CIT v. HDFC Bank Ltd.

366 ITR 505High Court2014#34 most cited

What is CIT v. HDFC Bank Ltd. authority for?

When an assessee possesses interest-free funds sufficient to cover investments yielding tax-free income, it is presumed that such investments were made from these interest-free funds, precluding disallowance of interest expenditure under Section 14A.

1,261

judgments rely on this decision, according to BharatTax’s citation analysis of 367,181 Indian tax judgments — from 2015 to 2026.

Also referred to as

CIT v HDFC Bank Ltd · 366 ITR 505 · Section 14A disallowance · interest expenditure · exempt income · interest-free funds · own funds · presumption · sufficiency of funds · dividend income · Rule 8D

Also reported as

49 Taxmann.com 335226 Taxmann 132107 DTR 140

Sections most often in play

Section 14ASection 143(3)Section 115JBSection 37(1)Section 36(1)(iii)Section 8DSection 10(34)Section 148

Issues it is cited on

disallowance of interest expendituredisallowance under section 14adisallowance u/s 14asection 14abook profitsrevenue expendituresection 115jsection 115jbsection 32capital expendituresection 37(1)section 36

Judgments citing CIT v. HDFC Bank Ltd.

Assistant Commissioner of Income Tax - Circle 2(3)(2), Mumbai vs. Indusind Bank Limited, Mumbai

ITA 2725/MUM/2019[2014-15]Status: DisposedITAT Mumbai26 Oct 2022AY 2014-15
Section 143(3)

…-------- Rs 10.35 crores 4.2. The ld. CIT(A) by placing reliance on the order passed by his predecessor for the A.Y. 2013-14 dated 06/11/2017 and by placing reliance on the decision of Hon‟ble Jurisdictional High Court in the case of HDFC Bank Ltd reported in 366 ITR 505 (Bom) and Reliance Utilities & Power Ltd reported in 313 ITR 340 (Bom) deleted the disallowance of interest made under Rule 8D(2)(ii) of the Rules. The ld. CIT(A) however upheld the disallowance made under Rule 8D(2)(iii) of the Rules. With regard to yet another submission made by the assessee that the disallowance u/s 14A of the Act per se could…

Indusind Bank Limited, Mumbai vs. Assistant Commissioner of Income Tax - Circle 2(3)(2), Mumbai

ITA 2676/MUM/2019[2015-16]Status: DisposedITAT Mumbai26 Oct 2022AY 2015-16
Section 143(3)

…-------- Rs 10.35 crores 4.2. The ld. CIT(A) by placing reliance on the order passed by his predecessor for the A.Y. 2013-14 dated 06/11/2017 and by placing reliance on the decision of Hon‟ble Jurisdictional High Court in the case of HDFC Bank Ltd reported in 366 ITR 505 (Bom) and Reliance Utilities & Power Ltd reported in 313 ITR 340 (Bom) deleted the disallowance of interest made under Rule 8D(2)(ii) of the Rules. The ld. CIT(A) however upheld the disallowance made under Rule 8D(2)(iii) of the Rules. With regard to yet another submission made by the assessee that the disallowance u/s 14A of the Act per se could…

Indusind Bank Limited, Mumbai vs. Assistant Commissioner of Income Tax - Circle 2(3)(2), Mumbai

ITA 2675/MUM/2019[2014-15]Status: DisposedITAT Mumbai26 Oct 2022AY 2014-15
Section 143(3)

…-------- Rs 10.35 crores 4.2. The ld. CIT(A) by placing reliance on the order passed by his predecessor for the A.Y. 2013-14 dated 06/11/2017 and by placing reliance on the decision of Hon‟ble Jurisdictional High Court in the case of HDFC Bank Ltd reported in 366 ITR 505 (Bom) and Reliance Utilities & Power Ltd reported in 313 ITR 340 (Bom) deleted the disallowance of interest made under Rule 8D(2)(ii) of the Rules. The ld. CIT(A) however upheld the disallowance made under Rule 8D(2)(iii) of the Rules. With regard to yet another submission made by the assessee that the disallowance u/s 14A of the Act per se could…

Chakiat Agencies Private Limited, Chennai vs. ACIT Company Circle 1 (3), Chennai

In the result, the appeals filed by the assessee in ITA

ITA 1552/CHNY/2018[2014-15]Status: DisposedITAT Chennai21 Oct 2022AY 2014-15

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwal

For Appellant: Shri P.M. Veeramani, CAFor Respondent: Shri D. Hema Bhupal, JCIT
Section 143(3)Section 14A

…funds are invested in the instruments giving raise to exempt income and no nexus have been proved, presumption will be that the investments is out of own funds, in view of decision of the Hon’ble Bombay High Court in the case of CIT vs. HDFC Ltd., reported in 366 ITR 505. Hence, he requested that the matter can be remanded back to the file of the AO for verification purpose of these funds position and according take a call. 4.1 In regard to disallowance of administrative expenses in two years i.e., assessment year 2011-12 & 2014-15, he only requested that the disallowance can be restricted to the average value o…

Chakiat Agencies Private Limited, Chennai vs. ACIT Company Circle 1 (3), Chennai

In the result, the appeals filed by the assessee in ITA

ITA 1551/CHNY/2018[2011-12]Status: DisposedITAT Chennai21 Oct 2022AY 2011-12

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwal

For Appellant: Shri P.M. Veeramani, CAFor Respondent: Shri D. Hema Bhupal, JCIT
Section 143(3)Section 14A

…funds are invested in the instruments giving raise to exempt income and no nexus have been proved, presumption will be that the investments is out of own funds, in view of decision of the Hon’ble Bombay High Court in the case of CIT vs. HDFC Ltd., reported in 366 ITR 505. Hence, he requested that the matter can be remanded back to the file of the AO for verification purpose of these funds position and according take a call. 4.1 In regard to disallowance of administrative expenses in two years i.e., assessment year 2011-12 & 2014-15, he only requested that the disallowance can be restricted to the average value o…

Chakiat Agencies Private Limited, Chennai vs. ACIT Company Circle 1 (3), Chennai

In the result, the appeals filed by the assessee in ITA

ITA 1550/CHNY/2018[2009-10]Status: DisposedITAT Chennai21 Oct 2022AY 2009-10

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwal

For Appellant: Shri P.M. Veeramani, CAFor Respondent: Shri D. Hema Bhupal, JCIT
Section 143(3)Section 14A

…funds are invested in the instruments giving raise to exempt income and no nexus have been proved, presumption will be that the investments is out of own funds, in view of decision of the Hon’ble Bombay High Court in the case of CIT vs. HDFC Ltd., reported in 366 ITR 505. Hence, he requested that the matter can be remanded back to the file of the AO for verification purpose of these funds position and according take a call. 4.1 In regard to disallowance of administrative expenses in two years i.e., assessment year 2011-12 & 2014-15, he only requested that the disallowance can be restricted to the average value o…

JCIT (OSD) Circle-8(3)(1), Mumbai vs. M/S. Tridoss Laboratories Private Ltd., Mumbai

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

ITA 1489/MUM/2018[2002-03]Status: DisposedITAT Mumbai20 Oct 2022AY 2002-03
Section 143(3)Section 36(1)(iii)Section 37

…interest free advances given to the aforesaid parties. Hence, by placing reliance on the decision of the Hon’ble Jurisdictional High Court in the case of Reliance Utilities and Power Ltd., reported in 313 ITR 340 and in the case of HDFC Bank Ltd., reported in 366 ITR 505, we direct the ld. AO to delete the interest disallowance made in respect of advances given to parties listed in Sr.No.7,8,11,12,13,16, 17 & 18 of the table above. 3.18. The grounds raised by the assessee and by the Revenue are disposed off in the above mentioned manner. 16 ITA No. 1489/Mum/2018 & ITA No.1462/Mum/2018 M/s. Tridoss Laboratories…

M/S. Tridoss Laboratories Private Ltd., Mumbai vs. ACIT Cent. Cir. - 14, Mumbai

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

ITA 1462/MUM/2018[2002-03]Status: DisposedITAT Mumbai20 Oct 2022AY 2002-03
Section 143(3)Section 36(1)(iii)Section 37

…interest free advances given to the aforesaid parties. Hence, by placing reliance on the decision of the Hon’ble Jurisdictional High Court in the case of Reliance Utilities and Power Ltd., reported in 313 ITR 340 and in the case of HDFC Bank Ltd., reported in 366 ITR 505, we direct the ld. AO to delete the interest disallowance made in respect of advances given to parties listed in Sr.No.7,8,11,12,13,16, 17 & 18 of the table above. 3.18. The grounds raised by the assessee and by the Revenue are disposed off in the above mentioned manner. 16 ITA No. 1489/Mum/2018 & ITA No.1462/Mum/2018 M/s. Tridoss Laboratories…

Assistant Commissioner of Income Tax, Circle -1(1), Raipur vs. M/S R.N. Navnirman Private Limited, Raipur

ITA 143/RPR/2018[2014-15]Status: DisposedITAT Raipur23 Sept 2022AY 2014-15

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No.143/Rpr/2018 "नधा"रण वष" / Assessment Year : 2014-15 The Assistant Commissioner Of Income Tax-1(1), Raipur (C.G.) .......अपीलाथ" / Appellant बनाम / V/S. M/S. R.N. Navnirman Pvt. Ltd. Vandana Building, Raipur (C.G.) Pan : Aadcr0896D ……""यथ" / Respondent Assessee By :Shri R.B Doshi, Ca Revenue By :Shri Sanjay Kumar, Sr. Dr

For Appellant: Shri R.B Doshi, CAFor Respondent: Shri Sanjay Kumar, Sr. DR
Section 14ASection 14A(2)Section 14A(3)Section 250(4)Section 68

…"Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in assuming that investment was made out of own funds which is against the ratio of the decision of Hon'ble Bombay High Court in the case of CIT vs HDFC Bank Ltd [366 ITR 505 (Born)] wherein it has been held that presumption of availability of interest apply if same is available at the time of making has not been established assessee ?" 11. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the addition by holding that the assessee has not earned any tax free i…

State Bank of India (Sucessor to Erstwhile State Bank of Indore), Mumbai vs. DCIT Cir 2(2), Mumbai

In the result, appeals filed by the assessee in ITA

ITA 277/MUM/2022[2005-06]Status: DisposedITAT Mumbai20 Sept 2022AY 2005-06

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms Kavitha Rajagopal, Hon'Ble

Section 14ASection 244ASection 271(1)(c)

…. In such circumstances the presumption shall be that the investments were made only from out of interest free funds and not from borrowed funds. Respectfully following the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. HDFC Bank Ltd [366 ITR 505], we direct the Assessing Officer to delete the interest disallowance made under Rule 8D (2)(ii) of I.T. Rules. 10. With regard to Ground No. 2 which is in respect of incorrect computation of refund, adjustment of refunds granted while computing interest u/s. 244A of the Act, Ld. AR submitted that refund granted by the tax department has to be f…

Kalamkari Designs Pvt. Ltd., Gurgaon Haryana vs. DCIT Circle 11(1), Kolkata

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

ITA 1739/DEL/2021[2012-2013]Status: DisposedITAT Delhi19 Sept 2022AY 2012-2013
For Appellant: NoneFor Respondent: Ms. Anjula Jain, CIT DR
Section 14ASection 2(24)(x)Section 36(1)(va)

…estment. Authorities below have rejected the same on the ground that assessee should have maintained separate books. However, as held by Hon’ble Bombay High Court in the case of CIT vs. Reliance Utilities & Power Ltd. 313 ITR 340 and in CIT vs. HDFC Bank Ltd. 366 ITR 505 (Bom) when assessee has sufficient interest free funds no disallowance u/s 14A is required to be done for interest. It is well settled that right of attribution lies with the assessee. In the present case, it is not the case of the Revenue that assessee has not own funds to make those investments on which exempt dividend income has been earned.…

Bank of Baroda ( W.R.T.E- Dena Bank), Mumbai-400051 vs. Principal Commissioner of Income Tax -2, Mumbai-400020

In the result, the appeal of the assessee is allowed

ITA 1253/MUM/2022[2017-18]Status: DisposedITAT Mumbai15 Sept 2022AY 2017-18

Bench: Shri Amit Shukla & Shri Amarjit Singhbank Of Baroda Vs. The Pr. Commissioner Of (W.R.T E-Dena Bank) Income Tax-2, Baroda Corporate Centre, Room No. 344, 3 Rd Floor, 2Nd Floor, Corp A/C & Aayakar Bhavan, Tax Dept. C-26, G-Block, Maharishi Karve Road, Bandra Kurla Complex, Mumbai - 400020 Bandra East, Mumbai – 400051 स्थायी लेखा सं./ जीआइआर सं./ Pan/Gir No: Aaacb1534F Appellant .. Respondent

For Appellant: S. Ananthan &For Respondent: Dr. Mahesh Akhade
Section 115JSection 142(1)Section 143(2)Section 143(3)Section 263

…ITA No.1253/Mum/2022 A.Y. 2017-18 1 Bank of Baroda Vs. The Pr.CIT-2 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER Bank of Baroda Vs. The Pr. Commissioner of (w.r.t E-Dena Bank) Income Tax-2, Baroda Corporate Centre, Room No. 344, 3 rd Floor, 2nd Floor, Corp A/c and Aayakar Bhavan, Tax Dept. C-26, G-Block, Maharishi Karve Road, Bandra Kurla Complex, Mumbai - 400020 Bandra East, Mumbai – 400051 स्थायी लेखा सं./ जीआइआर सं./ PAN/GIR No: AAACB1534F Appellant .. Respondent Appellant by : S. Ananthan & Mrs. Lalitha Respondent…

Ram Garhia Co-Operative Bank Limited, New Delhi vs. ACIT, Circle- 63(1), New Delhi

In the result, the Appeal of the assessee is partly allowed for statistical purpose

ITA 6792/DEL/2018[2013-14]Status: DisposedITAT Delhi15 Sept 2022AY 2013-14

Bench: Dr. B.R.R. Kumar & Shri Yogesh Kumar U.S.I.T.A. No. 6792/Del/2018 (A.Y 2013-14)

For Appellant: ShriFor Respondent: Shri Girish Kohli
Section 194ASection 36Section 40

…ties. The assessee claimed deduction of Rs. 1,92,041/- on account of amortization of premium on government securities in accordance with RBI Guidelines. The assessee has relied on the decision of Hon’ble Bombay High Court in the case of CIT Vs. HDFC Bank Ltd. 366 ITR 505 (BOM) and also on the CBDT Instruction No. 17/2008 dated 26/11/2008. The Ld.CIT(A) A.O is of the opinion that premium paid was capital in nature. Therefore, disallowed the claim of the assessee. In the Appeal before the CIT(A) has been held that the same was ‘capital loss’ and by relying on the decision of the Hon'ble Supreme Court in the case of…

M/S Bosch Limited, Bangalore vs. Assistant Commissioner of Income Tax Ltu Circle-1, Bangalore

In the result, appeal of the assessee is partly allowed

ITA 1629/BANG/2018[2013-14]Status: DisposedITAT Bangalore13 Sept 2022AY 2013-14

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sassessment Year : 2013-14 Bosch Limited, Vs. The Assistant Commissioner Hosur Road, Adugodi, Of Income Tax, Ltu, Bangalore – 560 030. Circle 1, Pan: Aaacm 9840P Bangalore. Appellant Respondent Appellant By : Shri Percy Pardiwala, Advocate Respondent By : Shri V S Chakrapani, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 01.09.2022 Date Of Pronouncement : 13.09.2022 O R D E R Per Padmavathy S.2. This Appeal Is Against The Order Of The Cit(Appeals), Bangalore-9, Bangalore Dated 31.3.2018 For The Assessment Year 2013- 14. 3. The Assessee Raised Grounds Pertaining To The Following Issues:- Deduction U/S. 35(2Ab) Computed On Net Expenditure As Opposed To Gross Expenditure Disallowance Of Provision For Bad & Doubtful Debts I) Disallowance Of Provision For Long Term Service Award Disallowance Of Expenditure U/S. 14A Of The Act Ii) Page 2 Of 67

For Appellant: Shri Percy Pardiwala, AdvocateFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru
Section 14ASection 35Section 37Section 43BSection 80J

…of the I.T. Rules should be deleted. We order accordingly." Thereafter, it was held by Hon’ble Karnataka High Court as under:- “The aforesaid shows that the Tribunal has followed a decision of the Bombay High Court in the case of CIT v. HDFC Bank Ltd. [2014] 366 ITR 505/226 Taxman 132 (Mag.)/49 taxmann.com 335 . When the issue is already covered by a decision of the High Court of Bombay with which we concur, we do not find any substantial question of law would arise for consideration as canvassed.” 39. Therefore, by placing reliance on the above judgment we hold that disallowance u/s 14A r.w. Rule 8D(2)(ii) is n…

Gangadhar Narsingdas Agrawal (HUF), Margao vs. Asstt. Comm. of Income Tax Circle 1, Margao

In the result, appeal of the assessee is allowed

ITA 140/PAN/2018[2011-12]Status: DisposedITAT Panaji30 Aug 2022AY 2011-12

Bench: Shri Chandra Mohan Garg & Shri Girish Agrawalassessment Year: 2011-12 M/S. Gangadhar Narsingdas Assistant Commissioner Of Agrawal (Huf) Income-Tax, Circle-1, 1St Floor, Anand Bhavan, Vs. Margao-Goa. Old Station Rod, Margao- Goa 403601 (Pan: Aabhg4804R) (Appellant) (Respondent) Present For: Appellant By : Shri Nishant Thakkar, Advocate Respondent By : Shri Mayur Kamble, Sr. Dr Date Of Hearing : 16.06.2022 Date Of Pronouncement : 30.08.2022 O R D E R Per Girish Agrawal: This Appeal By The Assessee Is Directed Against The Order Of Ld. Cit(A), Panaji-1 Vide Ita No. 42/Mrg/2014-15 Dated 16.03.2018 For A.Y. 2011-12 Passed Against The Assessment Order U/S 143(3) Of The Income-Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) By Acit, Circle-1, Margao, Goa Dated 25.03.2014. 2. Shri Nishant Thakkar, Advocate Appeared On Behalf Of The Assessee & Shri Mayur Kamble, Sr. Dr Appeared On Behalf Of The Revenue.

For Appellant: Shri Nishant Thakkar, AdvocateFor Respondent: Shri Mayur Kamble, Sr. DR
Section 10(34)Section 143(3)Section 14ASection 3

…rest free funds generated or available with company, provided such funds are sufficient to meet the said investments. 5.4. Reference was also made to another decision of Hon’ble Jurisdictional High Court of Bombay in the case of CIT Vs. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom.) wherein also similar views were upheld. 6. On the other hand, Ld. Sr. DR placed reliance on the orders of the authorities below. 7. We have heard the rival submissions and perused the material available on record and gone through the judicial precedents referred to before us. Admittedly, it is a fact that the own funds i.e. interest free…

Edelweiss Financail Services Ltd, Mumbai vs. Dy CIT CC-1(1), Mumbai

In the result, appeal of the assessee for A

ITA 1328/MUM/2021[2014-15]Status: DisposedITAT Mumbai25 Aug 2022AY 2014-15
Section 10Section 115JSection 143(3)Section 14ASection 14A(2)Section 90

…re was no need for it to make any borrowings and pay interest on such borrowings. We find that the Hon’ble Jurisdictional High Court in plethora of cases in the case of Reliance Utilities and Power Ltd., reported in 313 ITR 340 and HDFC Bank Ltd., reported in 366 ITR 505 had categorically held that once there are mixed funds i.e. borrowed funds as well as own funds available with the assessee, natural presumption that could be arrived would be that interest free loans and advances and investments had been made out of own funds provided the interest free funds are more than the interest free advances and investmen…

Edelweiss Financial Services Ltd., Mumbai vs. Dy CIT CC-1(1), Mumbai

In the result, appeal of the assessee for A

ITA 1283/MUM/2021[2012-13]Status: DisposedITAT Mumbai25 Aug 2022AY 2012-13
Section 10Section 115JSection 143(3)Section 14ASection 14A(2)Section 90

…re was no need for it to make any borrowings and pay interest on such borrowings. We find that the Hon’ble Jurisdictional High Court in plethora of cases in the case of Reliance Utilities and Power Ltd., reported in 313 ITR 340 and HDFC Bank Ltd., reported in 366 ITR 505 had categorically held that once there are mixed funds i.e. borrowed funds as well as own funds available with the assessee, natural presumption that could be arrived would be that interest free loans and advances and investments had been made out of own funds provided the interest free funds are more than the interest free advances and investmen…

Edelweiss Finanacial Services Ltd., Mumbai vs. Dy CIT -CC-1(1), Mumbai

In the result, appeal of the assessee for A

ITA 1197/MUM/2021[2013-14]Status: DisposedITAT Mumbai25 Aug 2022AY 2013-14
Section 10Section 115JSection 143(3)Section 14ASection 14A(2)Section 90

…re was no need for it to make any borrowings and pay interest on such borrowings. We find that the Hon’ble Jurisdictional High Court in plethora of cases in the case of Reliance Utilities and Power Ltd., reported in 313 ITR 340 and HDFC Bank Ltd., reported in 366 ITR 505 had categorically held that once there are mixed funds i.e. borrowed funds as well as own funds available with the assessee, natural presumption that could be arrived would be that interest free loans and advances and investments had been made out of own funds provided the interest free funds are more than the interest free advances and investmen…

JCIT Spl. Range, New Delhi vs. Tourism Finance Corporation of India Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 1001/DEL/2019[2015-16]Status: DisposedITAT Delhi23 Aug 2022AY 2015-16

Bench: Shri Challa Nagendra Prasada N D Shri Pradip Kumar Kedia

For Appellant: Shri Abhishek KumarFor Respondent: Sr. D. R
Section 143(3)Section 14A

…ct to Rs.8,20,95,902/-. 4. On appeal the ld. CIT (Appeals) taking note of the fact that the assessee has sufficient interest-free funds for the investments made and following the ratio of the decision of the Bombay High Court in the case of CIT Vs. HDFC Bank 366 ITR 505 wherein it has been held that if assessee’s capital, profit, reserves etc. were higher than the investment and tax-free securities it would have to be presumed that the investment made by the assessee would be out of interest-free funds available with the assessee and consequently no disallowance could be made under section 14A of the Act, delete…

Forbes Marshall Pvt.Ltd, Pune vs. Assistant Commissioner of Income-Tax, Circle - 9, Pune

The appeal of the assessee is partly allowed

ITA 274/PUN/2018[2013-14]Status: DisposedITAT Pune10 Aug 2022AY 2013-14
For Appellant: Shri Kishor PhadkeFor Respondent: Shri Arvind Desai
Section 14ASection 35

…has already been laid down by the Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. (supra). We are also squarely governed by the direct decision of the Hon’ble Bombay High Court in the case of CIT vs. HDFC Bank Ltd. reported in (2014) 366 ITR 505 (Bom), wherein the Hon’ble High Court categorically held that in-principle, if there are funds available both interest-free and interest bearing, then a presumption would arise that investment would be out of interest-free funds generated or available with the assessee, if the interest-free funds were sufficient to meet the investments. Hence, in…