CIT v. Bombay Samachar Ltd.

74 ITR 723High Court1969#2259 most cited

What is CIT v. Bombay Samachar Ltd. authority for?

When an assessee has mixed funds from both own sources and borrowings in a cash credit account, the debit balance is presumed to have been met from the company's own funds. This principle is applied to assess the allowability of interest deduction under Section 36(1)(iii) for capital borrowed for business purposes.

51

judgments rely on this decision, according to BharatTax’s citation analysis of 366,418 Indian tax judgments — from 2010 to 2025.

Also referred to as

CIT v. Bombay Samachar Ltd. · 74 ITR 723 · Section 36(1)(iii) · interest deduction · borrowed capital · own funds · mixed funds · cash credit account · presumption of funds · diversion of funds

Sections most often in play

Section 143(3)Section 143(3A)Section 143(3B)Section 246ASection 250Section 253Section 36(1)(iii)Section 801A(iv)

Issues it is cited on

section 80lasection 86section 80ib(4)section 80lsection 10(2)(xv)section 80ia(4)(i)section 167bsection 167section 10(2)legal expensessection 199clarificatory amendment

Judgments citing CIT v. Bombay Samachar Ltd.

The Commissioner of Income Tax vs. Gopal Dass Estates & Housing Pvt.Ltd

Appeals of the Revenue are dismissed

ITA - 400 / 2009HC Delhi20 Mar 2019
Section 260

…CIT v. Lokhandwala Constructions Industries Ltd. (2003) 260 ITR 579 (Bom) was rightly relied upon by the ITAT to allow the plea of the Assessee and treat the said interest payments as revenue expenditure. As explained in CIT v. Bombay Samachar Ltd. (1969) 74 ITR 723 (Bom) and this Court in Regal Theatre v. CIT (1997) 225 ITR 205 (Del) and CIT v. Gautam Motors (2011) 334 ITR 326 (Del) merely because the Assessee was a cash rich company, the payment of interest cannot be disallowed as business expenditure. 71. Further as rightly pointed out, AS 2 would apply in terms of which, with 2019:DHC:1677-DB…

Commissioner of Income Tax vs. Gopal Dass Estates & Housing Pvt.Ltd

Appeals of the Revenue are dismissed

ITA - 581 / 2010HC Delhi20 Mar 2019
Section 260

…CIT v. Lokhandwala Constructions Industries Ltd. (2003) 260 ITR 579 (Bom) was rightly relied upon by the ITAT to allow the plea of the Assessee and treat the said interest payments as revenue expenditure. As explained in CIT v. Bombay Samachar Ltd. (1969) 74 ITR 723 (Bom) and this Court in Regal Theatre v. CIT (1997) 225 ITR 205 (Del) and CIT v. Gautam Motors (2011) 334 ITR 326 (Del) merely because the Assessee was a cash rich company, the payment of interest cannot be disallowed as business expenditure. 71. Further as rightly pointed out, AS 2 would apply in terms of which, with 2019:DHC:1680-DB…

Income-Tax Officer vs. M/S. Bharat Glass Tube Ltd

In the result, the appeal of the Revenue is dismissed

ITA 1816/PUN/2016[2012-13]Status: DisposedITAT Pune18 Jul 2018AY 2012-13

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm आयकर अपील सं आयकर अपील सं. / Ita No. 1816/Pun/2016 आयकर अपील सं आयकर अपील सं िनधा"रण वष" िनधा"रण वष" / Assessment Year : 2012-13 िनधा"रण वष" िनधा"रण वष"

For Appellant: Shri Pramod ShingteFor Respondent: Dr. Vivek Aggarwal

…est disallowance is to be made only if the AO is able to establish nexus between the funds with interest to the amounts advanced free of interest. This view also gets support from the judgment of the Hon'ble Bombay High Court in CIT Vs. Bombay Samachar (1969) 74 ITR 723 (Bom.)". 4 M/s. Bharat Glass Tube Ltd. Therefore, it is held that the appellant company had sufficient funds available in the form of share capital and reserves other than the borrowed money for advancing a sum of Rs. 6,09,53,345/-. Thus, it cannot be said that the amount of loan advanced to the sister-concerns is out of the borrowed fund. 5.2.…

Ashar Realators, Mumbai vs. ACIT Cir 23(2), Mumbai

In the result, the appeal of the assessee is hereby ordered to be allowed

ITA 1914/MUM/2014[2009-10]Status: DisposedITAT Mumbai29 May 2018AY 2009-10

Bench: Shri R. C. Sharma, Am & Shri Amarjit Singh, Jm आयकरअपीलसं/I.T.A. No.1914/M/2014 (निर्धारणवर्ा / Assessment Year: 2009-10) M/S. Ashar Realtors बिधम/ Acit, Circle-23(2), 2Nd Ashar It Park, Gr. Floor, Floor, C-10, Bandra Kurla Vs. Road No. 16Z, Wagle Complex, Bandra Mumbai- Industrial Estate, Pokhran 400051. Rd No.2, Thane (W) 400601 स्थायीलेखासं./जीआइआरसं./Pan/Gir No. : Aahfa1708J (अपीलाथी/Appellant) .. (प्रत्यथी /Respondent)

For Appellant: Shri Rahul Hakani (AR)For Respondent: Shri V. Vidyadhar (DR)
Section 142(1)Section 143(1)Section 143(2)Section 36Section 36(1)

…e submitted that having held so, it cannot be said that interest-free advance is out of Interest-bearing funds. He placed reliance ITA. No.1914M/2014 A.Y. 2009-10 upon the decision of the Bombay L3igh Court in the case of CIT Vs. Bombay Samachar Ltd. (1969) 74 ITR 723 (Bom) that the view taken by the AO that the assessee could have decreased the extent of its borrowing by calculating its outstanding and, therefore, would not be entitled to claim interest paid by it on borrowed capital is not capable of being sustained and further in view that the assessee had diverted the capital borrowed by it for making advan…

Triumph Hospitals P.Ltd, Mumbai vs. ITO 7(3)(2), Mumbai

The appeal of the assessee is dismissed

ITA 5735/MUM/2015[2010-11]Status: DisposedITAT Mumbai17 May 2018AY 2010-11

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwalassessment Year: 2010-11 Triumph Hospitals Pvt. Ltd. Acit, 801 & 802, Raheja Central Circle-29, बनाम/ Empress, Veer Savarkar Aayakar Bhavan, Vs. Marg, Prabhadevi, M. K. Road, Mumbai-400025 Mumbai-400020 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aabct4993K

Section 28Section 3Section 36(1)(iii)Section 9

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ,‘ई’,मुंबई। IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, ‘E’ MUMBAI "ी जो"ग"दर "संह, "या"यक सद"य एवं "ी मनोज कुमार अ"वाल, लेखा सद"य, के सम" Before Shri Joginder Singh, Judicial Member, and Shri Manoj Kumar Aggarwal, Accountant Member Assessment Year: 2010-11 Triumph Hospitals Pvt. Ltd. ACIT, 801 and 802, Raheja Central Circle-29, बनाम/ Empress, Veer Savarkar Aayakar Bhavan, Vs. Marg, Prabhadevi, M. K. Road, Mumbai-400025 Mumbai-400020 ("नधा"रती /Assessee) (राज"व /Revenue) PAN. No. AABCT4993K "नधा"रती क" ओर से / Assessee by Shri Vinay Deshmane राज"व क" ओर से / Revenue by…

DCIT, Cir-2(2), Kolkata vs. M/S Prs Metaliks Ltd., Kolkata

In the result, the appeal of the Revenue ITA No

ITA 450/KOL/2016[2012-2013]Status: DisposedITAT Kolkata10 Jan 2018AY 2012-2013

Bench: : Shri S.S.Viswanethra Ravi & Shri Dr. Arjun Lal Sainia.Y 2012-13

For Appellant: Shri David Z.Chawngthu, Addl.CIT, ld. Sr.DRFor Respondent: Shri Dilip Loyalka, FCA, ld.AR
Section 143(2)Section 143(3)Section 32Section 32(1)Section 43B

…ynthetics Ltd 354 ITR 222(Guj) CIT Vs. Reliance Utilities & Power Ltd 313 ITR 340(Bom) CIT Vs. Prem Heavy Engnrs Works P.Ltd 285 ITR 554(All) D & H Secheron Electrodies P.Ltd 142 ITR 528(MP) CIT Vs. Gopikrishna Murlidhar 47 ITR 469 (AP) Regal Theatre Vs. CIT 225 ITR 205(Del) 247 ITR 510(Gau) 16. After considering the above the CIT-A held that the ratio of the cited case laws are found to be squarely applicable to the facts of the present case. He also held that the finding of the AO in disallowing Rs.4,46,817/- as interest for non-business purpose is erroneous and 8 M/s.PRS Metaliks Pvt. Ltd unjustified and ac…

Horizon Infrastructure Ltd, Mumbai vs. ACIT CC 38, Mumbai

In the result, appeal of the assessee is partly allowed

ITA 356/MUM/2015[2010-11]Status: DisposedITAT Mumbai15 Nov 2017AY 2010-11

Bench: Shri G.S. Pannu & Shri Amarjit Singh: A.Y : 2010-11

For Appellant: Shri J.P. BairagraFor Respondent: Shri M.C. Omi Ningshen &
Section 143(3)Section 14ASection 36

…ing the reliance on the decision of the Hon'ble Supreme Court in the case of S.A. Builders Ltd., 8 M/s. Horizon Infrastructure Ltd. 288 ITR 1 (SC), the following decisions have been relied upon to support the case of the assessee:- i) Bombay Samachar Ltd., 74 ITR 723 (Bom) ii) Walchand and Co. (P) Ltd., 65 ITR 381 (SC) iii) Indian Bank, 56 ITR 77 (SC) iv) Century Flour Mills Ltd., 334 ITR 377 (Madras) v) Agarwal Global Steels Ltd., 141 ITD 76 vi) Hero Cycles (P.) Ltd., 379 ITR 347 (SC) 9. On the other hand, the ld. DR appearing for the Revenue has primarily reiterated the stand of the lower authorities, which…

Asst CIT 16(3), Mumbai vs. Nishith M. Desai, Mumbai

In the result, appeals of the Revenue are dismissed and appeal of the assessee is partly allowed

ITA 4852/MUM/2015[2005-06]Status: DisposedITAT Mumbai28 Apr 2017AY 2005-06

Bench: Shri D.T. Garasia & Shri Manoj Kumar Aggarwal

For Appellant: Shri Firoze B. Andhyarujina, A.RFor Respondent: Shri N.P. Singh, D.R
Section 143(3)Section 147Section 24Section 57

…s.51,35,817/-. Therefore, no disallowance can be made. Moreover, we find that the assessee has utilised this borrowings for the purpose of business. Therefore as per the decision of Hon’ble jurisdictional High Court in the case of CIT vs. Bombay Samachar Ltd. 74 ITR 723 (Bom) which supports the case of the assessee, we are of the view that Ld. CIT(A) is justified in his action and our inference is not required at all. 12. In the result, departmental appeal is dismissed. 13. Now we will deal with the assessee’s appeal bearing ITA No.2439/M/2013for A.Y. 2009-10. Ground No.1 14. This ground is already adjudicated…

ACIT 11(3), Mumbai vs. Nishith Desai, Mumbai

In the result, appeals of the Revenue are dismissed and appeal of the assessee is partly allowed

ITA 2562/MUM/2013[2009-10]Status: DisposedITAT Mumbai28 Apr 2017AY 2009-10

Bench: Shri D.T. Garasia & Shri Manoj Kumar Aggarwal

For Appellant: Shri Firoze B. Andhyarujina, A.RFor Respondent: Shri N.P. Singh, D.R
Section 143(3)Section 147Section 24Section 57

…s.51,35,817/-. Therefore, no disallowance can be made. Moreover, we find that the assessee has utilised this borrowings for the purpose of business. Therefore as per the decision of Hon’ble jurisdictional High Court in the case of CIT vs. Bombay Samachar Ltd. 74 ITR 723 (Bom) which supports the case of the assessee, we are of the view that Ld. CIT(A) is justified in his action and our inference is not required at all. 12. In the result, departmental appeal is dismissed. 13. Now we will deal with the assessee’s appeal bearing ITA No.2439/M/2013for A.Y. 2009-10. Ground No.1 14. This ground is already adjudicated…

Nishith M. Desai, Mumbai vs. Addl CIT RG 11(3), Mumbai

In the result, appeals of the Revenue are dismissed and appeal of the assessee is partly allowed

ITA 2439/MUM/2013[2009-10]Status: DisposedITAT Mumbai28 Apr 2017AY 2009-10

Bench: Shri D.T. Garasia & Shri Manoj Kumar Aggarwal

For Appellant: Shri Firoze B. Andhyarujina, A.RFor Respondent: Shri N.P. Singh, D.R
Section 143(3)Section 147Section 24Section 57

…s.51,35,817/-. Therefore, no disallowance can be made. Moreover, we find that the assessee has utilised this borrowings for the purpose of business. Therefore as per the decision of Hon’ble jurisdictional High Court in the case of CIT vs. Bombay Samachar Ltd. 74 ITR 723 (Bom) which supports the case of the assessee, we are of the view that Ld. CIT(A) is justified in his action and our inference is not required at all. 12. In the result, departmental appeal is dismissed. 13. Now we will deal with the assessee’s appeal bearing ITA No.2439/M/2013for A.Y. 2009-10. Ground No.1 14. This ground is already adjudicated…

DCIT CC 3(4) Cen RG 3, Mumbai vs. Patel Engineering Ltd, Mumbai

In the result, appeal of the Revenue is dismissed and the cross objection of the Assessee is allowed in part in terms indicated herein above

ITA 3643/MUM/2015[2005-06]Status: DisposedITAT Mumbai27 Apr 2017AY 2005-06

Bench: Shri C.N. Prasad & Shri Ashwani Taneja

For Appellant: Shri Mayur KisnadwalaFor Respondent: Smt Vidisha Kalra
Section 143(3)Section 801A(4)Section 80I

…m. The sale proceeds of the appellant are deposited in the cash credit account and the debit balance are presumed to have been company's own funds and not from borrowed funds. The appellant relies on the following decisions:  ACIT vs. Bombay Samachar Limited 74 ITR 723 (Bom),  Wimco Seedlings Ltd. vs. OCIT 107 ITO 267 (Del.) It was further pointed out that the facts of following decisions are distinguishable from the facts of the appellant's case:  ACIT v, Citicorp Finance (India) Ltd. 108 lTD 457 • Everplus Securities & Finance Ltd. v. DCII 101 lTD 151 • DOlT v. SG Investments & industries Ltd. 89 lTD 44 17.…

ACIT, New Delhi vs. Shri Ravi Goyal, New Delhi

In the result, all the 05 Appeals filed by the Revenue stand dismissed

ITA 692/DEL/2012[1989-90]Status: DisposedITAT Delhi07 Apr 2017AY 1989-90

Bench: Shri H.S. Sidhu

For Appellant: NoneFor Respondent: Sh. F.R. Meena, Sr. DR
Section 143(3)Section 144Section 147

…6 (1) (iii) of the Act have been complied with and, therefore the assessee company was entitled to full allowance of the amount of interest paid by it on borrowed capital" Reliance may also be placed upon the following cases: CIT Vs Bombay Samachar Limited 74 ITR 723 CIT Vs. Sridev Enterprises 192 ITR 165 Dail Investments Ltd. Vs. Deputy Commissioner Of Income Tax 73 TTJ 22" {13.1} It is seen that this issue was the subject of appeal in Assessment Years 1991-92 and 1992-93. In the order for the Assessment Year 1992-93 of the CIT (A) XXIII dated 31.03.2011, this issue was held in favour of the appellant,…

ACIT, New Delhi vs. Shri Ravi Goyal, New Delhi

In the result, all the 05 Appeals filed by the Revenue stand dismissed

ITA 691/DEL/2012[1987-88]Status: DisposedITAT Delhi07 Apr 2017AY 1987-88

Bench: Shri H.S. Sidhu

For Appellant: NoneFor Respondent: Sh. F.R. Meena, Sr. DR
Section 143(3)Section 144Section 147

…6 (1) (iii) of the Act have been complied with and, therefore the assessee company was entitled to full allowance of the amount of interest paid by it on borrowed capital" Reliance may also be placed upon the following cases: CIT Vs Bombay Samachar Limited 74 ITR 723 CIT Vs. Sridev Enterprises 192 ITR 165 Dail Investments Ltd. Vs. Deputy Commissioner Of Income Tax 73 TTJ 22" {13.1} It is seen that this issue was the subject of appeal in Assessment Years 1991-92 and 1992-93. In the order for the Assessment Year 1992-93 of the CIT (A) XXIII dated 31.03.2011, this issue was held in favour of the appellant,…

ACIT, New Delhi vs. Shri Ravi Goyal, New Delhi

In the result, all the 05 Appeals filed by the Revenue stand dismissed

ITA 690/DEL/2012[1986-87]Status: DisposedITAT Delhi07 Apr 2017AY 1986-87

Bench: Shri H.S. Sidhu

For Appellant: NoneFor Respondent: Sh. F.R. Meena, Sr. DR
Section 143(3)Section 144Section 147

…6 (1) (iii) of the Act have been complied with and, therefore the assessee company was entitled to full allowance of the amount of interest paid by it on borrowed capital" Reliance may also be placed upon the following cases: CIT Vs Bombay Samachar Limited 74 ITR 723 CIT Vs. Sridev Enterprises 192 ITR 165 Dail Investments Ltd. Vs. Deputy Commissioner Of Income Tax 73 TTJ 22" {13.1} It is seen that this issue was the subject of appeal in Assessment Years 1991-92 and 1992-93. In the order for the Assessment Year 1992-93 of the CIT (A) XXIII dated 31.03.2011, this issue was held in favour of the appellant,…

ACIT, New Delhi vs. Shri Ravi Goyal, New Delhi

In the result, all the 05 Appeals filed by the Revenue stand dismissed

ITA 689/DEL/2012[1985-86]Status: DisposedITAT Delhi07 Apr 2017AY 1985-86

Bench: Shri H.S. Sidhu

For Appellant: NoneFor Respondent: Sh. F.R. Meena, Sr. DR
Section 143(3)Section 144Section 147

…6 (1) (iii) of the Act have been complied with and, therefore the assessee company was entitled to full allowance of the amount of interest paid by it on borrowed capital" Reliance may also be placed upon the following cases: CIT Vs Bombay Samachar Limited 74 ITR 723 CIT Vs. Sridev Enterprises 192 ITR 165 Dail Investments Ltd. Vs. Deputy Commissioner Of Income Tax 73 TTJ 22" {13.1} It is seen that this issue was the subject of appeal in Assessment Years 1991-92 and 1992-93. In the order for the Assessment Year 1992-93 of the CIT (A) XXIII dated 31.03.2011, this issue was held in favour of the appellant,…

ACIT, New Delhi vs. Shri Ravi Goyal, New Delhi

In the result, all the 05 Appeals filed by the Revenue stand dismissed

ITA 688/DEL/2012[1984-85]Status: DisposedITAT Delhi07 Apr 2017AY 1984-85

Bench: Shri H.S. Sidhu

For Appellant: NoneFor Respondent: Sh. F.R. Meena, Sr. DR
Section 143(3)Section 144Section 147

…6 (1) (iii) of the Act have been complied with and, therefore the assessee company was entitled to full allowance of the amount of interest paid by it on borrowed capital" Reliance may also be placed upon the following cases: CIT Vs Bombay Samachar Limited 74 ITR 723 CIT Vs. Sridev Enterprises 192 ITR 165 Dail Investments Ltd. Vs. Deputy Commissioner Of Income Tax 73 TTJ 22" {13.1} It is seen that this issue was the subject of appeal in Assessment Years 1991-92 and 1992-93. In the order for the Assessment Year 1992-93 of the CIT (A) XXIII dated 31.03.2011, this issue was held in favour of the appellant,…

M/S. Chhaganlal Kishanlal & Co., Burhanpur vs. The ACIT, Khandwa

In the result, the appeal of the assessee stands allowed

ITA 646/IND/2015[2010-11]Status: DisposedITAT Indore28 Feb 2017AY 2010-11

Bench: Shri C.M. Garg & Shri O.P. Meena

…. further cited following judicial pronouncements in support of his contention as follows: Ram Kishan Oil Mills vs. CIT 56 ITR 186 (MP), Birla Gwalior Pvt. Ltd. vs. CIT 44 ITR 847(MP), D & H Secheron Electrodes Ltd. 142 ITR 529 (MP), Regal Theatre vs. CIT 225 ITR 205(Del), Sarvodya Kela Group vs. ITO 25 ITJ 409(Indore-Trib), and others as per his written submissions. 1.4. On the other hand, the Ld. D.R. relying on the orders of lower authorities submitted that the assessee is not able to substantiate that interest free advances were given out of interest-free funds available with the assessee, hence, fin…

M/S. Rahul Developers Pvt. Ltd., Burhanpur vs. The ACIT, Khandwa

In the result, the appeal of the assessee stands allowed

ITA 645/IND/2015[2010-11]Status: DisposedITAT Indore28 Feb 2017AY 2010-11

Bench: Shri C.M.Garg & Shri O.P. Meena

…. further cited following judicial pronouncements in support of his contention as follows: Ram Kishan Oil Mills vs. CIT 56 ITR 186 (MP), Birla Gwalior Pvt. Ltd. vs. CIT 44 ITR 847(MP), D & H Secheron Electrodes Ltd. 142 ITR 529 (MP), Regal Theatre vs. CIT 225 ITR 205(Del), Sarvodya Kela Group vs. ITO 25 ITJ 409(Indore-Trib), and others as per his written submissions. 1.4. On the other hand, the Ld. D.R. relying on the orders of lower authorities submitted that the assessee is not able to substantiate that interest free advances were given out of interest-free funds available with the assessee, hence, fi…

M/S. Narendra Industries, Burhanpur vs. The ACIT, Khandwa

In the result, the appeal of the assessee stands partly allowed

ITA 644/IND/2015[2010-11]Status: DisposedITAT Indore28 Feb 2017AY 2010-11

Bench: Shri C.M.Garg & Shri O.P. Meena

…ion as follows: Ram Kishan Oil Mills vs. CIT 56 ITR 186 (MP), Birla Gwalior Pvt. Ltd. vs. M/s. Narenda Industries vs ACIT,Khandwa I.T.A.No. 644/Ind/2015 Page 7 of 10 CIT 44 ITR 847(MP), D & H Secheron Electrodes Ltd. 142 ITR 529 (MP), Regal Theatre vs. CIT 225 ITR 205(Del), Sarvodya Kela Group vs. ITO 25 ITJ 409(Indore-Trib), and others as per his written submissions. 1.4. On the other hand, the Ld. D.R. relying on the orders of lower authorities submitted that the assessee is not able to substantiate that interest free advances were given out of interest-free funds available with the assessee, hence, fi…

M/S. C.K. Cotspin Pvt. Ltd., Burhanpur vs. The DCIT, Khandwa

In the result, the appeal of the assessee is allowed

ITA 816/IND/2014[2011-12]Status: DisposedITAT Indore28 Feb 2017AY 2011-12

Bench: Shri C.M. Garg & Shri O.P. Meena

…further cited following judicial pronouncements in support of his contention as follows: Ram Kishan Oil Mills vs. CIT 56 ITR 186 (MP), Birla Gwalior Pvt. Ltd. vs. CIT 44 ITR 847(MP), D & H Secheron Electrodes Ltd. 142 ITR 529 (MP), Regal Theatre vs. CIT 225 ITR 205(Del), Sarvodya Kela Group vs. ITO 25 ITJ M/s. C. K. Cotspin Pvt. Ltd. vs. DCIT-Khandwa/ I.T.A. No.816/Ind/2014/A.Y.:11-12 Page 13 of 23 409(Indore-Trib), and others as per his written submissions. 1.4. On the other hand, the Ld. D.R. relying on the orders of lower authorities submitted that the assessee is not able to substantiate that inter…