DCIT CIR 7(1), MUMBAI vs. INDIABULLS RETAIL SERVICE LTD, MUMBAI

ITA 1165/MUM/2014Status: DisposedITAT Mumbai30 June 2016AY 2008-0929 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that there was a direct nexus between the borrowed funds and the interest income earned from lending. Therefore, the interest paid on borrowings is an admissible deduction against the interest income.

What were the facts?

The assessee claimed deduction for interest expenses incurred on borrowed funds, arguing a direct nexus between these funds and interest-bearing loans advanced to other companies. The Assessing Officer disallowed this deduction, stating the borrowed funds were for the assessee's projects and not directly linked to earning interest income.

What were the issues?

Whether interest paid on borrowed funds is deductible under Section 57(iii) when such funds were lent to other companies, and there is a direct nexus between the borrowing and lending activities.

Which sections of the Income-tax Act were involved?

Section 57(iii),Section 56

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Cases cited in this judgment(14)Show list

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Heard together (3 matters)

I.T.A. No.1165/Mum/2014
I.T.A. No.5732/Mum/2014
I.T.A. No.6081/Mum/2014

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

आयकर अपीऱीय अधिकरण, म ुंबई न्यायपीठ “आई” म ुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJESH KUMAR, AM आयकर अपीऱ सं./I.T.A. No.1165/Mum/2014 (ननधधारण वषा / Assessment Year : 2008-09)

Dy.Commissioner of Income बनधम/ M/s Indiabulls Retail Service Ltd, Tax-7(1), Room No.622, (Formerly knows as Pyramid Vs.

Aayakar Bhavan, Retails Ltd, Now known as M K Road, M/s Store One Retails India Mumbai-400020 (Ltd),11th floor, Indiabulls Finance Centre, Elibhinstone road (W), Mumbai-400013 स्थधयी ऱेखध सं./ PAN : AADCP5164C आयकर अपीऱ सं./I.T.A. No.5732/Mum/2014 (ननधधारण वषा / Assessment Year : 2010-11) बनधम/ M/s Indiabulls Wholesale Dy.Commissioner of Income Tax- 3(2), M-62 and 63, 1st floor, M K Road, Connaught Place, Mumbai-400020 New Delhi-110001 आयकर अपीऱ सं./I.T.A. No.6081/Mum/2014 (ननधधारण वषा / Assessment Year : 2010-11)

Dy.Commissioner of Income बनधम/ M/s Indiabulls Wholesale Tax-3(2), Tower No.1, plot No.612-613, Mumbai-400020 Elibhinstone road (W), Mumbai-400013 स्थधयी ऱेखध सं./ PAN :

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