CIT v. Abhishek Industries Ltd.

286 ITR 1High Court2006#212 most cited

What is CIT v. Abhishek Industries Ltd. authority for?

For interest on borrowed capital to be deductible under Section 36(1)(iii), there must be a nexus between the use of the borrowed funds and the purpose of the business. This decision has been overruled by the Supreme Court in Munjal Sales Corporation v. CIT (2008).

359

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2008 to 2026.

Also referred to as

CIT v. Abhishek Industries Ltd. · 286 ITR 1 · Section 36(1)(iii) · interest on borrowed capital · disallowance · commercial expediency · use of borrowed funds for business · nexus of funds · interest-free advances · overruled by Munjal Sales Corporation

Also reported as

156 Taxmann 25756 Taxmann.com 391

Sections most often in play

Section 143(3)Section 36(1)(iii)Section 14ASection 37(1)Section 133(6)Section 147Section 132(4)Section 69A

Issues it is cited on

interest free advancessection 36(1)(iii)put to usecommercial expediencysection 36(1)book profitssection 36disallowance u/s 14adisallowance under section 14arevenue expendituresection 14acapital expenditure

Judgments citing CIT v. Abhishek Industries Ltd.

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd, Kota

56. As a result, as regards the issue of allowance/disallowance of

ITA 1098/JPR/2024[2015-16]Status: DisposedITAT Jaipur27 Aug 2025AY 2015-16
Section 14ASection 36(1)Section 36(1)(iii)

…has failed to prove any commercial expediency for utilizing interest-bearing borrowed funds for making investment in Units of Mutual Funds) as well as in view of the decision of Hon'ble Punjab & Haryana High Court in the case of M/s Abhishek Industries Ltd. (286 ITR 1) (since the funds borrowed from various sources, internal accruals and assessee's own funds form part of a common kitty from where the assessee has utilized funds partly for business purposes and partly for non-business purposes i.e. for making investment in units of mutual funds without any commercial expediency. However, no such disallowance is b…

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd., Kota

ITA 1097/JPR/2024[2011-12]Status: DisposedITAT Jaipur27 Aug 2025AY 2011-12

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

…has failed to prove any commercial expediency for utilizing interest-bearing borrowed funds for making investment in Units of Mutual Funds) as well as in view of the decision of Hon'ble Punjab & Haryana High Court in the case of M/s Abhishek Industries Ltd. (286 ITR 1) (since the funds borrowed from various sources, internal accruals and assessee's own funds form part of a common kitty from where the assessee has utilized funds partly for business purposes and partly for non-business purposes i.e. for making investment in units of mutual funds without any commercial expediency. However, no such disallowance is b…

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd, Kota

ITA 1091/JPR/2024[2017-18]Status: DisposedITAT Jaipur27 Aug 2025AY 2017-18

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

…has failed to prove any commercial expediency for utilizing interest-bearing borrowed funds for making investment in Units of Mutual Funds) as well as in view of the decision of Hon'ble Punjab & Haryana High Court in the case of M/s Abhishek Industries Ltd. (286 ITR 1) (since the funds borrowed from various sources, internal accruals and assessee's own funds form part of a common kitty from where the assessee has utilized funds partly for business purposes and partly for non-business purposes i.e. for making investment in units of mutual funds without any commercial expediency. However, no such disallowance is b…

Assistant Commissioner of Income Tax, Circle-2, Kota vs. Chambal Fertilizers and Chemicals Ltd, Kota

ITA 1090/JPR/2024[2010-11]Status: DisposedITAT Jaipur27 Aug 2025AY 2010-11

Bench: SHRI GAGAN GOYAL (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Shri P.J. Pardiwala, AdvFor Respondent: Shri Rajesh Ojha, CIT &
Section 14ASection 36(1)Section 36(1)(iii)

…has failed to prove any commercial expediency for utilizing interest-bearing borrowed funds for making investment in Units of Mutual Funds) as well as in view of the decision of Hon'ble Punjab & Haryana High Court in the case of M/s Abhishek Industries Ltd. (286 ITR 1) (since the funds borrowed from various sources, internal accruals and assessee's own funds form part of a common kitty from where the assessee has utilized funds partly for business purposes and partly for non-business purposes i.e. for making investment in units of mutual funds without any commercial expediency. However, no such disallowance is b…

The Dy.CIT, Central Circle-1, Vadodara vs. Pawan Edifice Pvt. Ltd., Vadodara

Appeals are partly allowed for

ITA 529/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad20 Aug 2025AY 2013-14
For Appellant: Ms. Amrin Pathan, ARFor Respondent: Shri Ashok Kumar Suthar, Sr. DR
Section 115JSection 139(1)Section 143(2)Section 143(3)Section 14ASection 36Section 68Section 80G

…to claim commercial expediency is absent here, and the presumption of diversion of interest-bearing funds for non-business purposes remains unrebutted. 43. It is well settled by the Hon'ble Punjab & Haryana High Court in CIT v. Abhishek Industries Ltd. [2006] 286 ITR 1 (P&H) that once it is demonstrated that the assessee has incurred interest expenditure on borrowed funds and has, during the same period, advanced funds interest- free to other parties without establishing business necessity, a presumption arises that such advances have been made out of borrowed funds. This presumption can be rebutted only by cogen…

Pawan Edifice Pvt. Ltd., Vadodara vs. The Dy.CIT, Circle-2(1)(2), Vadodara

ITA 477/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad20 Aug 2025AY 2013-14
For Appellant: Ms. Amrin Pathan, ARFor Respondent: Shri Ashok Kumar Suthar, Sr. DR
Section 115JSection 139(1)Section 143(2)Section 143(3)Section 14ASection 36Section 68Section 80G

…to claim commercial expediency is absent here, and the presumption of diversion of interest-bearing funds for non-business purposes remains unrebutted. 43. It is well settled by the Hon'ble Punjab & Haryana High Court in CIT v. Abhishek Industries Ltd. [2006] 286 ITR 1 (P&H) that once it is demonstrated that the assessee has incurred interest expenditure on borrowed funds and has, during the same period, advanced funds interest- free to other parties without establishing business necessity, a presumption arises that such advances have been made out of borrowed funds. This presumption can be rebutted only by cogen…

DCIT, Circle- 5(2), New Delhi vs. Carlsberg India Pvt. Ltd., New Delhi

In the result, the appeal filed by the assessee is allowed and appeal filed by the Revenue stands dismissed

ITA 3190/DEL/2019[2010-11]Status: DisposedITAT Delhi31 Jul 2025AY 2010-11

Bench: Shri Prakash Chand Yadav & Shri Manish Agarwalcarlsberg India Private Limited, Dy. Cit, 4Th Floor, Rectangle No.1, Circle-5(2), Commercial Complex,D-4, Saket, Vs. New Delhi. New Delhi-110017. Pan-Aajcs8454J (Appellant) (Respondent) (Assessment Year 2010-11 Dy. Cit, Carlsberg India Private Circle-5(2), Limited, New Delhi. Vs. 4Th Floor, Rectangle No.1, Commercial Complex, D-4, Saket, New Delhi-110017. Pan-Aajcs8454J (Appellant) (Respondent) Assessee By Shri S.K. Aggarwal, Ca & Shri Paras Sharma, Ar & Ms. Ruchika Mittal, Ca Department By Shri S.K. Jadhav, Cit-Dr Date Of Hearing 28/07/2025 Date Of Pronouncement 31/07/2025 Order

Section 143(1)Section 14ASection 36(1)(iii)

…ositon of law that the no proportionate disallowance u/s 36(1)(iii) can be made. 10. Ld. DR relied upon the orders of authorities below and relied upon the judgment of Hon’ble Punjab & Haryana High Court in the case of CIT vs. Abhishek Industries Ltd. [2006] (286 ITR 1) (P&H). 11. In rejoinder, the Ld. Counsel for the assessee pointed out that the judgment of Abhishek Industries (supra) has been overruled by Hon’ble Supreme Court in the case of MunjalSales Corporation vs. CIT [2008] (168 taxman.com 43). Carlsberg India Pvt. Ltd. vs. DCIT :-Finding of the Bench:- 12. We have heard the rival submissions and peruse…

Carlsberg India Pvt. Ltd., New Delhi vs. DCIT, Circle- 5(2), New Delhi

In the result, the appeal filed by the assessee is allowed and appeal filed by the Revenue stands dismissed

ITA 3150/DEL/2019[2010-11]Status: DisposedITAT Delhi31 Jul 2025AY 2010-11

Bench: Shri Prakash Chand Yadav & Shri Manish Agarwalcarlsberg India Private Limited, Dy. Cit, 4Th Floor, Rectangle No.1, Circle-5(2), Commercial Complex,D-4, Saket, Vs. New Delhi. New Delhi-110017. Pan-Aajcs8454J (Appellant) (Respondent) (Assessment Year 2010-11 Dy. Cit, Carlsberg India Private Circle-5(2), Limited, New Delhi. Vs. 4Th Floor, Rectangle No.1, Commercial Complex, D-4, Saket, New Delhi-110017. Pan-Aajcs8454J (Appellant) (Respondent) Assessee By Shri S.K. Aggarwal, Ca & Shri Paras Sharma, Ar & Ms. Ruchika Mittal, Ca Department By Shri S.K. Jadhav, Cit-Dr Date Of Hearing 28/07/2025 Date Of Pronouncement 31/07/2025 Order

Section 143(1)Section 14ASection 36(1)(iii)

…ositon of law that the no proportionate disallowance u/s 36(1)(iii) can be made. 10. Ld. DR relied upon the orders of authorities below and relied upon the judgment of Hon’ble Punjab & Haryana High Court in the case of CIT vs. Abhishek Industries Ltd. [2006] (286 ITR 1) (P&H). 11. In rejoinder, the Ld. Counsel for the assessee pointed out that the judgment of Abhishek Industries (supra) has been overruled by Hon’ble Supreme Court in the case of MunjalSales Corporation vs. CIT [2008] (168 taxman.com 43). Carlsberg India Pvt. Ltd. vs. DCIT :-Finding of the Bench:- 12. We have heard the rival submissions and peruse…

DCIT, C-1(1), Chandigarh vs. M/S Rana Polycot Ltd., Chandigarh

In the result, all the appeals are dismissed

ITA 1050/CHANDI/2018[2009-10]Status: DisposedITAT Chandigarh23 Jul 2025AY 2009-10

Bench: Shri Rajpal Yadav & Shri Manoj Kumar Aggarwalआयकर अपील सं./ Ita No. 1050/Chd/2018 &

For Appellant: Shri Parikshit Aggarwal, CA and Ms. Shruti Khandelwal, AdvocateFor Respondent: Shri Sarabjeet Singh, CIT, DR
Section 36(1)(iii)

…ssee has during the course of the assessment proceedings, has not given any reason as to why the funds has been transferred to these two sister concerns. Referring to the judgment of Hon'ble Punjab & Haryana High Court in the case of M/s Abhishek Industries (286 ITR 1), the AO has made the addition as under:- "As per the copy of account of M/s Camelot Exports Pvt. Ltd. the sister concern of the assessee, the closing balance is a debit balance amounting to Rs. 19,10,00,000/'-. In view of the above discussion, the disallowance of interest @12% is being worked out." 5.1 In response to the appeal filed by the appel…

DCIT, C-1(1), Chandigarh vs. M/S Rana Polycot Ltd., Chandigarh

In the result, all the appeals are dismissed

ITA 1015/CHANDI/2018[2012-13]Status: DisposedITAT Chandigarh23 Jul 2025AY 2012-13

Bench: Shri Rajpal Yadav & Shri Manoj Kumar Aggarwalआयकर अपील सं./ Ita No. 1050/Chd/2018 &

For Appellant: Shri Parikshit Aggarwal, CA and Ms. Shruti Khandelwal, AdvocateFor Respondent: Shri Sarabjeet Singh, CIT, DR
Section 36(1)(iii)

…ssee has during the course of the assessment proceedings, has not given any reason as to why the funds has been transferred to these two sister concerns. Referring to the judgment of Hon'ble Punjab & Haryana High Court in the case of M/s Abhishek Industries (286 ITR 1), the AO has made the addition as under:- "As per the copy of account of M/s Camelot Exports Pvt. Ltd. the sister concern of the assessee, the closing balance is a debit balance amounting to Rs. 19,10,00,000/'-. In view of the above discussion, the disallowance of interest @12% is being worked out." 5.1 In response to the appeal filed by the appel…

DCIT, C-1(1), Chandigarh vs. M/S Rana Polycot Ltd., Chandigarh

In the result, all the appeals are dismissed

ITA 1014/CHANDI/2018[2011-12]Status: DisposedITAT Chandigarh23 Jul 2025AY 2011-12

Bench: Shri Rajpal Yadav & Shri Manoj Kumar Aggarwalआयकर अपील सं./ Ita No. 1050/Chd/2018 &

For Appellant: Shri Parikshit Aggarwal, CA and Ms. Shruti Khandelwal, AdvocateFor Respondent: Shri Sarabjeet Singh, CIT, DR
Section 36(1)(iii)

…ssee has during the course of the assessment proceedings, has not given any reason as to why the funds has been transferred to these two sister concerns. Referring to the judgment of Hon'ble Punjab & Haryana High Court in the case of M/s Abhishek Industries (286 ITR 1), the AO has made the addition as under:- "As per the copy of account of M/s Camelot Exports Pvt. Ltd. the sister concern of the assessee, the closing balance is a debit balance amounting to Rs. 19,10,00,000/'-. In view of the above discussion, the disallowance of interest @12% is being worked out." 5.1 In response to the appeal filed by the appel…

DCIT, C-1(1), Chandigarh vs. M/S Rana Polycot Ltd., Chandigarh

In the result, all the appeals are dismissed

ITA 1013/CHANDI/2018[2010-11]Status: DisposedITAT Chandigarh23 Jul 2025AY 2010-11

Bench: Shri Rajpal Yadav & Shri Manoj Kumar Aggarwalआयकर अपील सं./ Ita No. 1050/Chd/2018 &

For Appellant: Shri Parikshit Aggarwal, CA and Ms. Shruti Khandelwal, AdvocateFor Respondent: Shri Sarabjeet Singh, CIT, DR
Section 36(1)(iii)

…ssee has during the course of the assessment proceedings, has not given any reason as to why the funds has been transferred to these two sister concerns. Referring to the judgment of Hon'ble Punjab & Haryana High Court in the case of M/s Abhishek Industries (286 ITR 1), the AO has made the addition as under:- "As per the copy of account of M/s Camelot Exports Pvt. Ltd. the sister concern of the assessee, the closing balance is a debit balance amounting to Rs. 19,10,00,000/'-. In view of the above discussion, the disallowance of interest @12% is being worked out." 5.1 In response to the appeal filed by the appel…

E-Ally Securities (India) Pvt. Ltd., Raigad vs. DCIT Circle, Panvel

In the result, the appeal filed by the assessee is allowed

ITA 109/PUN/2025[2018-19]Status: DisposedITAT Pune26 May 2025AY 2018-19

Bench: Shri R. K. Panda & Shri Vinay Bhamoreassessment Year : 2018-19

For Appellant: Shri Samir ShahFor Respondent: Shri Shashank Ojha - JCIT
Section 143(2)Section 14A

…f Punjab and Haryana High Court in case of CIT v Winsome Textile Industries Ltd. [2009] 319 ITR 204 in which also the Court had observed as under : "7. We do not find any merit in this submission. The judgement of this court in Abhishek Industries Ltd. (2006) 286 ITR 1 was on the issue of allowability of interest paid on loans given to sister concerns, without interest. It was held that deduction for interest was permissible when loan was taken for business purpose and not for diverting the same to sister concern without having nexus with the business. The observations made therein have to be read in that context…

M/S Modgill International Clothing Limited, Ludhiana vs. ACIT, Ludhiana

The appeal stands partly allowed

ITA 425/CHANDI/2016[2006-07]Status: DisposedITAT Chandigarh21 Apr 2025AY 2006-07

Bench: SHRI RAJPAL YADAV (Vice President), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)

For Appellant: Sh. Rishab Singla (Adv.). – Ld. ARFor Respondent: Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr.DR
Section 133ASection 142Section 143(3)Section 36(1)(iii)Section 40Section 40A(3)Section 69C

…1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.425/CHANDI/2016 (िनधा"रणवष" / Assessment Year: 2006-07) M/s Mdgill International Clothing Ltd. ACIT, Circle III, बनाम/ Modgill House, Guru Vihar Ludhiana. Vs. Rahon Road, Ludhiana. "थायीलेखासं./जीआइआरसं./PAN/GIR No. AADCM-6602-N (अपीलाथ"/Appellant) (""थ" / Respondent) : अपीलाथ"कीओरसे/ Appellant by : Sh. Rishab Singla (Adv.). – Ld. AR ""थ"कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr.DR सुनवाईकीतारीख/Date of Hearing : 27-03-2025 घ…

ACIT, Chandigarh vs. Sh. Rakesh Kumar, Chandigarh

Appeal stand dismissed

ITA 627/CHANDI/2015[2009-10]Status: DisposedITAT Chandigarh21 Apr 2025AY 2009-10

Bench: SHRI RAJPAL YADAV (Vice President), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)

For Appellant: Sh. Ajay Jain (CA) – Ld. ARFor Respondent: Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR
Section 143(3)Section 194ASection 194A(1)Section 194CSection 36(1)(iii)Section 40Section 44A

…s were advanced out of own funds only. In the light of these facts, in our opinion, no interest disallowance is warranted in the case of the assessee. Therefore, we direct Ld. AO not to make any interest disallowance. The case law of Abhishek Industries Ltd. (286 ITR 1) as quoted be revenue in its grounds of appeal has been considered by Hon’ble Apex Court in the case of Hero Cycles Pvt. Ltd. (379 ITR 347). This decision has taken a view favoring the assessee. Accordingly, the corresponding grounds of revenue’s appeal stand dismissed. The grounds raised in the assessee’s cross-objections stand allowed. 6. stand d…

M/S Shakti Spinners Ltd., Ludhiana vs. ACIT, Circle-7, Ludhiana

In the result, Assessee’s appeal is allowed

ITA 599/CHANDI/2022[2010-11]Status: DisposedITAT Chandigarh11 Apr 2025AY 2010-11

Bench: the appeal is finally heard or disposed off.

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr. DR
Section 143(3)Section 36Section 36(1)

…us that in the present case, there was no such interest free advances, rather the amount have been utilized for the business purposes. Further it was submitted that the reliance has been placed by the Id. CIT(A) in the case of Abhishek Industries reported in 286 ITR 1 is misplaced, since that judgment was later on, over ruled in the case of 'Bright Enterprises' as cited above, and, thus, it was stated that under such circumstances, addition as sustained by the Ld. CIT(A) was not appropriate. 12. The Ld. DR relied upon the order of the Ld. AO and Ld. CIT(A) and also stated that onus was on the assessee to dischar…

Deputy Commissioner of Income Tax 13(1)(2), Mumbai vs. Olive Bar & Kitchen Private Limited, Mumbai

In the result, the appeal of the revenue is dismissed and the appeal of the assessee is allowed for statistical purposes

ITA 6255/MUM/2024[2017-18]Status: DisposedITAT Mumbai22 Jan 2025AY 2017-18

Bench: Shri Amit Shukla & Smt. Renu Jauhriolive Bar & Kitchen Pvt. V/S. Acit, Circle-13(1)(1), बनाम Ltd. Mumbai 14 Union Park, Palli Hill Maharashtra-400020 Tourist Hotel Pvt. Ltd, Palli Hill Road, Khar West, Mumbai-400052 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaaco5346G Appellant/अपीलार्थी .. Respondent/प्रतिवादी Dcit, Circle-13(1)(2), V/S. Olive Bar & Kitchen Pvt. Mumbai बनाम Ltd. R. No. 218, Aayakar 14 Union Park, Palli Hill Bhavan, M K Road, Tourist Hotel Pvt. Ltd, Mumbai, Palli Hill Road, Khar West, Maharashtra-400020 Mumbai-400052 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaaco5346G Appellant/अपीलार्थी Respondent/प्रतिवादी ..

For Appellant: Shri Mahesh RajoraFor Respondent: Shri Mahesh Pmnani
Section 250Section 35D(1)(ii)Section 36(1)(iii)Section 36(1)(lit)Section 37(1)

…es of the case and in law, the CIT(A) erred in deleting the disallowance made u/s. 36(1)(iii) towards interest of Rs. 1,37,07,281/- paid on loans without appreciating the ratio laid down by the Punjab and Haryana High Court in case of Abhishek Industries Ltd. 286 ITR 1 that instead of applying the theory of direct nexus of the funds between borrowings of the funds and diversion thereof for non-business purposes, there should be nexus of use of borrowed funds for the purpose of business to claim deduction under section 36(1)(lit) of the Income Tax Act, 1961. 5. The appellant prays that the order of the CIT(A) on t…

Olive Bar and Kitchen Private Limited, Mumbai vs. Assistant Commissioner of Income Tax, Circle - 13(1)(1), Mumbai

In the result, the appeal of the revenue is dismissed and the appeal of the assessee is allowed for statistical purposes

ITA 5924/MUM/2024[2017-18]Status: DisposedITAT Mumbai22 Jan 2025AY 2017-18

Bench: Shri Amit Shukla & Smt. Renu Jauhriolive Bar & Kitchen Pvt. V/S. Acit, Circle-13(1)(1), बनाम Ltd. Mumbai 14 Union Park, Palli Hill Maharashtra-400020 Tourist Hotel Pvt. Ltd, Palli Hill Road, Khar West, Mumbai-400052 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaaco5346G Appellant/अपीलार्थी .. Respondent/प्रतिवादी Dcit, Circle-13(1)(2), V/S. Olive Bar & Kitchen Pvt. Mumbai बनाम Ltd. R. No. 218, Aayakar 14 Union Park, Palli Hill Bhavan, M K Road, Tourist Hotel Pvt. Ltd, Mumbai, Palli Hill Road, Khar West, Maharashtra-400020 Mumbai-400052 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaaco5346G Appellant/अपीलार्थी Respondent/प्रतिवादी ..

For Appellant: Shri Mahesh RajoraFor Respondent: Shri Mahesh Pmnani
Section 250Section 35D(1)(ii)Section 36(1)(iii)Section 36(1)(lit)Section 37(1)

…es of the case and in law, the CIT(A) erred in deleting the disallowance made u/s. 36(1)(iii) towards interest of Rs. 1,37,07,281/- paid on loans without appreciating the ratio laid down by the Punjab and Haryana High Court in case of Abhishek Industries Ltd. 286 ITR 1 that instead of applying the theory of direct nexus of the funds between borrowings of the funds and diversion thereof for non-business purposes, there should be nexus of use of borrowed funds for the purpose of business to claim deduction under section 36(1)(lit) of the Income Tax Act, 1961. 5. The appellant prays that the order of the CIT(A) on t…

Rahul Berry, Ludhiana vs. ACIT, Ludhiana

In the result, the appeal of the assessee is allowed

ITA 451/CHANDI/2016[2008-09]Status: DisposedITAT Chandigarh17 Dec 2024AY 2008-09

Bench: Shri Vikram Singh Yadav & Shri Paresh M. Joshiआयकरअपीलसं./Ita No.451/Chd/2016 "नधा"रणवष" / Assessment Year :2008-09 Rahul Berry, Vs. The Acit, Prop. Berry Cotton Industries, बनाम Circle Ii, B-Xiii-1661,Karimpaura Ludhiana Chowk, Ludhiana "थायीलेखासं./Pan No:Abkpb0070A अपीलाथ"/Appellant ""यथ"/Respondent "नधा"रतीक"ओरसे/Assessee By : Sh. S.K Mukhi, Advocate राज"वक"ओरसे/ Revenue By : Dr.Ranjit Kaur, Addl Cit, Sr. Dr सुनवाईक"तार"ख/Date Of Hearing : 01.10.2024 उदघोषणाक"तार"ख/Date Of Pronouncement : 17.12.2024 आदेश/Order Per Vikram Singh Yadav, A.M.:

For Appellant: Sh. S.K Mukhi, AdvocateFor Respondent: Dr.Ranjit Kaur, Addl CIT, Sr. DR
Section 36(1)(iii)

…-. On one hand the Assessee is paying interest and on the other hand, huge advances are being made to sister concern without any business purpose and thereafter relying on the judgement of Hon'ble Punjab & Haryana High Court in the case of Abhishek Industries 286 ITR 1, the A.O. made an addition/disallowance of proportionate interest at the rate of 15% and an amount of Rs. 6,36,947/- was brought to tax in the hands of the Assessee. 5. Being aggrieved, the Assessee carried the matter in appeal before the ld. CIT(A). The submissions made before the Assessing Officer were reiterated, copy of the accounts of the sis…

Vardhman Textiles Limited, Ludhiana vs. ACIT-Circle-1, Ludhiana

In the result, appeals of the Assessee are partly allowed whereas the Cross appeals of the Revenue are dismissed

ITA 61/CHANDI/2020[2015-16]Status: DisposedITAT Chandigarh14 Oct 2024AY 2015-16

Bench: SHRI. AAKASH DEEP JAIN (Vice President), SHRI. SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Tejmohan Singh, Advocate and Shri Pankaj Gupta, AdvocateFor Respondent: Smt. Kusum Bansal, CIT, DR
Section 80I

…Subsidy under the Madhya Pradesh Industrial Promotion Assistance Scheme, 2004 as capital receipt without comparing the case with the analysis of the Punjab Government scheme, has made by Hon’ble Punjab & Haryana High Court in case of “Abhishek Industries Ltd. 286 ITR 1. 21.1 This issue has been decided in favour of the assessee by the Tribunal in the assessee’s own case for A.Y 2013-14 and 2014-15, holding the subsidy to be a capital receipt. The Department again states that it is before the Hon’ble High Court. However, no stay is in operation against the Tribunal order. The fact that the year under consideration…