Assessee earned interest on deposit placed with a bank with object of availing credit facilities for importing equipments for setting up of its new plant. Tribunal held that interest income earned on such deposit was inextricably linked or connected to setting up of plant and, therefore, interest was to be treated as capital receipt. (AY. 2011-12)
ITO v. Chiripal Poly Films Ltd. (2019) 177 ITD 441/ 202 TTJ 317 / 184 DTR 162 (Mum.) (Trib.)
S. 4 : Charge of income-tax -Deposit with a bank to avail credit facilities for importing equipments for setting up new plant- Interest earned was to be treated as capital receipt. [S. 56].