CIT v. Caroline Investment Ltd.

232 ITR 7High Court1998#7339 most cited

What is CIT v. Caroline Investment Ltd. authority for?

Interest paid on capital borrowed for business purposes is allowable as a deduction under section 36(1)(iii), irrespective of how the borrowed money was applied. The interest cannot be disallowed even if the borrowed funds were lent out and subsequently written off as irrecoverable.

15

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2011 to 2024.

Also referred to as

CIT v. Caroline Investment Ltd. · CIT v. Kanoria Investment (P) Ltd. · section 36(1)(iii) · interest expenditure · business purpose · borrowed funds · disallowance · irrecoverable debt

Sections most often in play

Section 10Section 143(3)Section 14ASection 154Section 1962Section 36(1)(iii)Section 56Section 57

Issues it is cited on

section 80ia(8)disallowance under section 40(a)(ia)section 194hsection 80icsection 194jsection 40a(2)(b)tax benefitsection 2(22)section 2(22)(e)section 40a(2)disallowance of interest expenditureput to use

Judgments citing CIT v. Caroline Investment Ltd.

Om Sri Maa Shakti Namah, Mumbai vs. Asstt. Commissioner of Income Tax, Cir-32(2), Mumbai

ITA 1989/MUM/2024[2014-2015]Status: DisposedITAT Mumbai27 Sept 2024AY 2014-2015

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

Section 36(1)(iii)Section 57

…o net interest expense claim of Rs. 43,40,876/- debited in the P & L A/c is justifiable and does not require any correction/adjustment in the computation of business income. iv. The H'ble Calcutta HC in the case of CIT v. Kanoria Investments Pvt. Ltd. [1998] 232 ITR 7 (Cal.) and the H'ble Delhi HC in the case of CIT v. Kabridas Investment Co. Pvt. Ltd. [2001] 249 ITR 776 (Del.) held that "where funds borrowed for business purposes yield Business Income as well as Income from Other Sources, the entire interest paid is to be allowable u/s 36(1)(iii). The H'ble Calcutta HC has gone a step forward and held that Inte…

Dalmia (Bros) Pvt. Ltd., New Delhi vs. ITO, Ward-7(2), New Delhi

In the result, the Appeal filed by the assessee is dismissed

ITA 380/DEL/2019[2014-15]Status: DisposedITAT Delhi09 Feb 2024AY 2014-15

Bench: Her As Additional Ground Of Appeal Reading As Under :-

Section 143(3)Section 14ASection 154

…These provisions do not create any legal fiction to deem any expenditure as expenditure incurred in relation to exempt income. This view is fully supported by the judgement of the Calcutta High Court in the case of CIT vs. Kanodia Investment Pvt. Ltd. (1993) 232 ITR 7 and the decision of the Bombay Bench of the Income Tax Appellate Tribunal in the case of Mafatlal Holdings Ltd. vs. Additional CIT (2004) 85 TTJ (Mum) 821 in addition to cases referred in para 7.7 above. The decision in ACIT vs. Eicher Ltd. (supra) is to the same Page 14 of 20 Dalmia (Bros.) Pvt. Ltd. effect where it has been held that the expend…

M/S. Rmz Hotels Private Limited, Bangalore vs. National E-Assessment Centre, Delhi

In the result, the appeal of the assessee is allowed

ITA 954/BANG/2022[2018-19]Status: DisposedITAT Bangalore22 Feb 2023AY 2018-19

Bench: Shri Chandra Poojariassessment Year: 2018-19

For Appellant: Shri V. Srinivasan, A.RFor Respondent: Shri Ganesh R. Ghale, Standing Counsel for Department
Section 234Section 255Section 255(3)Section 36

…ITA No.954/Bang/2022 M/s. RMZ Hotels Private Limited, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” “C’’ BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER Assessment Year: 2018-19 M/s. RMZ Hotels Private Limited The Millenia Level 1 & 14, No.1 & 2 Murphy Road NFAC Vs. Ulsoor Delhi Bangalore 560 008. PAN NO : AADCR3654H APPELLANT RESPONDENT Appellant by : Shri V. Srinivasan, A.R. Respondent by : Shri Ganesh R. Ghale, Standing Counsel for Department. Date of Hearing : 08.02.2023 Date of Pronouncement : 22.02.2023 O R D E R This appeal by assessee is directed against order of CIT(A) dat…

DCIT, C-11(1), New Delhi vs. Hero Motocorp Ltd., New Delhi

Appeal of the Revenue is dismissed

ITA 1982/DEL/2019[2014-15]Status: DisposedITAT Delhi03 Feb 2023AY 2014-15

Bench: Shri Narendra Kumar Billaiya & Shri Kul Bharat

Section 14ASection 2(22)(e)Section 40Section 40a

…l) - CIT v Dhampur Sugar Mills Ltd : 274 ITR 370 (All) 33 - CIT v. United Collieries Ltd. : 49 Taxman 227 (Cal) - CIT v. Enamour Investment Ltd.: 72 Taxman 370 (Cal) - CIT v. Caroline Investment Ltd.: 87 Taxman 238 (Cal) - CIT v. Kanoria Investment (P) Ltd.: 232 ITR 7 (Cal) - CIT vs. Hotel Savera: 239 ITR 795 (Mad) - Smt. Chanchal Katyal v. CIT: 298 ITR 182 (All.) - CIT v. Reliance Utilities and Power Ltd.: 313 ITR 340 (Bom) - CIT v. HDFC Bank Ltd.: 284 CTR 414 (Bom.) - Hero Honda Finlease Ltd vs. ACIT: ITA No. 3726 & 6102/Del/2012 (Del) Reliance is also placed on the following cases, wherein, the Courts have re…

M/S. Mobily Infotech India Private Limited, Bangalore vs. Income Tax Officer, Ward-4(1)(3), Bangalore

In the result, the appeal by the assessee is allowed

ITA 313/BANG/2022[2017-18]Status: FixedITAT Bangalore07 Jul 2022AY 2017-18

Bench: Shri George George K. & Ms. Padmavathy Sassessment Year : 2016-17

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Sankarganesh K. Jt.CIT(DR)(ITAT), Bengaluru
Section 143(2)Section 143(3)Section 36(1)(iii)Section 40

…f the business or undertaking for which the loans had been obtained had been transferred does not alter the fact that loans had, when obtained, been for the purpose of Assessee’s business. (v) The Calcutta High Court in CIT v Kanoria Investments P Ltd [1998] 232 ITR 7 held that once the capital has been borrowed for the purpose of business, it is immaterial as to how the borrowed money was applied, the interest payment would be deductible under section 36(1)(iii) of the Act. It is not in dispute in the present case that the loan was used for the Page 9 of 17 purpose of business. Thus, notwithstanding the fact t…

M/S. Hical Infra Private Limited, Bangalore vs. Deputy Commissioner of Income Tax (OSD), Range- 1, Bangalore

In the result, the appeal by the assessee is allowed

ITA 313/BANG/2020[2016-17]Status: DisposedITAT Bangalore07 Jul 2022AY 2016-17

Bench: Shri George George K. & Ms. Padmavathy Sassessment Year : 2016-17

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Sankarganesh K. Jt.CIT(DR)(ITAT), Bengaluru
Section 143(2)Section 143(3)Section 36(1)(iii)Section 40

…f the business or undertaking for which the loans had been obtained had been transferred does not alter the fact that loans had, when obtained, been for the purpose of Assessee’s business. (v) The Calcutta High Court in CIT v Kanoria Investments P Ltd [1998] 232 ITR 7 held that once the capital has been borrowed for the purpose of business, it is immaterial as to how the borrowed money was applied, the interest payment would be deductible under section 36(1)(iii) of the Act. It is not in dispute in the present case that the loan was used for the Page 9 of 17 purpose of business. Thus, notwithstanding the fact t…

Hero Moto Corp Ltd., New Delhi vs. Neac, Delhi

ITA 706/DEL/2021[2016-17]Status: DisposedITAT Delhi26 Nov 2021AY 2016-17

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Surendra Pal
Section 143(3)Section 144BSection 144CSection 144C(13)Section 145Section 1lSection 80ISection 92C

…v Dhampur Sugar Mills Ltd : 274 ITR 370 (All) xi. CIT v. United Collieries Ltd. : 49 Taxman 227 (Cal) xii. CIT v. Enamour Investment Ltd.: 72 Taxman 370 (Cal) xiii. CIT v. Caroline Investment Ltd.: 87 Taxman 238 (Cal) xiv. CIT v. Kanoria Investment (P) Ltd.: 232 ITR 7 (Cal) xv. CIT vs. Hotel Savera: 239 ITR 795 (Mad) xvi. Smt. Chanchal Katyal v. CIT: 298 ITR 182 (All.) xvii. CIT v. Reliance Utilities and Power Ltd.: 313 ITR 340 (Bom) xviii. CIT v. HDFC Bank Ltd.: 284 CTR 414 (Bom.) xix. Hero Honda Finlease Ltd vs. ACIT: ITA No. 3726 & 6102/Del/2012 (Del) 44. Reliance is also placed on the following cases, where…

Hero Motocrop Ltd., New Delhi vs. ACIT, Circle- 11(1), New Delhi

The appeal of the assessee is partly allowed

ITA 9187/DEL/2019[2015-16]Status: DisposedITAT Delhi13 Apr 2021AY 2015-16

Bench: Shri Sudhanshu Srivastava & Shri O.P. Kantassessment Year: 2015-16

Section 115JSection 143(3)Section 144CSection 145ASection 80ISection 92C

…(All) - CIT v Dhampur Sugar Mills Ltd : 274 ITR 370 (All) - CIT v. United Collieries Ltd. : 49 Taxman 227 (Cal) - CIT v. Enamour Investment Ltd.: 72 Taxman 370 (Cal) - CIT v. Caroline Investment Ltd.: 87 Taxman 238 (Cal) - CIT v. Kanoria Investment (P) Ltd.: 232 ITR 7 (Cal) - CIT vs. Hotel Savera: 239 ITR 795 (Mad) - Smt. Chanchal Katyal v. CIT: 298 ITR 182 (All.) - CIT v. Reliance Utilities and Power Ltd.: 313 ITR 340 (Bom) - CIT v. HDFC Bank Ltd.: 284 CTR 414 (Bom.) - Hero Honda Finlease Ltd vs. ACIT: ITA No. 3726 & 6102/Del/2012 (Del) Hero Motocorp Ltd. vs. ACIT 40.0.4 Reliance was also placed on the followi…

Hero Motocorp Ltd., New Delhi vs. DCIT, Circle- 11(1), New Delhi

Appeal of the assessee is partly allowed for statistical purpose

ITA 1351/DEL/2018[2009-10]Status: DisposedITAT Delhi23 Apr 2019AY 2009-10

Bench: Shri N. K. Billaiya & Ms Suchitra Kamble

For Appellant: Amount of Proposed international
Section 115JSection 143(3)Section 144C

…(All) • CIT v Dhampur Sugar Mills Ttd : 274 ITR 370 (All) • CIT v. United Collieries Ltd. : 49 Taxman 227 (Cal) • CIT v. Enamour Investment Ttd.: 72 Taxman 370 (Cal) • CIT v. Caroline Investment Ltd.: 87 Taxman 238 (Cal) • CIT v. Kanoria Investment (P) Ltd.: 232 ITR 7 (Cal) • CIT vs. Hotel Savera: 239 ITR 795 (Mad) • Smt. Chanchal Katyal v. CIT: 298 ITR 182 (All.) • CIT v. Reliance Utilities and Power Ltd.: 313 ITR 340 (Bom) The Ld. AR also relied upon the following cases, wherein, the Courts have repeatedly held that interest expenditure cannot be disallowed under section 14A of the Act, where the assessee ha…

Hero Motocorp Ltd., New Delhi vs. Addl.CIT, Range-11, New Delhi

In the result ground No

ITA 6990/DEL/2017[2013-14]Status: DisposedITAT Delhi20 Jun 2018AY 2013-14

Bench: Shri R. K. Panda & Ms Suchitra Kamblei.T.A. No. 6990/Del/2017 (A.Y 2013-14)

Section 143(3)Section 144C

…(All)  CIT v Dhampur Sugar Mills Ltd : 274 ITR 370 (All)  CIT v. United Collieries Ltd. : 49 Taxman 227 (Cal)  CIT v. Enamour Investment Ltd.: 72 Taxman 370 (Cal)  CIT v. Caroline Investment Ltd.: 87 Taxman 238 (Cal)  CIT v. Kanoria Investment (P) Ltd.: 232 ITR 7 (Cal)  CIT vs. Hotel Savera: 239 ITR 795 (Mad)  Smt. Chanchal Katyal v. CIT: 298 ITR 182 (All.)  CIT v. Reliance Utilities and Power Ltd.: 313 ITR 340 (Bom) Reliance is also placed on the following cases, wherein, the Courts have repeatedly held that interest expenditure cannot be disallowed under section 14A of the Act, where the assessee had…

Hero Motocorp Ltd., New Delhi vs. DCIT, New Delhi

In the result appeal No. 2424/Del/ 2015 filed by the revenue in assessment year 2010-11 is partly allowed

ITA 1616/DEL/2017[2012-13]Status: DisposedITAT Delhi13 Jun 2018AY 2012-13

Bench: Shri R. K. Panda & Ms Suchitra Kamble

Section 143(3)Section 144CSection 92C

…(All) • CIT v Dhampur Sugar Mills Ltd : 274 ITR 370 (All) • CIT v. United Collieries Ltd. : 49 Taxman 227 (Cal) • CIT v. Enamour Investment Ltd.: 72 Taxman 370 (Cal) • CIT v. Caroline Investment Ltd.: 87 Taxman 238 (Cal) • CIT v. Kanoria Investment (P) Ltd.: 232 ITR 7 (Cal) • CIT vs. Hotel Savera: 239 ITR 795 (Mad) • Smt. Chanchal Katyal v. CIT: 298 ITR 182 (All.) • CIT v. Reliance Utilities and Power Ltd.: 313 ITR 340 (Bom) Reliance is also placed on the following cases, wherein, the Courts have repeatedly held that interest expenditure cannot be disallowed under section 14A of the Act, where the assessee had…

ITO, WD-12(3), Kolkata vs. Amrabathi Investra Pvt. Ltd., Kolkata

In the result the appeal by the revenue is dismissed

ITA 1315/KOL/2014[2008-2009]Status: DisposedITAT Kolkata05 Apr 2017AY 2008-2009

Bench: Hon’Ble Shri N.V.Vasudevan, Jm & Shri M.Balaganesh, Am ] Assessment Year : 2008-09

For Appellant: Shri G.Mallikarjuna, CIT(DR)For Respondent: Shri N.K.Poddar, Sr.Advocate & Shri Gautam M.Bavishi,FCA
Section 73Section 73(1)

…s). It was argued that in the circumstances, there can be no doubt that the principal business of the assessee was granting of loans and advances following the ratio laid down by the jurisdictional High Court in the case of CIT vs. Kanoria Investment (P) Ltd. 232 ITR 7(Cal) wherein it was held that the principal business is determined on the basis of fund deployed in a particular business and not on the basis of income earned from the particular business. It was pointed out that in the context of Explanation to section 73, Hon'ble Kolkata bench of the Tribunal in the case of Off-Shore India Ltd. vs. ITO 15 ITD 54…

Hero Motocorp Limited, New Delhi vs. JCIT, New Delhi

In the result appeal of the assessee in ITA No

ITA 1545/DEL/2015[2010-11]Status: DisposedITAT Delhi24 Oct 2016AY 2010-11

Bench: Sh. I. C. Sudhir & Shri Prashant Maharishihero Motocorp Limited, Jcit, 34, Basant Lok, Vasant Range-1, New Delhi Vs. Vihar, New Delhi Pan: Aaach0812J (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community Vs. New Delhi Centre, Basant Lok, Vasant Vihar, New Delhi-110057 (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. NC Sawain, CIT DR
Section 143Section 143(3)Section 144CSection 92C

…T v Dhampur Sugar Mills Ltd : 274 ITR 370 (All) vi. CIT v. United Collieries Ltd. : 49 Taxman 227 (Cal) vii. CIT v. Enamour Investment Ltd.: 72 Taxman 370 (Cal) viii. CIT v. Caroline Investment Ltd.: 87 Taxman 238 (Cal) ix. CIT v. Kanoria Investment (P) Ltd.: 232 ITR 7 (Cal) x. Tata Fertilizers Ltd. v. DCIT: 92 Taxman (Mag) 423 (Mum) xi. Smt. Chanchal Katyal V. CIT: 207 CTR 154 (All.) xii. DCIT V. Samtel Electron Devices Ltd: 100 TTJ 706 (Del.) Hero MotoCorp Limited Vs. JCIT & DCIT Vs. Hero MotoCorp Ltd. ITA Nos. 1545/Del/2015 and 2424/Del/2015 (AY 2010-11) ITA No. 1609/Del/2016 and 914/Del/2016 (AY 2011-12) Pa…

The Commissioner of Income Tax vs. Rbg Investment & Finance Ltd

ITA/323/2010HC Delhi30 Oct 2012
Section 36(1)(iii)Section 361(1)(iii)Section 73

…re interest and financial charges incurred by it would be allowed as a deduction without being bifurcated. The CIT (Appeals) found merit in the assessee‟s contention and held as under: - “I have considered the facts of the case. In the case reported in 232 ITR 7, the Hon’ble High Court has held that once capital has been borrowed for the purpose of business, it is immaterial as to how the borrowed money was applied. The interest payment would be deductible u/s 361(1)(iii) of the Act. Considering that the borrowings made by the assessee were for the purpose of business, whether of dealing in shares o…

Commissioner of Income Tax-2 vs. Agricultural Market Committee

ITTA/153/2011HC Telangana20 Apr 2011

Bench: V.V.S.RAO,RAMESH RANGANATHAN

CIT v. Caroline Investment Ltd. (232 ITR 7) — Cited in 15 Judgments | BharatTax