Interest Earned on Government-Granted Funds Kept in Bank Until Utilization Is Considered Capital Receipt: Kerala High Court

In a significant ruling, the Kerala High Court has held that the interest income derived from short-term deposits of funds provided by the Government for business establishment purposes qualifies as a capital receipt rather than a revenue receipt. This decision was made by a Division Bench comprising Justice Sathish Ninan and Justice Johnson John. Case Background: HLL Biotech Limited, a wholly-owned subsidiary of HLL Life Care Ltd., was established by…