SIGN IN SUBSCRIBE

News Update

GST - Payment of pre-deposit through Form GST DRC-03 instead of the prescribed Form APL-01 - Petitioner attributes it to technical glitches - Respondent is the proper authority to decide the question of fact: HC2nd Session of India-Nigeria Joint Trade Committee held in AbujaGST - Since SCN is bereft of any details and suffers from infirmities that go to the root of the cause, SCN is quashed and set aside: HC1717 candidates to contest elections in phase 4 of Lok Sabha ElectionsGST - Once Appellate Authority comes to the conclusion that SCN was issued by an officer who was not competent; reply was also considered by an incompetent authority and the Competent Authority had not applied its independent mind, Appellate Authority could not have assumed original jurisdiction and proceeded further with the matter: HC7th India-Indonesia Joint Defence Cooperation Committee meeting held in New DelhiGST - Neither the Show Cause Notice nor the order spell out the reasons for retrospective cancellation of registration, therefore, the same cannot be sustained: HCMining sector registers record production in FY 2023-24GST - If the proper officer was of the view that the reply is unclear and unsatisfactory, he could have sought further details by providing such opportunity - Having failed to do so, order cannot be sustained - Matter remanded: HCAnother quake of 6.0 magnitude rocks Philippines; No damage reported so farI-T - Initial burden of proof rested on assessee to substantiate his claim of having incurred expenditure on improvement of property: ITATTrade ban: Israel hits back against Turkey with counter-measuresI-T - Agricultural income can be treated by ITO as undisclosed income in absence of any substantial / corroborative material to prove same: ITATCanada arrests three persons in alleged killing of Sikh separatistI-T - Income from sale of property has to be classified & characterised only in manner of computation as per section 45(2): ITATCus - When there is nothing on record to show that appellant had connived with other three persons to import AA batteries under the guise of declaring goods as Calcium Carbonate, penalty imposed on appellant are set aside: HCCongress fields Rahul Gandhi from Rae Bareli and Kishori Lal Sharma from AmethiCus - The penalty imposed on assessee was set aside by Tribunal against which revenue is in appeal is far below the threshold limit fixed under Notification issued by CBDT, thus on the ground of monetary policy, revenue cannot proceed with this appeal: HCGST -Since both the SCNs and orders pertain to same tax period raising identical demand by two different officers of same jurisdiction, proceedings on SCNs are clubbed and shall be re-adjudicated by one proper officer: HCFormer Jharkhand HC Chief Justice, Justice Sanjaya Kumar Mishra appointed as President of GST TribunalSale of building constructed on leasehold land - GST implicationI-T - If assessee is not charging VAT paid on purchase of goods & services to its P&L account i.e., not claiming it as expenditure, there is no requirement to treat refund of such VAT as income: ITATBengal Governor restricts entry of State FM and local police into Raj BhawanI-T - Interest received u/s 28 of Land Acquisition Act 1894 awarded by Court is capital receipt being integral part of enhanced compensation and is exempt u/s 10(37): ITATCops flatten camps of protesting students at Columbia UnivI-T - No additions are permitted on account of bogus purchases, if evidence submitted on purchase going into export and further details provided of sellers remaining uncontroverted: ITATTurkey stops all trades with Israel over GazaI-T- Provisions of Section 56(2)(vii)(a) cannot be invoked, where a necessary condition of the money received without consideration by assessee, has not been fulfilled: ITATGirl students advised by Pak college to keep away from political eventsI-T- As per settled position in law, cooperative housing society can claim deduction u/s 80P, if interest is earned on deposit of own funds in nationalised banks: ITATApple reports lower revenue despite good start of the yearI-T- Since difference in valuation is minor, considering specific exclusion provision benefit is granted to assessee : ITATHome-grown tech of thermal camera transferred to IndustryI-T - Presumption u/s 292C would apply only to person proceeded u/s 153A and not for assessee u/s 153C: ITATECI asks parties to cease registering voters for beneficiary-oriented schemes under guise of surveys
 
I-T - Electricity companies can set off interest earned on borrowed funds kept with banks, against expenses incurred by them in constructing new units for power generation: ITAT

By TIOL News Service

NEW DELHI, NOV 09, 2017: THE ISSUE BEFORE THE TRIBUNAL IS - Whether companies engaged in generation of power, are eligible to set off interest earned on borrowed funds kept with the banks as securities, against the expenses incurred during construction of new units for power generation. YES is the answer.

Facts of the case:

The Assessee is a JV company, which supplies whole of the power generated by it from its old plants to SAIL and the newly set up power plant to SAIL and the State Electricity Boards as per agreed ratios at the time of its approval. The tariff to be charged was as per the method approved by CERC, a statutory body. For the AY 2010-11, the assessee filed its return declaring total loss of Rs.6,30,03,76,000/-, paid tax of Rs.21,48,00,023/- u/s 115JB on the declared book profits of Rs. 126,39,01,289/-. During the year under consideration, the assessee commenced power generation from newly set up generation units and raised additional capital as well as borrowed funds for its set up. The assessee capitalized the interest paid on the borrowings for new units till the date of generation of power and made deposits with the banks out of borrowed funds as securities for opening letters of credit etc. or advances of setting up of new units on which the assessee earned interest. Assessee treated this interest as capital receipt and set it off against the interest paid and other expenses during construction which were capitalized. However, during scrutiny, the AO made an addition of Rs. 293 lakhs towards the interest earned during the construction period which according to the assessee has to be set off against the interest that was paid on the borrowed amounts. On appeal, the CIT(A) deleted such addition.

Tribunal held that,

++ it is seen that in assessee’s own case relating to the AY 2007-08, the High Court allowed the set off of interest during the construction period and the said decision is reported in NTPC SAIL Power Co. Pvt. Ltd. vs. CIT - 2012-TIOL-652-HC-DEL-IT. Further following the said decision, a coordinate bench of this Tribunal passed the order in ITA Nos. 1494 & 1495/Del/2013 for A.Ys 2008-09 & 2009-10, wherein the set off was allowed. The Jurisdictional High Court dismissed the appeal preferred by the Department questioning the order passed by this Tribunal in ITA Nos. 1494 & 1495/Del/2013. There is no dispute as to these facts and we have gone through these orders since there is no change in circumstances, and in view of the binding precedent set by the Jurisdictional High Court in assessee’s own case for the AY 2007-08 and followed subsequently, we do not find any illegality or irregularity in the conclusion reached by the CIT(A) that interest during construction has to be allowed as set off and uphold the same.

(See 2017-TIOL-1553-ITAT-DEL)


POST YOUR COMMENTS
   

TIOL Tube Latest

TIOL Tube
Shri N K Singh, recipient of TIOL FISCAL HERITAGE AWARD 2023, delivering his acceptance speech at Fiscal Awards event held on April 6, 2024 at Taj Mahal Hotel, New Delhi.

TOP NEWS

AR not Afar by SK Rahman

VISION 360



Shri Ram Nath Kovind, Hon'ble 14th President of India, addressing the gathering at TIOL Special Awards event.

TII LATEST

TIOLCORPLAWS LATEST