CIT vs. Jagatjit Industries Ltd 2011 337 ITR 21 (Delhi)
Delhi High Court observed that manner of utilization was approved by Ministry of Finance. High Court further held that capital raised whether in or outside India can be utilized both for acquiring fixed assets and to meet other expenses of organization i.e. working capital. For determining the nature of receipts due consideration should be given to the source of funds and not to the ultimate use of funds. Entire gain has to be treated as capital receipt as source of fund in this case is capital in future
Delhi High Court observed that manner of utilization was approved by Ministry of Finance. High Court further held that capital raised whether in or outside India can be utilized both for acquiring fixed assets and to meet other expenses of organization i.e. working capital. For determining the nature of receipts due consideration should be given to the source of funds and not to the ultimate use of funds. Entire gain has to be treated as capital receipt as source of fund in this case is capital in future
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