M/s H.P.. Power Transmission Corporation Ltd., Shimla V. DCIT, Cricle, Shimla

ITA 789/CHANDI/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2592 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-06-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 20-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C CHANDRAKANTA CIT DR
• Keywords: Capital receipt; Set aside
• Section: 113; 13

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A, CHANDIGARH BEFORE: SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI R.L. NEGI, JUDICIAL MEMBER . / ITA NO.789/CHD/2019 / ASSESSMENT YEAR : 2014-15 M/S H.P.POWER TRANSMISSION CORPORATION LIMITED, BAROWALIA HOUSE, KHALINI, SHIMLA. THE D.C.I.T. , KASUMPTI, SHIMLA ./ PAN NO: AACCM1548M /APPELLANT /RESPONDENT & . / ITA NO.790/CHD/2019 / ASSESSMENT YEAR : 2015-16 M/S H.P.POWER TRANSMISSION CORPORATION LIMITED, BAROWALIA HOUSE, KHALINI, SHIMLA. THE A.C.I.T. , KASUMPTI, SHIMLA ./ PAN NO: AACCM1548M /APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI VISHAL MOHAN, ADV., # ! / REVENUE BY : SMT.C.CHANDRAKANTA, CIT DR ! & /DATE OF HEARING : 09.06.2021 ! & /DATE OF PRONOUNCEMENT: .06. 2021 (HEARING THROUGH WEBEX) /ORDER ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 2 OF 21 PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER : THE ABOVE TWO APPEALS HAVE BEEN PREFERRED BY THE SA ME ASSESSEE AGAINST THE CONSOLIDATED ORDER OF THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS ) [IN SHORT THE LD.CIT(A)] , SHIMLA DATED 28.03.2019 RELATING TO ASSESSMENT YEARS 2014 -15 AND 2015-16 RESPECTIVELY, PASSED U/S 250(6)) OF TH E INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) 2. A DELAY OF 175 DAYS WAS MARKED BY REGISTRY IN TH E FILING OF BOTH THE APPEALS. AN APPLICATION SEEKING CONDONA TION OF THE DELAY WAS FILED STATING THEREIN THAT THE APPEAL HAD BEEN FILED WITHIN TIME, HOWEVER, THE APPEAL FEES HAD BEEN DEPO SITED UNDER THE WRONG HEAD AND DESPITE THE BEST EFFORTS O F THE APPLICANT THE HEAD COULD NOT BE GOT CHANGED AND TO CURE THE DEFECT, THEREFORE, FEES WERE DEPOSITED AGAIN ON A L ATER DATE RESULTING IN A DELAY, THEREFORE, OF 175 DAYS IN THE FILING OF THE APPEAL. THE CONTENTS OF THE APPLICATION FILED BY T HE ASSESSEE ARE AS UNDER: 1. THE PRESENT APPEAL HAD BEEN PREFERRED AGAINST T HE ORDERS PASSED BY THE LD COMMISSIONER OF INCOME TAX ( APPEA LS) DATED 28.03.2019 COPY OF WHICH WAS RECEIVED ON 05.04.2019 AND THE LAST DATE OF [IMITATION FOR FILI NG OF THE APPEAL EXPIRED ON 04. 06.2019. . 2. THAT THE SAID APPEAL WAS FILED WITH THE REGISTRY OF THE TRIBUNAL ON 20/05/2019 HOWEVER THE APPEAL FEES HAD BEEN DEPOSITED UNDER THE HEAD TAX-ON REGULAR ASSESSMENT WHEREAS THE SAME SHOULD HAVE BEEN UNDER THE HEAD TA X ON ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 3 OF 21 SELF ASSESSMENT .THAT THE APPLICANT TRIED ITS LEVEL BEST TO GEL THE HEAD OF THE CHALLAN CHANGED BUT THE SAME COULD NOT BE DONE AND TO CURE THE DEFECT THE APPLICANT AGAIN DEP OSITED THE FEES AGAIN ON 25/1 1/2019 AND THE SAME HAD LEAD TO A DELAY OF 1 75 DAYS IN FILING OF THE APPEAL. 3. THE DELAY IN FILING OF THE APPEAL WAS NEITHER WI LLFUL NOR INTENTIONAL BUT HAD OCCASIONED DUE TO THE REASONS AFOREMENTIONED. IT IS, THEREFORE, MOST RESPECTFULLY PRAYED THAT TH E DELAY IN FILING OF THE APPEAL MAY KINDLY BE CONDONED AND THE APPEAL BE ORDERED TO BE HEARD ON MERITS. 3. ON PERUSAL OF THE RECORDS BEFORE US, THE FACTS A S STATED BY THE ASSESSEE IN ITS CONDONATION APPLICATION WERE VERIFIED AND WERE FOUND TO BE CORRECT. IT WAS NOTED THAT THE ORIGINAL APPEAL HAD BEEN FILED ON 20.05.2019 WHEN THE LIMITA TION FOR FILING THE APPEAL WAS TO EXPIRE ON 04.06.2019. THA T A DEFECT NOTICE IN THE SAID APPEAL WAS ISSUED TO THE ASSESSE E ON 14.11.2019 POINTING OUT THE FACT THAT THE APPEAL FE E HAD BEEN DEPOSITED IN THE WRONG HEAD AND THE SAID RECTIFICAT ION WAS DONE BY DEPOSITING FEES AGAIN ON 25.11.2019 AND THE APPEAL WAS TREATED, THEREAFTER, AS FILED ON THIS DATE MARK ING A DELAY OF 175 DAYS IN THE FILING OF THE SAME. 4. THE LD. DR ON BEING CONVINCED WITH THE FACTS MAD E NO OBJECTION TO THE CONDONATION OF THE DELAY. 5. CONSIDERING THE ABOVE, IN OUR VIEW THERE WAS NO DELAY IN THE FILING OF APPEAL AT ALL SINCE THE SUBSEQUENT DE POSIT OF FEES IN THE CORRECT HEAD WAS ONLY TO THE EFFECT OF RECTI FYING THE ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 4 OF 21 DEFECT OF THE FEES HAVING BEEN DEPOSITED IN THE WR ONG HEAD. THE FILING FEES UNDOUBTEDLY HAD BEEN PAID BUT UNDER THE WRONG HEAD AND THE SUBSEQUENT RECTIFICATION OF THIS DEFEC T BY DEPOSITING FEES AFRESH IN THE CORRECT HEAD, LEGITI MATIZED THE APPEAL FILED ON THE ORIGINAL DATE ITSELF. THEREFORE , WE HOLD IN THE PRESENT FACTS AND CIRCUMSTANCES, THERE WAS NO D ELAY IN FILING THE APPEAL AT ALL. 6. IN ANY CASE IT STANDS REASONABLY DEMONSTRATED T HAT THE DELAY WAS INADVERTENT .THAT THE DEFECT IN FILING TH E APPEAL WAS NOT DELIBERATE AND CORRECTIVE ACTION WAS TAKEN BY T HE ASSESSEE IMMEDIATELY ON BEING NOTIFIED OF THE DEFECT. THE DE LAY IF ANY THEREFORE DESERVES TO BE CONDONED. AND WAS ACCORDIN GLY DONE SO IN OPEN COURT. 7. THEREAFTER PROCEEDING WITH THE APPEAL ,IT WAS C OMMON GROUND THAT A SOLITARY AND IDENTICAL ISSUE WAS RAI SED IN BOTH THE APPEALS,RELATING TO THE TREATMENT OF INTEREST E ARNED ON FIXED DEPOSITS MADE OUT OF FUNDS OF THE ASSESSEE IN THE PERIOD PRIOR TO COMMENCEMENT OF BUSINESS, WHETHER REVENUE OR CAPITAL. 8. SINCE THE ISSUE INVOLVED WAS IDENTICAL IN BOTH T HE APPEALS ,THEY WERE TAKEN UP TOGETHER FOR HEARING AND ARE BE ING DISPOSED OFF BY A COMMON ORDER.FOR THE SAKE OF CONV ENIENCE, ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 5 OF 21 WE SHALL BE DEALING WITH THE FACTS IN ITA NO.789/CHD/2019 RELATING TO ASSESSMENT YEAR 2014-15 AND OUR DECISION RENDERED IN THIS APPEAL SHALL ALSO APPLY MUTATIS MU TANDIS TO THE OTHER APPEAL OF THE ASSESSEE IN ITA NO.789/CHD/2019 RELATING TO ASSESSMENT YEAR 2015-16 ITA NO.789/CHD/2019(A.Y.2014-15) : 9. THE EFFECTIVE GROUND RAISED BY THE ASSESSEE REA DS AS UNDER: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.11,64,79,756 MADE BY TAXING THE INTEREST AS THE INCOME OF THE APPELLANT UNDER THE HEAD INCOME FROM OTHER SOURCES AND THAT TOO WITHOUT ALLOWING THE SET OFF OF THE INTEREST PAID ON BORROWED FUNDS FROM THE SAME. FACT OF THE MATTER IS THAT THE INTEREST ACCRUED WAS TO BE SET OFF AGAINST THE CAPITAL WORK IN PROGRESS AND DID NOT TANTAMOUNT TO BE THE INCOME OF THE APPELLANT. 10. DRAWING OUR ATTENTION TO THE FACTS OF THE CASE FROM THE ASSESSMENT ORDER, THE LD.COUNSEL FOR THE ASSESSEE P OINTED OUT THAT THE ASSESSEE COMPANY NAMELY, HP. POWER TRANSMISSION CORPORATION LIMITED (HPPTCL), AN UNDERTAKING OF GOV ERNMENT OF HIMACHAL PRADESH WAS ESTABLISHED ON 27 TH AUGUST, 2008 WITH A VIEW TO STRENGTHEN THE TRANSMISSION NETWORK IN HIMACHAL PRADESH AND TO FACILITATE EVACUATION OF PO WER FROM UPCOMING GENERATING PLANTS. THE JOBS ENTRUSTED TO ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 6 OF 21 CORPORATION BY HP. GOVERNMENT INTER-ALIA INCLUDED E XECUTION OF ALL NEW WORKS - BOTH TRANSMISSION LINES AND SUBS TATIONS OF 66KV AND ABOVE VOLTAGE RATINGS, FORMULATION, UPD ATION, EXECUTION OF TRANSMISSION MASTER PLAN OF HP FOR STRENGTHENING OF TRANSMISSION NETWORK AND EVACUATIO N OF POWER. BESIDES, COORDINATING THE TRANSMISSION RELAT ED ISSUES WITH CTU, CEA/OP (GOI), HP GOVERNMENT AND HPSEBL. HPPTCL WAS ALSO RESPONSIBLE FOR PLANNING AND CO-ORD INATION OF TRANSMISSION RELATED ISSUES WITH IPPS, CPSUS, ST ATE PSUS, HPPCL AND OTHER STATE/CENTRAL GOVERNMENT AGENCIES. THE ASSESSEE COMPANY WAS YET TO START COMMERCIAL OPERATION. THE STATEMENT SHOWING INCIDENTAL EXPENDITURE DURING CON STRUCTION (PENDING ALLOTMENT) HAD BEEN PREPARED. HOWEVER, PRO FIT & LOSS ACCOUNT FOR EARNING OF OTHER INCOME HAD BEEN PREPAR ED. AS PER THE DETAILS OF 'OTHER INCOME', THE ASSESSEE COMPANY HAD EARNED INTEREST ON BANK DEPOSIT OF RS.11,64,79,756/ - DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR. THE INT EREST WAS EARNED ON SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE COMPANY, HOWEVER, THE SAME WAS NOT OFFERED FOR TAXATION. THE SAID FACT WAS CONFRONTED TO THE ASSESSEE DURING ASSESSME NT PROCEEDINGS WHO FILED DETAILED REPLY. THE AO REJECT ED THE SAME POINTING OUT THAT IDENTICAL ARGUMENTS AND SUBMISSIO NS HAD BEEN REJECTED BY THE ITAT IN THE CASE OF THE ASSESS EE ITSELF IN THE APPEAL FOR ASSESSMENT YEAR 2010-11 AND THAT THE ISSUE ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 7 OF 21 WAS SQUARELY COVERED BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF TUTICORIN ALKALI CHEMICALS & F ERTILIZERS LTD. VS. CIT (1997) 227 ITR 172 (SC). ACCORDINGLY, THE INTEREST OF RS.11,64,79,756/- WAS ASSESSED TO TAX IN THE HAN DS OF THE ASSESSEE AS INCOME FROM OTHER SOURCES. 11. THE MATTER WAS CARRIED IN APPEAL BEFORE THE L D.CIT(A) WHO UPHELD THE ORDER OF THE AO STATING THAT NO DIST INGUISHING FACTS HAD BEEN POINTED OUT BY THE ASSESSEE FROM THE PRECEDING YEARS WHEREIN THE ISSUE HAD BEEN DECIDED AGAINST TH E ASSESSEE BY THE ITAT. THE RELEVANT FINDINGS OF THE LD.CIT(A) AT PARA 5.2 TO 5.2.2 OF THE ORDER ARE AS UNDER: 5.2 THE ISSUE IS REGARDING THE TAXABILITY OF INTERE ST INCOME RECEIVED ON THE FUNDS PARKED WITH VARIOUS BANKS OR OTHERWISE AS MENTIONED ABOVE. THE ISSUE UNDER CONSIDERATION I S NOT A NEW ISSUE. THIS IS A DECIDED ISSUE AGAINST THE ASSE SSES BY CIT(A) IN ITS OWN CASES FOR THE A.Y.2010-11 & 2011- 12 IN APPEAL NO. IT/74/2013- 14/SML DATED 27/06/2014 AND APPEAL NO.LT/375/13-14/SML DATED 05.11.2014. THE OR DER OF THE CIT(A) DATED 05.11.2014 FOR A.Y. 2011-12 HAS BE EN CONFIRMED BY THE JURISDICTIONAL ITAT IN ITA NO. 68/ CHD/2015 VIDE ORDER DATED 04.08.2015. THE APPEAL HAS BEEN DE CIDED AGAINST THE ASSESSEE BY THE ITAT BY RELYING ON ITS OWN ORDER IN ITA NO. 488/CHD/2012 AND 169/CHD/2013 FOR THE A. Y. 2008-09 & 2009-10. 5.2.1 HOWEVER, DURING THE YEAR THE APPELLANT HAS TR IED TO DISTINGUISH ON FACTS BY ARGUING THAT THE FUNDS FROM ADB WERE SPECIFICALLY ADVANCED FOR SPECIFIC PURPOSES AND THE INTEREST ACCRUED ON THE FDRS MADE FROM THE SAID ACCOUNTS AND FUNDS AND THE INTEREST PAID ON THE SAME ARE CLEARLY INTER LINKED AND NEED TO BE SET OFF. THE APPELLANT HAS RELIED ON THE JUDGMENT OF THE JURISDICTIONAL ITAT IN THE CASE OF H.P. POWE R CORPORATION ITA NO.842/CHD/2014 DATED 06.05.2015. T HE APPELLANT IN THE YEAR UNDER CONSIDERATION HAS HOWEV ER RELIED ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 8 OF 21 ON THE ORDER OF THIS OFFICE IN THE CASE OF M/S. H.P . POWER CORPORATION LTD. WHICH HAS BEEN DECIDED BY FOLLOWIN G THE ORDER OF THE JURISDICTIONAL ITAT IN ITA NO. 842/CHD /2014 DATED 06.05.2015. HOWEVER, THE APPELLANT HAS FAILED TO EXPLAIN AS TO HOW THE FACTS OF THE CASE UNDER CONSI DERATION ARE DIFFERENT FROM THE FACTS OF THE CASE FOR A.Y. 2013-14 WHEREIN THE APPEAL OF TINE ASSESSEE HAS BEEN DISMIS SED VIDE ORDER DATED !T/395/15-16/SHIMLA DATED 28.10.2016. T HE SAID ORDER HAS BEEN UPHELD BY THE JURISDICTIONAL IT AT IN ITA NO. 1443/CHD/2016 DATED 18.04.2017 WHEREIN THE APPE LLANT ARGUED ON SIMILAR LINES AS REPRODUCED SUPRA WHICH WERE DISMISSED. IT IS ALSO NOT OUT OF PLACE TO MENTIONED THAT THE LONG TERM LOANS FROM ADB AS SEEN FROM SCHEDULE 4 OF THE BALANCE SHEET IN A.Y. 2013-14 IS SHOWN AT RS.6136.0 6 LACS AND AT RS.11056.06 IN A.Y. 2014-15. THUS, WHAT IS SEEN IS THAT THE LOANS FROM ADB WERE RAISED BY THE APPELLANT IN THE PRECEDING YEAR ALSO. MOREOVER, THE APPELLANT VIDE ORDER SHEET DATED 22.03.2019 ALSO EXPRESSED THE INABILITY TO BIFURCATE THE USE OF FUNDS AND INTEREST PAID W.R.T. EQUITY AND REC LOANS. ACCORDINGLY, IT IS HELD THAT THE FACTS IN THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS FOR A.Y. 2013-14. THE ASSESSEE HAS BROUGHT NOTHING ON RECORD TO SHOW HOW THE FACTS OR THE LEGAL POSITION DURING THE YEAR UNDER C ONSIDERATION IS ANYWAY DIFFERENT FROM THE PRECEDING YEARS. THE I SSUE IS SQUARELY COVERED BY THE DECISIONS OF THIS OFFICE DU LY CONFIRMED BY ITAT IN THE PRECEDING YEARS AS DETAILED SUPRA. 5.2.2 THEREFORE, IT IS HELD THAT THERE IS NO INFIRM ITY IN THE ORDER OF THE A.O. AND THE ORDER OF THE A.O. IN MAKI NG THE ADDITION OF RS.11,64,79,756/- ON ACCOUNT OF 'INCOME FROM OTHER SOURCES' NEEDS NO INTERFERENCE AND THE SAME IS CONF IRMED. IN THE RESULT, ORDER OF THE A.O. UPHELD AND THE APP EAL OF THE ASSESSEE IS DISMISSED. 12. BEFORE US THE LD.COUNSEL FOR THE ASSESSEE THOU GH FAIRLY ADMITTED THAT THE FINDINGS OF THE AUTHORITIES BELOW WAS CORRECT THAT THIS ISSUE HAD BEEN ADJUDICATED IN THE PRECEDING YEARS ALSO AGAINST THE ASSESSEE BY THE ITAT, BUT AT THE SAME TIME HE POINTED OUT THAT CERTAIN FACTS DISTINGUISHE D THE CASE OF THE ASSESSEE FROM THE PRECEDING YEARS AND IN VIE W OF THOSE ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 9 OF 21 FACTS THE ISSUE STOOD SQUARELY COVERED BY THE ORDER OF THE ITAT IN THE CASE OF M/S H.P. POWER CORPORATION LTD. IN I TA NO.842/CHD/2014 FOR ASSESSMENT YEAR 2010-11 WHICH H AD ADJUDICATED IN FAVOUR OF THE ASSESSEE. HE FIRST DR EW OUR ATTENTION TO THE ORDER OF THE ITAT IN THE CASE OF M/S H.P. POWER CORPORATION LTD.(SUPRA) PLACED BEFORE US AT P APER BOOK PAGE NO.42-47 AND DREW OUR ATTENTION TO THE SPECIFI C FINDINGS OF THE ITAT AT PARA 8 OF THE ORDER AS UNDER: 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS CAREFULL Y WE FIND THAT DURING THIS YEAR ASSESSEE HAS BORROWED CERTAIN FUND S AS MENTIONED IN THE SUBMISSIONS BEFORE AO FROM PFC AND ADB. THE ASSESSEE HAD EARLIER TAKEN THE MONEY FROM DELHI JAL BOARD ON WHICH NO INTEREST WAS REQUIRED TO BE PAID. IT WAS H ELD IN THE EARLIER YEAR IN ASSESSEES OWN CASE THAT INTEREST O N SUCH INVESTMENT OF THESE FUNDS WOULD BE TAXABLE. IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN CASE OF TUTICO RIN ALKALI CHEMICALS AND FERTILIZERS LTD. VS. CIT 227 ITR 172. HOWEVER, THE INTEREST EARNED ON TEMPORARY INVESTMENT MADE OU T OF THE BORROWED FUNDS CAN NOT BE TAXED BECAUSE THESE FUNDS HAVE BEEN SPECIFICALLY BORROWED FOR THE PURPOSE OF PROJE CT BUT PROJECT WAS DELAYED AND THEREFORE FUNDS WERE PARKED IN TEMP ORARY INVESTMENT IN THE FORM OF FDR. SAME VIEW WAS TAKEN IN THE CASE OF M/S BEAS VALLEY POWER, CORPORATION LTD. VS. THE ACIT IN ITA NO. 857/CHD/2012 IT WAS OBSERVED AT PAGE 12 & 13 AS UNDER: 12. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 12(I) ON CONSIDERATION OF THE AB OVE FACTS AND MATERIAL ON RECORD, WE DO NOT FIND ANY JUSTIFIC ATION TO SUSTAIN THE FINDINGS OF THE AUTHORITIES BELOW. IT I S NOT IN DISPUTE THAT ASSESSEE CORPORATION IS A GOVERNMENT COMPANY PROMOTED BY H.P. STATE ELECTRICITY BOARD LT D. THE ASSESSEE HAS ADMITTEDLY NOT STARTED COMMERCIAL OPER ATION IN THE YEAR UNDER CONSIDERATION AND WAS STILL IN TH E PRE- OPERATIVE STAGE. THE ASSESSEE CLAIMED THAT IT HAS N O SURPLUS FUNDS BUT THE FINDING OF THE AUTHORITIES BE LOW 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 S URPLUS ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 10 OF 21 FUNDS AVAILABLE WITH THE ASSESSEE. THE ASSESSEE ALS O CLAIMED THAT ITS FUNDS WERE TEMPORARILY EMPLOYED FO R SHORT TERM DEPOSITS FOR EFFICIENTLY AND EFFECTIVELY USE O F ITS FUNDS SO AS TO REDUCE THE TOTAL COST OF THE PROJECT. THE LD. CIT(APPEALS) ALSO PARTLY AGREED WITH THE SUBMISSION OF THE ASSESSEE THAT PART FUNDS WERE INVESTED FOR SETTING UP OF THE PLANT & MACHINERY. THE ASSESSEE'S COUNSEL HAS REFER RED TO THE ACCOUNTS OF THE ASSESSEE AT PAGE 15 OF THE PAPE R BOOK TO SHOW THAT ASSESSEE RECEIVED LESSER INTEREST OF R S. 625.97 LACS AND PAID INTEREST ON LOAN AT RS. 3652.4 4 LACS IN THE YEAR UNDER CONSIDERATION WOULD SHOW THAT ASS ESSEE HAS TO PAY MORE INTEREST AS AGAINST THE SMALL INTER EST RECEIVED BY ASSESSEE. THEREFORE, IF ANY ADJUSTMENT IS MADE AGAINST INTEREST PAID, STILL THERE IS A LIABILITY O F THE ASSESSEE TO PAY INTEREST ON THE LOANS. THE ASSESSEE ALSO EXP LAINED THAT FOR EFFECTIVE FUNDS MANAGEMENT, THE TEMPORARY SURPLUS FUNDS WERE KEPT IN SHORT TERM BANK DEPOSITS AND THEREAFTER, INTEREST WAS EARNED AND SO WAS ALSO USE D FOR CONSTRUCTION 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 I N THE CASE OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. VS. CIT (SUPRA) WAS TOTALLY MISPLACED. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS BOKARO STEEL LTD. HELD AS UND ER : HELD, DISMISSING THE APPEAL, THAT THE FIRST THREE H EADS OF INCOME WERE (I) THE RENT CHARGED BY THE ASSESSEE TO ITS CONTRACTORS FOR HOUSING WORKERS AND STAFF EMPLOYED BY THE CONTRACTOR FOR THE CONSTRUCTION WORK OF THE ASSESSE E INCLUDING CERTAIN AMENITIES GRANTED TO THE STAFF BY THE ASSESSEE, (II) HIRE CHARGES FOR PLANT AND MACHINERY WHICH WAS GIVEN TO THE CONTRACTORS BY THE ASSESSEE FOR US E IN THE CONSTRUCTION WORK OF THE ASSESSEE, AND (II) INTERES T FROM ADVANCES MADE TO THE CONTRACTORS BY THE ASSESSEE FO R THE PURPOSE OF FACILITATING THE WORK OF CONSTRUCTION. T HE ACTIVITIES OF THE ASSESSEE IN CONNECTION WITH ALL T HESE THREE RECEIPTS WERE DIRECTLY CONNECTED WITH OR INCIDENTAL TO THE WORK OF CONSTRUCTION OF ITS PLANT UNDERTAKEN BY THE ASSESSEE. THE ADVANCES WHICH THE ASSESSEE MADE TO T HE CONTRACTORS TO FACILITATE THE CONSTRUCTION ACTIVITY OF PUTTING TOGETHER A VERY LARGE PROJECT WAS AS MUCH TO ENSURE THAT THE WORK OF THE CONTRACTORS PROCEEDED WITHOUT ANY F INANCIAL HITCH AS TO HELP THE CONTRACTORS. THE ARRANGEMENTS WHICH WERE MADE BETWEEN THE ASSESSEE-COMPANY AND THE CONTRACTORS PERTAINING TO THESE THREE RECEIPTS WERE ARRANGEMENTS WHICH WERE INTRINSICALLY CONNECTED WIT H THE ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 11 OF 21 CONSTRUCTION OF ITS STEEL PLANT. THE RECEIPTS HAD B EEN ADJUSTED AGAINST THE CHARGES PAYABLE TO THE CONTRAC TORS AND HAD GONE TO REDUCE THE COST OF CONSTRUCTION. TH EY HAD, THEREFORE, BEEN RIGHTLY HELD AS CAPITAL RECEIPTS AN D 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 (DE LHI) HELD AS UNDER : THE ASSESSEE-COMPANY WAS INCORPORAT ED IN PURSUANCE OF A JOINT VENTURE ENTERED INTO BETWEEN I NDIAN OIL CORPORATION AND M OF JAPAN TO SET UP A POWER PR OJECT. IN ORDER TO EFFECTUATE THE PURPOSE FOR WHICH THE JO INT VENTURE WAS CONCEIVED, SHARE CAPITAL WAS CONTRIBUTE D BY THESE TWO CORPORATIONS WHICH INCLUDED RS. 20 CRORES BY WAY OF ADDITIONAL SHARE CAPITAL. THE ASSESSING OFFI CER TREATED THE INTEREST EARNED ON MONIES RECEIVED AS S HARE CAPITAL BY THE ASSESSEE TEMPORARILY PLACED IN A FIX ED DEPOSIT AWAITING ACQUISITION OF LAND WHICH HAD RUN INTO LEGAL ENTANGLEMENTS ON ACCOUNT OF TITLE AS 'INCOME FROM OTHER SOURCES'. THE COMMISSIONER (APPEALS) ACCEPTED THE STAND OF THE ASSESSEE THAT THE INTEREST WAS IN THE NATURE OF A CAPITAL RECEIPT WHICH WAS LIABLE TO BE SET OFF AG AINST PRE- OPERATIVE EXPENSES. THE TRIBUNAL REVERSED THIS ORDE R. ON APPEAL : HELD, ALLOWING THE APPEALS, THAT THE FUNDS IN THE FORM OF SHARE CAPITAL WERE INFUSED FOR THE SPECIFIC PURPOSE OF ACQUIRING LAND AND THE DEVELOPMENT OF INFRASTRUC TURE. THEREFORE THE INTEREST EARNED ON FUNDS PRIMARILY BR OUGHT FOR IN THE BUSINESS COULD NOT BE CLASSIFIED AS 'INCOME FROM OTHER SOURCES. SINCE THE INCOME WAS EARNED IN A PE RIOD PRIOR TO COMMENCEMENT OF BUSINESS IT WAS IN THE NAT URE OF A CAPITAL RECEIPT AND WAS REQUIRED TO BE SET OFF AGAI NST PRE- OPERATIVE EXPENSES. 13. CONSIDERING THE FACTS OF TH E CASE IN THE LIGHT OF THE ABOVE DECISIONS, IT IS CLEAR THAT THE FUNDS WITH THE ASSESSEE, EVEN IF TEMPORARILY USED FOR SAVINGS/SHORT TERM DEPOSITS, BUT THE EARNING OF THE INTEREST WERE DIRECTLY CONNECTED WITH WORK OF CONSTRUCTION O F THE PROJECT EMPLOYED BY THE ASSESSEE. THEREFORE, THE EA RNING OF INTEREST COULD NOT BE TREATED AS INCOME FROM OTHER SOURCES, SINCE THE INCOME WAS EARNED IN THE PERIOD PRIOR TO COMMENCEMENT OF THE BUSINESS AND IT WAS THE NATURE OF CAPITAL RECEIPT AND WAS REQUIRED TO BE SET OFF AGAI NST PRE- OPERATIVE EXPENSES. WE, THEREFORE, SET ASIDE THE OR DERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 83,06,897/-. HOWEVER THE DETAILS OF THESE FUNDS ARE NOT AVAILABL E ON RECORD THEREFORE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 12 OF 21 MATTER BACK TO THE FILE OF AO WITH A DIRECTION TO E XAMINE BIFURCATION OF FUNDS BORROWED BY THE ASSESSEE AND F UNDS OWNED BY THE ASSESSEE. INTEREST EARNED ON ACCOUNT OF FUND S BORROWED SHOULD NOT BE SUBJECTED TO TAX AND ONLY INTEREST ON BALANCE SURPLUS FUNDS SHOULD BE SUBJECTED TO TAX. 13. REFERRING TO THE SAME HE POINTED OUT THAT IN TH E FACTS OF THE SAID CASE THE ASSESSEE HAD BORROWED FUNDS FROM ADB (ASIAN DEVELOPMENT BANK) SPECIFICALLY FOR THE PURPO SE OF THE PROJECT BUT SINCE THE PROJECT WAS DELAYED THE FUNDS WERE PARKED IN TEMPORARY INVESTMENT IN THE FORM OF FDR. IN THIS FACTUAL BACKGROUND THE ITAT, FOLLOWING ITS DECISION IN THE CASE OF M/S BEAS VALLEY POWER CORPORATION LTD. VS. ACIT IN ITA NO.857/CHD/2012, HAD HELD THAT THE INTEREST OF SUCH SPECIFICALLY BORROWED FUNDS BE NOT SUBJECTED TO TAX . THE LD.COUNSEL FOR THE ASSESSEE THEREAFTER STATED THAT IN THE IMPUGNED CASE ALSO THE ASSESSEE HAD BORROWED PROJEC T SPECIFIC FUNDS FROM ADB AND ON ACCOUNT OF CERTAIN DELAYS IN EXECUTION OF THE PROJECT THE FUNDS COULD NOT BE UTILIZED AND WERE, THEREFORE, PARKED IN FDRS EARNING INTEREST THEREON. THE AFORESAID FACTS WERE POINTED OUT TO US FROM THE ANN UAL REPORT OF THE ASSESSEE, PLACED BEFORE US AS ANNEXURE-A TO THE PAPER BOOK. OUR ATTENTION WAS DRAWN TO PAGE 17 OF THE ANN UAL REPORT AND IT WAS POINTED OUT THEREFROM THAT THE AS SESSEE HAD TAKEN LOAN FROM ADB AMOUNTING TO RS.11,056 LACS IN THE IMPUGNED YEAR WHICH STOOD REFLECTED IN THE SCHEDULE OF LONG TERM BORROWINGS (SCHEDULE NO.4 OF THE ANNUAL REPORT ). HE ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 13 OF 21 FURTHER DREW OUR ATTENTION TO THE COPY OF LOAN AGRE EMENT ENTERED INTO BY THE ASSESSEE WITH ADB PLACED BEFORE US AT PB PAGE NO.2-29. LD.COUNSEL SPECIFICALLY DREW OUR ATTE NTION TO CLAUSE 5 OF SCHEDULE 3 OF THE AGREEMENT DEALING WIT H ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS ,WHICH R EAD AS UNDER : IMPREST ACCOUNTS AND STATEMENT CF EXPENDITURES 5. EXCEPT AS ADB MAY OTHERWISE AGREE, THE BORROWER MAY ESTABLISH, AND CAUSE TO BE ESTABLISHED, IMMEDIATELY AFTER THE EFFECTIVE DATE, (I) A FIRST GENERATION IMPREST ACCOUNT AT THE RESERVE BANK OF I NDIA, AND (II) A SECOND GENERATION IMPREST ACCOUNT FOR HPPTCL AT A COMMERCI AL BANK ACCEPTABLE TO ADB (COLLECTIVELY, IMPREST ACCOUNTS). THE IMPRES T ACCOUNTS SHALL BE ESTABLISHED, MANAGED, REPLENISHED AND LIQUIDATED IN ACCORDANCE WITH ADB'S LOAN DISBURSEMENT HANDBOOK, AND DETAILED ARRA NGEMENTS AGREED UPON BETWEEN THE BORROWER AND ADB. THE IMPREST ACCO UNTS SHALL ONLY BE USED FOR THE PURPOSES OF THE PROJECT. THE CURRENCY OF THE FIRST GENERATION IMPREST SCCOUNT SHALL BE THE DOLLAR, AND THE CURREN CY OF THE SECOND GENERATION IMPREST ACCOUNTS DEPOSITED INTO THE IMPR EST ACCOUNTS SHALL BE THE RUPEE. THE AGGREGATE AMOUNT TO BE EXPENDITURE TO BE DEPOSITED INTO THE IMPREST ACCOUNTS SHALL NOT EXCEED THE LOWER OF (I) THE ESTIMATED EXPENDITURE TO BE FINANCED FROM THE IMPREST ACCOUN TS FOR THE FIRST 6 MONTHS OF PROJECT IMPLEMENTATION, OR (II) THE EQUIVALENT O F 10% OF THE LOAN AMOUNT. 14. REFERRING TO THE SAME HE POINTED OUT THAT THE L OAN DISBURSED COULD NOT HAVE BEEN USED BY THE ASSESSEE FOR ANY PURPOSE OTHER THAN THAT FOR WHICH IT WAS GRANTED B EING FUNDING OF FOUR TRANSMISSION PROJECTS AS MENTIONED IN THE AGREEMENT AS UNDER :(P.B 3) WH EREAS THE GOVERNMENT OF INDIA IS TAKING A LOAN OF 3 50 MILLION U S DOLLAR FROM ASIAN DEVELOPMENT BANK IN VARIOUS BRANCHES UND ER HIMACHAL PRADESH CLEAN ENERGY TRANSMISSION INVESTMENT PROGRAMME FOR EXECUTION OF VARIOUS TRANSMISSION PROJECTS COVERED IN POWER, SYSTEM MAST ER PLAN FOR HIMACHAL PRADESH. OUT OF THE ABOVE LOAN OF 350 MILLION U S D OLLAR, TRANCHE-1 LOAN OF 113 MILLION U S DOLLAR SHALL FUND FOLLOWING FOUR NU MBER TRANSMISSION ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 14 OF 21 PROJECTS : I ) 22/66/220 KV , '(22/66 KV, 2X10 MVA +66/220 KV, 31.5 MVA) GIS SUB STATION AT BHOKTOO IN DISTT. KINNAUR WITH LILO OF ONE CIRCUIT OF 220 KV KASHANG-BHABA D/C LINE. II) 220 KV (TWIN MOOSE) D/C LINE FROM HATKOTI TO PL ANNED 220/400 KV SUB STATION AT PRAGATI NAGAR IN DISTT. SHIMIA. ; III) 220/400 KV, 315 MVA GIS SUB STATION AT PRAGATI NAGAR IN DISTT. SHIMLA WITH LILO OF BOTH CIRCUITS OF 400 KV JHAKRI- ABDULL APUR D/C LINE OF PGCIL. IV) 66/220/400 KV GIS SUB STATION ( 65/220 KV, 2X80 /100 MVA+220/400 KV, 2X315 MVA) AT WANGTOO IN DISTT. KINNAUR WITH LI LO OF BOTH CIRCUITS | OF 220 KV KASHANG- BHABA AND 400 KV WANGTOO- ABDULL APUR D/C LINES. AND WHEREAS FUTURE TRANCHES SHALL FUND TRANSMISSION PROJECTS IN DISTT. KULLU, DISTT KANGRA & DISTT. MANDI (REAS BASIN), DISTT. CH AMBA (RAVI BASIN), DISTT KINNAUR (SATLUJ BASIN) AND DISTT. SHIMLA (YAMUNA BA SIN). AND WHEREAS THE GOVERNMENT OF INDIA WILL FURTHER TR ANSFER THIS LOAN GRANTED BY ASIAN DEVELOPMENT BANK TO THE GOVERNMENT OF HIMACHA L PRADESH, WHICH INTERALIA SHALL TRANSFER THE SAME TO H.P. POWER TRANSMISSION CORPORATION LIMITED (SECOND PARTY) WHICH IS DESIGNATED; IMPLEMENTING AGENCY FOR THESE TRANSMISSION PROJECTS. 15. THEREAFTER HE TOOK US TO PAGE NO.21 OF THE ANN UAL REPORT, SCHEDULE-11 BEING THE SCHEDULE OF INCOME AN D POINTED OUT THAT ON ACCOUNT OF THE INVESTMENTS MADE OUT OF THE SAID FUNDS INTEREST OF RS.246.96 LACS HAD BEEN EARNED BY THE ASSESSEE. HE ALSO POINTED OUT THAT IN THE PRECEDING YEAR THE AMOUNT OF INTEREST EARNED WAS A MEAGER AMOUNT OF R S.3.34 LACS AND WAS, THEREFORE, IMMATERIAL FOR THE DECISIO N RENDERED IN THE CASE OF THE ASSESSEE AGAINST IT BY THE ITAT IN THE PRECEDING YEAR. HE CONTENDED THAT IN VIEW OF THE ID ENTITY OF FACTS OF THE ASSESSEE IN THE IMPUGNED YEAR WITH THA T IN THE CASE OF M/S H.P. POWER CORPORATION LTD.(SUPRA) AND THE FACTS BEING DISTINGUISHABLE WITH THAT IN THE CASE OF THE ASSESSEE FOR THE PRECEDING YEAR, THE DECISION IN THE CASE OF M/S H.P. POWER ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 15 OF 21 CORPORATION LTD.(SUPRA) WAS SQUARELY APPLICABLE AND THE INTEREST EARNED, THEREFORE, WAS NOT LIABLE TO BE TA XED IN THE HANDS OF THE ASSESSEE. 16. THE LD. DR, ON THE OTHER HAND, VEHEMENTLY CONTE STED THE CLAIM OF THE LD.COUNSEL FOR THE ASSESSEE POINTING O UT THAT AS PER THE ADMISSION OF THE LD.COUNSEL FOR THE ASSESSE E ITSELF THE ADB LOAN WAS VERY MUCH THERE WITH THE ASSESSEE IN T HE PRECEDING YEAR ALSO AMOUNTING TO RS.6,136 LACS AS R EFLECTED IN THE SCHEDULE OF LONG TERM BORROWINGS OF THE SCHEDUL E-4 OF THE ANNUAL REPORT AND EVEN THOUGH MEAGER,THE FACT REMAI NED THAT INTEREST WAS EARNED BY THE ASSESSEE IN THE PRECEDIN G YEAR ALSO. SHE, THEREFORE, STATED THAT THERE WERE NO DIS TINGUISHING FACTS FROM THE PRECEDING YEAR AND THE ISSUE HAD BEE N RIGHTLY HELD TO BE COVERED BY THE ORDER OF THE ITAT IN THE CASE OF THE ASSESSEE FOR THE PRECEDING YEAR. 17. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTI ES AND HAVE ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW AND DOCUMENTS REFERRED TO BEFORE US. THE ISSUE TO BE AD JUDICATED IS REGARDING THE TREATMENT OF INTEREST RECEIVED ON FDRS/DEPOSITS MADE OUT OF FUNDS DURING THE PERIOD P ERTAINING TO THE PRE-COMMENCEMENT OF BUSINESS OF THE ASSESSEE , WHICH HAS BEEN HELD TO BE TAXABLE AS BEING REVENUE IN NAT URE BY THE REVENUE AUTHORITIES, WHILE THE ASSESSEE CLAIMS THE SAME TO BE ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 16 OF 21 CAPITAL IN NATURE. 18. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSES SEE IS THAT THOUGH ADMITTEDLY IDENTICAL ISSUE STANDS DECIDED AG AINST THE ASSESSEE IN THE PRECEDING YEARS BUT THE FACTS ARE DISTINGUISHABLE AND THE FACTS ARE ,ON THE CONTRARY , IDENTICAL TO THAT IN THE CASE OF M/S H.P. POWER CORPORATION L TD.(SUPRA) WHERE THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSES SEE. 19. WE HAVE GONE THROUGH THE AFOREMENTIONED ORDERS OF THE ITAT.IN THE ORDER PASSED BY THE ITAT IN THE CASE OF THE ASSESSEE (IN ITA NO.1443/CHD/2016 DATED 18.04.2017) WE FIND THAT THE FACT NOTED IN THE SAME AT PARA 4 OF THE OR DER IS THAT THE INTEREST WAS EARNED BY THE ASSESSEE ON SURPLUS FUNDS AVAILABLE WITH IT. ON THE BASIS OF THESE FACTS, WHI CH WERE FOUND TO BE IDENTICAL WITH THAT IN THE PRECEDING YE AR WHEREIN THE ITAT HAD HELD THE SAID INCOME TO BE TAXABLE FOL LOWING THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF T UTICORIN ALKALI CHEMICALS & FERTILIZERS LTD. (SUPRA), THE IS SUE WAS DECIDED AGAINST THE ASSESSEE. THE ITAT NOTED THAT N O DISTINGUISHING FACTS WERE FOUND IN THE PRECEDING YE AR AND, THEREFORE, TREATED THE ISSUE AS COVERED BY THE ORDE R OF THE ITAT IN THE PRECEDING YEAR IN THE CASE OF THE ASSES SEE. 20. IN THE ORDER PASSED BY THE ITAT IN THE CASE OF HP POWER ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 17 OF 21 CORPORATION IN ITA NO.842/CHD/2014 DATED 06.05.2016 ,WE FIND THAT IT WAS NOTED IN THE ORDER AT PARA 6 THAT THE ASSESSEE HAD BEEN FOUND TO HAVE BORROWED CERTAIN AMOUNT FROM ASIAN DEVELOPMENT BANK (ADB) FOR SPECIFIC PROJECT AND ON ACCOUNT OF DELAY IN THE PROJECT THEY HAD BEEN PARKED IN TEMPOR ARY INVESTMENTS IN FDRS. THE INTEREST EARNED THEREON WA S HELD BY THE ITAT TO BE NOT TAXABLE FOLLOWING THE VIEW TAKEN BY THE ITAT IN THE CASE OF M/S BEAS VALLEY POWER CORPORATI ON LTD. (SUPRA) WHEREIN THE DECISION OF THE HON'BLE APEX CO URT IN THE CASE OF TUTICORIN ALKALI CHEMICALS & FERTILIZERS LT D. (SUPRA) WAS FOUND NOT APPLICABLE AND THE DECISION OF THE CI T VS. BOKARO STEEL LTD. ON IDENTICAL ISSUE WAS FOLLOWED. WE FIND THAT IN THE SAID CASE ALSO THE ASSESSEE HAD SUBMITTED TH AT IN THE EARLIER YEARS THE ISSUE HAD BEEN DECIDED BY THE ITA T AGAINST THE ASSESSEE BUT IT WAS NOTED IN THE ORDER THAT THE FACTS DURING THE YEAR WERE PARTLY DIFFERENT WITH FUNDS HA VING BEEN BORROWED FOR SPECIFIC PURPOSE AND PARKED IN FDRS AS TEMPORARY INVESTMENTS ON ACCOUNT OF DELAY IN THE PR OJECT. THE RELEVANT FINDINGS TO THIS EFFECT BY THE ITAT ARE AT PARAS 6 TO 8 OF ITS ORDER WHICH STANDS REPRODUCED ABOVE IN EARLI ER PART OF OUR ORDER. THUS THE DISTINCTION IN FACTS IN THE AFORESTATED TW O ORDERS IS THAT WHILE IN THE CASE OF THE ASSESSEE IN EARLIER Y EARS THE ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 18 OF 21 INTEREST WAS FOUND TO BE EARNED ON SURPLUS FUNDS AN D HENCE HELD TAXABLE, IN THE CASE OF HP POWER CORPORATION ( SUPRA) THE INTEREST WAS EARNED ON SPECIFIC PURPOSE FUNDS DEPOS ITED IN FDRS ON ACCOUNT OF DELAY IN EXECUTION OF PROJECTS AND THEREFORE HELD NOT TAXABLE . 21. IN THE PRESENT CASE THE LD.COUNSEL FOR THE ASSE SSEE HAS DRAWN OUR ATTENTION TO THE FACTS POINTING OUT THAT THE LOANS HAD BEEN TAKEN FROM ADB BY THE ASSESSEE ALSO AMOUNT ING TO RS.11,056 LACS ON WHICH INTEREST INCOME OF RS.246.9 6 LACS HAD BEEN EARNED AND THAT THESE LOANS WERE TO BE UTILIZE D FOR SPECIFIC PROJECTS AND ON ACCOUNT OF DELAY IN THE PR OJECT IN THE PROJECT THE SAME HAD BEEN PARKED IN TEMPORARY FUNDS . THE AFORESAID FACTS,CLEARLY, ARE IDENTICAL TO THAT IN T HE CASE OF M/S H.P. POWER CORPORATION LTD.(SUPRA). 22. MOREOVER ,THE FACTS IN THE PRESENT CASE HAVE BE EN DEMONSTRATED BEFORE US TO BE DISTINGUISHABLE FROM T HAT IN THE PRECEDING YEAR IN THE CASE OF THE ASSESSEE WHERE ON LY SURPLUS FUNDS WERE FOUND TO BE AVAILABLE WITH THE ASSESSEE. NO DOUBT IN THE PRECEDING YEAR ALSO INTEREST WAS EARNED ON A DB FUNDS(SPECIFIC PURPOSE FUNDS) DEPOSITED IN FDRS , BUT THE SAME WAS A MEAGER AMOUNT OF RS.3.34 LACS AS AGAINST INTEREST EARNED ON OTHER FUNDS OF RS. 1206.78 LACS ,WHICH FA CTS ARE RECORDED IN THE ANNUAL ACCOUNTS OF THE ASSESSEE . W HILE IN THE ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 19 OF 21 IMPUGNED YEAR THE AMOUNT OF INTEREST EARNED ON ADB FUNDS IS RS.246.96 LACS WHILE THAT EARNED ON OTHER DEPOSITS IS RS.918.30 LACS. THE FACTS RELATING TO THE ISSUE BEF ORE US ,BEING INTEREST EARNED ON DEPOSITS, ARE THEREFORE CLEARLY DISTINGUISHABLE FROM THE PRECEDING YEAR WHEREIN THE RE WAS HARDLY ANY INCOME EARNED FROM SPECIFIC PURPOSE LOAN FUNDS DEPOSITED IN FDRS(ADB LOANS) AND PRIMARILY INTERES T INCOME WAS EARNED FROM OTHER SURPLUS FUNDS, WHILE IN THE I MPUGNED YEAR A SUBSTANTIAL PORTION OF INTEREST INCOME IS FO UND TO HAVE BEEN EARNED FROM DEPOSITS MADE FROM SPECIFIC PURPOS E LOAN FUNDS(ADB LOANS). 23. THE ARGUMENT OF THE LD.DR THAT ADB LOAN WAS BEI NG AVAILED BY THE ASSESSEE IN BOTH THE YEARS ESTABLISH ES IDENTITY OF FACTS,WE FIND, IS NOT CORRECT. SINCE THE ISSUE BEFORE US RELATES TO INTEREST INCOME EARNED , THE RELEVANT FACT IS THE NATURE AND COMPOSITION OF INTEREST INCOME EARNED , I.E ON SURPLUS FUNDS AND SPECIFIC PURPOSE FUNDS, WHICH H AS BEEN CLEARLY DISTINGUISHED FROM THE PRECEDING YEAR, AND NOT THE FACTUM OF LOAN. 24. WE THEREFORE AGREE WITH THE LD.COUNSEL FOR THE ASSESSEE THAT THE ISSUE STANDS SQUARELY COVERED BY THE DEC ISION OF THE ITAT IN THE CASE OF HP POWER CORPORATION (SUPRA), W HERE IDENTICALLY THE FACTS WERE FOUND TO BE DIFFERENT FR OM THE ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 20 OF 21 PRECEDING YEAR ON ACCOUNT OF IDENTICAL ADB LOAN TA KEN FOR SPECIFIC PROJECT PARKED TEMPORARY IN FDRS ON ACCOUN T OF DELAY IN THE PROJECT AND THE ITAT HOLDING THE CASE TO BE DISTINGUISHABLE FROM THE PRECEDING YEAR HAD RULED I N FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION OF THE ITAT IN THE CASE OF M/S BEAS VALLEY POWER CORPORATION LTD. (SUPRA). 25. IN VIEW OF THE SAME, WE HOLD THAT THE INTEREST RECEIVED TO THE EXTENT OF ADB LOAN PARKED IN INVESTMENTS IN FDR S IS NOT REVENUE IN NATURE AND NOT LIABLE TO BE TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES. 26. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED ON 24 TH JUNE, 2021. SD/- SD/- (R.L. NEGI) (ANNAPURNA GUPTA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER DATED: 24 TH JUNE, 2021 * * ! ,- .- / COPY OF THE ORDER FORWARDED TO : / THE APPELLANT / THE RESPONDENT $ / / CIT $ / ( )/ THE CIT(A) -01 2 , & 2 , 34516 / DR, ITAT, CHANDIGARH 15 / GUARD FILE $ / BY ORDER, / ASSISTANT REGISTRAR ITA NOS.789 & 790/CHD/2019 A.YS. 2 014-15 &2015-16 PAGE 21 OF 21 DRAFT DICTATED 09.06.2021 SR.PS DRAFT PLACED BEFORE AUTHOR 06.2021 SR.PS APPROVED DRAFT COMES TO THE SR.PS/PS 06.2021 SR.PS ORDER SIGNED AND PRONOUNCED ON FILE SENT TO THE BENCH CLERK SR.PS DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.