Supreme Court of India
The Commissioner of Income Tax-iv, Ahmedabad v. M/s. Shree Rama Multi Tech Ltd.
INSC stands for INDIAN SUPREME COURT. A neutral citation scheme assigned by the Court itself, so a judgment can be cited without depending on a commercial law reporter. INSC is the neutral citation scheme assigned by the Supreme Court, so a judgment can be cited without depending on a commercial law reporter.
What the Court ordered
We are of the view that the High Court was right in upholding the decision of the Tribunal dat ed 21.10.2011 that the interest income earned out of the share application money is liable to be set off against the public issue expenses.
Judgment, page 7
From the headnote
Income Tax Act, 1961 – Deduction – Share application money deposited in bank – Interest income earned therefrom – Claim for set off of interest income against the public issue expe nses – Held: If the share application money that is received is de posited in the bank in light of the statutory mandatory requiremen t then the accrued interest is not liable to be taxed and is eligible fo r deduction against the public issue expenses – Such interest e arned is inextricably linked with requirement of company to raise share capital and is thus adjustable towards the expendit ures involved for the
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