JUDGMENT :

Sandeep Mehta, J.

These three appeals, namely, ITA No.15/2022, ITA No.13/2022 and ITA No.16/2022, filed under Section 260A of the Income Tax Act, 1961 preferred by the Revenue/Income Tax Department, involve identical question of facts and law and hence, the same are being heard together and decided by this common judgment and order.

2. These appeals are directed against the order passed by the Income Tax Appellate Tribunal (in short, ITAT), Guwahati Bench, Guwahati in separate appeals as per the schedule below:

3. The common issue involved in all these three appeals is whether the interest earned by the assessee from borrowed funds (short-term/temporary deposits) can be capitalized or not.

In other words, whether these amounts of interest would be liable to be taxed or would be exempted income.

4. Mr. S.C. Keyal, learned Senior Standing Counsel, Income Tax Department has proposed the following questions of law seeking admission of these appeals:-

“a. Whether the Ld. Tribunal is correct in law and facts and circumstances of the case in concluding that the interest income earned from the short term deposits in banks from unutilized capital subsidy be treated as capital receipt and not to be treated as income from other sources?

b. Whether the Ld. Tribunal is correct in law and on facts holding that the interest earned from short term deposits of unutilized borrowed funds was a capital?

c. Whether the Ld. Tribunal is correct in law in holding that letter/clarification from the Ministry of Chemicals & Fertilizers i.e. (MoCF), Government of India can override the provisions of the Income Tax Act, 1961 with regards to treatment of interest from short term deposits in banks?”

5. In support of his contentions Mr. Keyal has placed reliance on the following judgments of the Hon’ble Supreme Court

1. Commissioner of Income Tax, Trivandrum Vs. Autokast Limited, (2002) 9 SCC 607.

2. Bongaigaon Refinary and Petrochemicals Limited Vs. Commissioner of Income Tax, Assam, reported in (2001) 10 SCC 289.

3. Commissioner of Income Tax, Bihar II, Patna Vs. Bokaro Steel Ltd., Bokaro, (1999) 1 SCC 645.

4. The Principal Commissioner of Income Tax Vs. M/s. Bajaj Herbals Pvt. Ltd., reported in 2022 0 Supreme (SC)307.

6. Dr. A. Saraf, learned Senior counsel assisted by Mr. P. Baruah and Mr. S. Mitra, learned counsel for the respondents urged that no substantial question of law is involved in these appeals and hence the same do not merit admission. It was submitted that the issue regarding the interest on short term deposits made by the Company from the surplus funds during its formative years being exempted from tax is no longer resintegra and has been put to rest beyond the pale of doubt by the Hon’ble Supreme Court in the case of Commissioner of Income Tax, Bihar II, Patna Vs. Bokaro Steel Limited, Bokaro, (1999) 1 SCC 645. It was further contended that the ITAT, whilst rejecting the appeals of the Revenue observed that the same view was taken in the case of assessee for the accounting years of 2009-2010, 2010-2011 and the said judgment of the Tribunal not having been challenged any further has attained finality.

7. Dr. Saraf submitted that the assessee is a public sector enterprise working under the Ministry of Chemicals & Fertilizers (hereinafter referred to as MoCF) and was promoted to undertake the Assam Gas Cracker Project approved by the Cabinet Committee of Economic Affairs for setting up an Integrated Petro-Chemical Complex at Le