Bright Enterprises Pvt. Ltd. v. CIT

381 ITR 107High Court2016#1764 most cited

What is Bright Enterprises Pvt. Ltd. v. CIT authority for?

No disallowance of interest expenditure can be made under Section 36(1)(iii) merely on the presumption of diversion of borrowed funds, if the assessee possesses sufficient interest-free own funds to cover interest-free advances.

64

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2016 to 2026.

Also referred to as

Bright Enterprises Pvt. Ltd. v. CIT · 381 ITR 107 · Section 36(1)(iii) · interest free advances · disallowance of interest · sufficient interest-free funds · presumption of diversion · commercial expediency · business expediency · borrowed funds

Sections most often in play

Section 36(1)(iii)Section 143(3)Section 14ASection 143(2)Section 133(6)Section 142(1)Section 145(2)Section 147

Issues it is cited on

section 36(l)(iii)interest free advancesbusiness expediencysection 36(1)(iii)paper companycommercial expediencyput to usesection 36(1)section 36regular assessmentsection 14asection 28

Judgments citing Bright Enterprises Pvt. Ltd. v. CIT

Sh. Parveen Kumar, Ludhiana vs. ACIT, Ludhiana

In the result, the appeal of the assessee is allowed for

ITA 498/CHANDI/2016[2007-08]Status: DisposedITAT Chandigarh20 Apr 2018AY 2007-08

Bench: Ms.Diva Singh & Ms.Annapurna Guptash.Parveen Kumar Aggarwal, Vs. The A.C.I.T., Prop. M/S M.K.Processing, Circle-1, C-234, Focal Point, Ludhiana. Ludhiana. Pan: Addpa2087K (Appellant) (Respondent)

For Appellant: Shri Pankaj Bhalla, CAFor Respondent: Shri Manjit Singh, Sr.DR

…IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH ‘B’, CHANDIGARH BEFORE MS.DIVA SINGH, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER Sh.Parveen Kumar Aggarwal, Vs. The A.C.I.T., Prop. M/s M.K.Processing, Circle-1, C-234, Focal Point, Ludhiana. Ludhiana. PAN: ADDPA2087K (Appellant) (Respondent) Appellant by : Shri Pankaj Bhalla, CA Respondent by : Shri Manjit Singh, Sr.DR Date of hearing : 24.01.2018 Date of Pronouncement : 20.04.2018 ORDER PER ANNAPURNA GUPTA, A.M.: This appeal has been preferred by the assessee against the order of Ld. Commissioner of Income Tax(Appeals)-I, Ludhiana (herein…

DCIT, Ludhiana vs. M/S Incite Homecare Pvt. Ltd., Ludhiana

In the result, the appeal of the Revenue is dismissed

ITA 896/CHANDI/2017[2011-12]Status: DisposedITAT Chandigarh06 Apr 2018AY 2011-12

Bench: Ms. Diva Singh & Dr. B.R.R.Kumarassessment Year: 2011-12

For Appellant: Dr.Gulshan Raj, CIT-DRFor Respondent: Shri Sudhir Sehgal
Section 36Section 43(1)Section 69

…case of mixed funds as the assessee had also obtained loans, we find in the facts as they stand, nothing turns thereon. For the said purposes, we deem it appropriate to refer to the decision of the Apex Court in the case of Bright Enterprises Pvt. Ltd. V CIT 381 ITR 107 (P&H) wherein considering the principle of law as laid down by the Bombay High Court in the case of CIT Vs Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) the view taken by the Hon'ble Bombay High Court was followed. Thus the legal position that if there are interest free funds available, presumption would be that investment would be mad…

Maruti Suzuki India Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, the appeal of the assessee is allowed in part for statistical purposes

ITA 6021/DEL/2012[2008-09]Status: DisposedITAT Delhi09 Nov 2017AY 2008-09

Bench: Shri N.K. Saini & Shri K.N. Charry

Section 143(3)Section 144CSection 144C(5)Section 14ASection 35DSection 43BSection 92C

…ing reliance on Godrej & Boyce Mfg. Co. Ltd. v. DCIT : 394 ITR 449 (SC), HDFC Bank Ltd v. DCIT: 366 ITR 505 (Bom), HDFC Bank Ltd v. DCIT: 383 ITR 529 (Bom), CIT v. K. Raheja Corporation Pvt. Ltd: ITA No.1260 of 2009 (Bom.), Bright enterprises Pvt Ltd. v. CIT: 381 ITR 107 (P&H), CIT v. Max India Ltd: 388 ITR 81 (P&H), Gurdas Garg v. CIT: ITA No.413 of 2014 (P&H), CIT v. Microlabs Ltd. : 383 ITR 490 (Kar.), Lubi Submersibles Ltd.: ITA No.868 of 2010 (Guj.), CIT v. Gujarat Power Corporation Ltd.: 352 ITR 583 (Guj), Gujarat State Fertilizers and Chemicals Ltd: Tax Appeal No. 82 of 2013 (Guj HC), CIT v. Torrent Power…

Taurian Iron & Steel Co. P.Ltd, Mumbai vs. Addl CIT RG 4(3), Mumbai

In the result, appeal of the assessee is partly allowed, in terms indicated hereinabove

ITA 5920/MUM/2012[2008-09]Status: DisposedITAT Mumbai16 Sept 2016AY 2008-09
For Appellant: Shri K.B.DesaiFor Respondent: Shri N.K.Chand
Section 143(3)Section 250(6)

…money by the latter, the assessee company in any way. The Ld. A.R in support of his aforesaid contention, therein relied on the following Judgments/orders:- (i). CIT Vs. United Breweries (89 ITR 17)(High Court of Mysore) (ii). Bright Enterprises Ltd. Vs. CIT (381 ITR 107)(P&H) (iii). ITO Vs. Sterling Oil Resources (P) Ltd. (67 taxmann.com 2) 28. The Ld. A.R further in order to fortify his contention that re- characterization of a transaction is permissible in only two situations, as under:- (i). Where the economic substance of a transaction differs from its form; and (ii).Where the form and substance of the trans…