ITO v. Kolkata Metro Rail Corpn. Ltd. – [2019] 102 taxmann.com 419 (Kolkata – Trib.)

Assessee was engaged in construction work for metro rail under metro project in capacity of joint venture of the Central Government and the State Government.

 Assessee obtained money from the Central Government and the State Government for execution of construction work for project.

Assessee parked money so received in bank during unutilised period and interest was earned.

 Assessing Officer (AO) treated interest so earned to be an income of assessee under head ‘income from other sources’ and brought same to tax.

It is well-settled that an income received by the assessee can be taxed under the head ‘income from other sources’ only if it does not fall under any other head of income as provided in section 14.

The head ‘income from other sources’ is a residuary head of income.

Since the income was earned by assessee in a period prior to commencement of business it was in the nature of capital receipt and was required to be set off against pre-operative expenses.