Assessee-company, engaged in development of Chenani-Nashri Tunnel project on BOT basis, had parked borrowed funds and promoter’s contribution temporarily in short-term fixed deposits pending utilisation for construction of project. Assessee capitalised interest earned on such deposits and reduced the same from the cost of capital work-in-progress. Assessing Officer treated said interest as taxable under head ‘Income from other sources’. CIT(A) held that  W since entire funds were raised for execution of project and temporary parking of funds was only to ensure liquidity and reduce overall project cost, interest earned thereon was inextricably linked with setting up of infrastructure facility and such interest, being capital in nature, had to be reduced from capital work-in-progress and could not be brought to tax under head ‘Income from other sources’. On appeal, the Tribunal affirmed the order of the CIT(A). (AY. 2012-13)