DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD vs. PRAGATI GREEN MEADOWS & RESORTS LIMITED, HYDERABAD

ITA 1795/HYD/2017Status: DisposedITAT Hyderabad26 November 2025AY 2009-10Bench: SHRI G. MANJUNATHA, HONBLE (Accountant Member), SHRI RAVISH SOOD, HONBLE (Judicial Member)11 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found a commercial expediency and business nexus, as the sister concern purchased land that was then developed by the assessee, generating revenue. Thus, the interest disallowance under Section 36(1)(iii) was not warranted, and the Revenue's appeal was dismissed. The assessee's cross-objection was also dismissed due to an unexplained delay of 2915 days.

What were the facts?

The assessee company, Pragathi Green Meadows & Resorts Ltd, borrowed funds for its project but advanced them interest-free to a sister concern, Pragati Kamadhenu Finance Pvt. Ltd, for land purchase. The Assessing Officer disallowed interest on these advances under Section 36(1)(iii), arguing diversion for non-business purposes. The CIT(A) deleted the disallowance, finding commercial expediency. The Revenue appealed this deletion, while the assessee filed a cross-objection against the Section 147 re-opening, which was significantly delayed.

What were the issues?

1. Whether interest on borrowed funds advanced interest-free to a sister concern for business purposes is allowable under Section 36(1)(iii) when commercial expediency is established. 2. Whether a cross-objection with an unexplained delay of 2915 days is maintainable.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 36(1)(iii)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Heard together (2 matters)

I.T.A.No.1795/Hyd/2017
C.O. No.31/Hyd/2025

Read from the judgment's own cause title. This page is filed under one of them.

आयर अपीलीय न्यायाधिकरण में, हैदराबाद ‘बी’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad श्री मंजूनाथ जी, माननीय लेखा सदस्य एवं श्री रवीश सूद, माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER आयकरअपीलसं./I.T.A.No.1795/Hyd/2017 (निर्धारण वर्ा/ Assessment Year:2009-10) The Deputy Commissioner of Vs. Pragathi Green Meadows & Income Tax, Resorts Limited, Circle-16(2), Hyderabad. Hyderabad. PAN : AACCP5283H (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) C.O. No.31/Hyd/2025 (In आयकरअपीलसं./I.T.A.No.1795/Hyd/2017) (निर्धारण वर्ा/ Assessment Year:2009-10) Pragathi Green Meadows & Vs. The Deputy Commissioner of Resorts Limited, Income Tax, Hyderabad. Circle-16(2), Hyderabad. PAN : AACCP5283H (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent)

करदाता का प्रतततितित्व/ : Shri P. Murali Mohan Rao, Assessee Represented by CA. राजस्व का प्रतततितित्व/ : Dr. Sachin Kumar, Sr. A.R. Department Represented by सुिवाई समाप्त होिे की ततति/ : 18.11.2025 Date of Conclusion of Hearing घोर्णध की तधरीख/ : 26.11.2025 Date of Pronouncement

2 M/s. Pragathi Green Meadows & Resorts Limited. ITA No. 1795/Hyd/2017 and

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →