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March 2025

Capital or revenue receipt — Interest on short-term fixed deposit — Capital work-in-progress — Assessee joint venture formed by public sector undertakings to acquire coal mines overseas — Interest earned on fixed deposit of share capital prior to acquisition of coal mines and amounts returned on abandonment of proposal — Interest earned prior to commencement of business on funds brought in form of share capital for specific purpose — Interest received on fixed deposit part of capital cost and to be treated as capital work-in-progress.

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 6 mins

86. Principal CIT vs. International Coal Ventures Pvt. Ltd.

[2025] 472 ITR 307 (Del)

A. Ys. 2012-13

Date of order: 20th December, 2024

S.4 of ITA 1961

Capital or revenue receipt — Interest on short-term fixed deposit — Capital work-in-progress — Assessee joint venture formed by public sector undertakings to acquire coal mines overseas — Interest earned on fixed deposit of share capital prior to acquisition of coal mines and amounts returned on abandonment of proposal — Interest earned prior to commencement of business on funds brought in form of share capital for specific purpose — Interest received on fixed deposit part of capital cost and to be treated as capital work-in-progress.

The assessee was a joint-venture company formed by five public sector undertakings, SAIL, CIL, RINL, NMDC and NTPC, for the purpose of ensuring adequate and dependable coal supply for its promoter companies. During the financial year relating to the A. Y. 2012-13, the assessee pursued a proposal to acquire and develop a coal mine overseas and received equity contributions from some of these undertakings. The amounts received

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