWEEN THE ASSESSEE-COMPANY AND THE CONTRACTORS PERTAINING TO THESE THREE RECEIPTS WERE ARRANGEMENTS WHICH WERE INTRINSICALLY CONNECTED WITH THE CONSTRUCTION OF ITS STEEL PLANT. THE RECEI PTS HAD BEEN ADJUSTED AGAINST THE CHARGES PAYABLE TO THE CONTRAC TORS AND HAD GONE TO REDUCE THE COST OF CONSTRUCTION. THEY HAD, THEREFORE, BEEN RIGHTLY HELD AS CAPITAL RECEIPTS AND NOT INCOME OF THE ASSESSEE ANY INDEPENDENT SOURCE. 12(II) THE HON'BLE DELHI HIGH COURT IN THE CASE OF INDIAN OIL PANIPAT POWER CONSORTIUM LTD. V ITO 315 ITR 255 (DELHI) HELD AS U NDER : THE ASSESSEE-COMPANY WAS INCORPORATED IN PURSUANCE OF A JOINT VENTURE ENTERED INTO BETWEEN INDIAN OIL CORPORATION AND M OF JAPAN TO SET UP A POWER PROJECT. IN ORDER TO EFFECT UATE THE PURPOSE FOR WHICH THE JOINT VENTURE WAS CONCEIVED, SHARE CA PITAL WAS CONTRIBUTED BY THESE TWO CORPORATIONS WHICH INCLUDE D RS. 20 CRORES BY WAY OF ADDITIONAL SHARE CAPITAL. THE ASSESSING O FFICER TREATED THE INTEREST EARNED ON MONIES RECEIVED AS SHARE CAP ITAL BY THE ASSESSEE TEMPORARILY PLACED IN A FIXED DEPOSIT AWAI TING ACQUISITION OF LAND WHICH HAD RUN INTO LEGAL ENTANGLEMENTS ON A CCOUNT OF TITLE AS 'INCOME FROM OTHER SOURCES'. THE COMMISSIONER (A PPEALS) ACCEPTED THE STAND OF THE ASSES- SEE THAT THE INTER EST WAS IN THE NATURE OF A CAPITAL RECEIPT WHICH WAS LIABLE TO BE SET OFF AGAINST PRE-OPERATIVE EXPENSES. THE TRIBUNAL REVERSED THIS ORDER. ON APPEAL : HELD, ALLOWING THE APPEALS, THAT THE FUNDS IN THE F ORM OF SHARE CAPITAL WERE INFUSED FOR THE SPECIFIC PURPOSE OF AC QUIRING LAND AND THE DEVELOPMENT OF INFRASTRUCTURE. THEREFORE THE IN TEREST EARNED ON FUNDS PRIMARILY BROUGHT FOR IN THE BUSINESS COULD N OT BE CLASSIFIED AS 'INCOME FROM OTHER SOURCES. SINCE THE INCOME W AS EARNED IN A PERIOD PRIOR TO COMMENCEMENT OF BUSINESS IT WAS IN THE NATURE OF A CAPITAL RECEIPT AND WAS REQUIRED TO BE SET OFF AGAI NST PRE-OPERATIVE EXPENSES. 13. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DECISIONS, IT IS CLEAR THAT THE FUNDS WITH THE ASSESSEE, EVEN IF TEM PORARILY USED FOR SAVINGS/SHORT TERM DEPOSITS, BUT THE EARNING OF THE INTEREST WERE DIRECTLY CONNECTED WITH WORK OF CONSTRUCTION OF THE PROJECT EMPLOYED BY THE ASSE SSEE. THEREFORE, THE EARNING OF INTEREST COULD NOT BE TREATED AS INCOME FROM OTH ER SOURCES, SINCE THE INCOME 6 WAS EARNED IN THE PERIOD PRIOR TO COMMENCEMENT OF T HE BUSINESS AND IT WAS THE NATURE OF CAPITAL RECEIPT AND WAS REQUIRED TO BE SE T OFF AGAINST PRE-OPERATIVE EXPENSES. WE, THEREFORE, SET ASIDE THE ORDERS OF A UTHORITIES BELOW AND DELETE THE ADDITION OF RS. 83,06,897/-. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 6. THE LD. DR, ON GOING THROUGH THE SAME ORDER OF T HE TRIBUNAL IN THE CASE OF THE ASSESSEE ALSO STATED THAT IDENTICAL ISSUE HAS ALREA DY BEEN DECIDED IN FAVOUR OF THE ASSESSEE. 7. CONSIDERING THE ABOVE FACTS, WE FIND THAT ISSUE IS SAME AS HAVE BEEN DECIDED EARLIER IN THE CASE OF THE ASSESSEE IN ASSESSMENT Y EAR 2009-10 (SUPRA). FURTHER, THE ASSESSEE HAS FILED CERTIFICATE THAT IN ASSESSMENT Y EAR 2010-11, THE RETURN HAS BEEN PROCESSED UNDER SECTION 143(1) OF THE ACT BECAUSE T HE CASE WAS NOT SELECTED FOR SCRUTINY ASSESSMENT. THE ISSUE IS, THEREFORE, COVERED IN FA VOUR OF THE ASSESSEE BY EARLIER ORDER OF THE TRIBUNAL DATED 31.12.2014 IN THE CASE OF THE SA ME ASSESSEE. BY FOLLOWING THE SAME REASONS FOR DECISION, WE SET ASIDE THE ORDERS OF AU THORITIES BELOW AND DELETE THE ADDITION OF RS. 40,58,998/-. 7. ACCORDINGLY, IN THE AFOREMENTIONED PECULIAR FACTS AND CIR CUMSTANCES, THERE BEING NO DEBATE THAT FACTS AND CIRCUMSTANCES AND POSITION OF LAW REMAIN THE SAME, THE VIEW THAT THE APPEALS OF THE DEPARTMENT ON A PAR ITY OF FACTS, CIRCUMSTANCES AND POSITION OF LAW HAVE TO BE DISMISS ED. RESPECTFULLY FOLLOWING THE PRECEDENT RELIED UPON, THE APPEALS ARE DISMISSE D. SAID ORDER WAS PRONOUNCED ON THE DATE OF HEARING ITSELF. 8. IN THE RESULT, THE APPEALS OF THE DEPARTMENT ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JUNE,2017. SD/- SD/- (ANNAPURNA GUPTA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMB ER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.