CIT v. HDFC Bank Ltd.

DCIT 1(1)(1), Mumbai vs. Aegis Logistics P.Ltd, Mumbai

In the result, the appeal filed by the revenue is hereby ordered to be dismissed

Bench: Shri Shamim Yahya, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.1945/Mum/2016 (निर्धारण वर्ा / Assessment Year: 2011-12) Dcit-1(1)(1) बिधम/ M/S. Aegis Logistics Ltd. 579, Aayakar Bhawan, M.K. 40, Peninsula Chambers, Vs. Peninsula Corporate Park, Road, Mumbai-400020 G.K. Marg, Lower Parel, Mumbai-400013 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaaca3302N (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri Ram Tiwari (Sr. Ar) Assessee By: Shri Ketan Ved सुनवाई की तारीख / Date Of Hearing: 18.05.2018 घोषणा की तारीख /Date Of Pronouncement: 23.05.2018 आदेश / O R D E R Per Amarjit Singh, Jm: The Revenue Has Filed The Present Appeal Against The Order Dated 22.12.2015 Passed By The Commissioner Of Income Tax (Appeals)-2, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The Ay. 2011-12. 2. The Revenue Has Raised The Following Grounds: - “1.Whether On Facts & In Circumstances Of The Case & In Law, The Ld. Cit(A) Was Correct In Stating That The Interest Portion Of Rs.6,32,96,027/- Be Not Considered In Computing Disallowance U/S 14A R.W. Rule 8D2(Ii).

…vestment. The capital and ITA. No. 1945/M/2016 A.Y. 2011-12 reserves fund was to the tune of Rs.26,433.77 lacs. The investment was to the tune of Rs.9,453.07/- lacs. In view of law settled in Reliance Utilities & Power Ltd. (313) ITR 340) and HDFC Bank Ltd. (366 ITR 505) investment portion was not liable to be considered in computing the disallowance u/s 14A r.w. Rule 8D of the I.T. Act. The matter of controversy has rightly been adjudicated by the CIT(A) . Facts are not distinguishable at this stage also. No distinguishable material has been produced before us. In view of the said circumstances, we are of the v…

Shanakar Packagings Ltd, Mumbai vs. DCIT RG 5(3), Mumbai

Bench: Shri R. C. Sharma, Am & Sh. Sandeep Gosain, Jm आयकरअपीलसं./ I.T.A. No. 3951/Mum/2016 (निर्धारणवर्ा / Assessment Year: 2011-12)

…towards the said advances, it must be presumed that the same have been given from interest free funds. Ld. AR in order to support his stand also relied upon the decision of Hon’ble Bombay High Court in case of Reliance Utilities Ltd, 313 ITR 340 and HDFC Ltd, 366 ITR 505. Ld. AR further submitted that advances during the year were only Rs. 30,823/- and the rest was advanced in the past and therefore, in such circumstances, if at all the disallowance has to be made, it should have been restricted to the advances given during the assessment year in question. It was further submitted by Ld. AR that there was no disa…

Progressive Homes, Navi Mumbai vs. ACIT Cent. Cir. 4(4), Mumbai

In the result, the appeal is partly allowed

Bench: Shri C.N. Prasad () & Shri N.K. Pradhan () Assessment Year: 2012-13 Progressive Homes Acit, Circle-4(4) 707, Devavrata Sector 17, Cgo Building M.K. Road, Vs. Vashi, Navi Mumbi-400703 Mumbai-400020. Pan No. Aahfm5228J Appellant Respondent Assessee By : Mr. Rajiv Waglay, Ar Revenue By : Mr. V. Vidhyadhar, Dr Date Of Hearing : 04/04/2018 Date Of Pronouncement : 16/05/2018

…g a credit balance of Rs.19,28,71,467/- is more than the investment in mutual funds to the tune of Rs.51,45,000/- In HDFC Bank Ltd. v. DCIT [2016] 67 taxmann.com 42 (Bom), the Hon'ble Bombay High Court referring to the decision in CIT v. HDFC Bank Ltd. [2014] 366 ITR 505 (Bom) and CIT v. Reliance Utilities & Power Ltd. [2009] 313 ITR 340 (Bom) held as under : “15. It is clear that for the first time in the case of HDFC Bank Ltd. (supra) that this Court took a view that the presumption which has been laid down in Reliance Utilities & Power Ltd. (supra) with regard to investment in tax free securities coming out of…

S.P. Corporation, Mumbai vs. A.C.I.T. RG. 11(1), Mumbai

In the result, appeal of the assessee for the Assessment Years

Bench: Shri G.S. Pannu, Hon'Ble & Shri C.N. Prasad, Hon'Ble

…assessee is having own funds much more than the investments made and therefore no part of the interest is disallowable in view of the decision of the Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. [313 ITR 340] and CIT v. HDFC Bank [366 ITR 505]. Ld. Counsel for the assessee further submitted that in so far as the disallowance under Rule 8D 2(iii) it was submitted that no expenditure is allocable to attain of exempt dividend income; and in any event the disallowance computed at ₹.3,59,091/- is arbitrary and grossly excessive. 47 ITA.No. 1865 & 1464 /MUM/2009 ITA.No. 2594 TO 2596, 6857…

S.P. Corporation, Mumbai vs. A.C.I.T.RG.11(1), Mumbai

In the result, appeal of the assessee for the Assessment Years

Bench: Shri G.S. Pannu, Hon'Ble & Shri C.N. Prasad, Hon'Ble

…assessee is having own funds much more than the investments made and therefore no part of the interest is disallowable in view of the decision of the Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. [313 ITR 340] and CIT v. HDFC Bank [366 ITR 505]. Ld. Counsel for the assessee further submitted that in so far as the disallowance under Rule 8D 2(iii) it was submitted that no expenditure is allocable to attain of exempt dividend income; and in any event the disallowance computed at ₹.3,59,091/- is arbitrary and grossly excessive. 47 ITA.No. 1865 & 1464 /MUM/2009 ITA.No. 2594 TO 2596, 6857…

S.P. Corporation, Mumbai vs. Asst CIT RG 11(1), Mumbai

In the result, appeal of the assessee for the Assessment Years

Bench: Shri G.S. Pannu, Hon'Ble & Shri C.N. Prasad, Hon'Ble

…assessee is having own funds much more than the investments made and therefore no part of the interest is disallowable in view of the decision of the Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. [313 ITR 340] and CIT v. HDFC Bank [366 ITR 505]. Ld. Counsel for the assessee further submitted that in so far as the disallowance under Rule 8D 2(iii) it was submitted that no expenditure is allocable to attain of exempt dividend income; and in any event the disallowance computed at ₹.3,59,091/- is arbitrary and grossly excessive. 47 ITA.No. 1865 & 1464 /MUM/2009 ITA.No. 2594 TO 2596, 6857…

ACIT 11(1), Mumbai vs. S.P. Corporation, Mumbai

In the result, appeal of the assessee for the Assessment Years

Bench: Shri G.S. Pannu, Hon'Ble & Shri C.N. Prasad, Hon'Ble

…assessee is having own funds much more than the investments made and therefore no part of the interest is disallowable in view of the decision of the Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. [313 ITR 340] and CIT v. HDFC Bank [366 ITR 505]. Ld. Counsel for the assessee further submitted that in so far as the disallowance under Rule 8D 2(iii) it was submitted that no expenditure is allocable to attain of exempt dividend income; and in any event the disallowance computed at ₹.3,59,091/- is arbitrary and grossly excessive. 47 ITA.No. 1865 & 1464 /MUM/2009 ITA.No. 2594 TO 2596, 6857…

S.P Corporation, Mumbai vs. ACIT RG 11(1), Mumbai

In the result, appeal of the assessee for the Assessment Years

Bench: Shri G.S. Pannu, Hon'Ble & Shri C.N. Prasad, Hon'Ble

…assessee is having own funds much more than the investments made and therefore no part of the interest is disallowable in view of the decision of the Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. [313 ITR 340] and CIT v. HDFC Bank [366 ITR 505]. Ld. Counsel for the assessee further submitted that in so far as the disallowance under Rule 8D 2(iii) it was submitted that no expenditure is allocable to attain of exempt dividend income; and in any event the disallowance computed at ₹.3,59,091/- is arbitrary and grossly excessive. 47 ITA.No. 1865 & 1464 /MUM/2009 ITA.No. 2594 TO 2596, 6857…

S.P Corporation, Mumbai vs. ACIT RG 11(1), Mumbai

In the result, appeal of the assessee for the Assessment Years

Bench: Shri G.S. Pannu, Hon'Ble & Shri C.N. Prasad, Hon'Ble

…assessee is having own funds much more than the investments made and therefore no part of the interest is disallowable in view of the decision of the Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. [313 ITR 340] and CIT v. HDFC Bank [366 ITR 505]. Ld. Counsel for the assessee further submitted that in so far as the disallowance under Rule 8D 2(iii) it was submitted that no expenditure is allocable to attain of exempt dividend income; and in any event the disallowance computed at ₹.3,59,091/- is arbitrary and grossly excessive. 47 ITA.No. 1865 & 1464 /MUM/2009 ITA.No. 2594 TO 2596, 6857…

S.P Corporation, Mumbai vs. ACIT RG 11(1), Mumbai

In the result, appeal of the assessee for the Assessment Years

Bench: Shri G.S. Pannu, Hon'Ble & Shri C.N. Prasad, Hon'Ble

…assessee is having own funds much more than the investments made and therefore no part of the interest is disallowable in view of the decision of the Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. [313 ITR 340] and CIT v. HDFC Bank [366 ITR 505]. Ld. Counsel for the assessee further submitted that in so far as the disallowance under Rule 8D 2(iii) it was submitted that no expenditure is allocable to attain of exempt dividend income; and in any event the disallowance computed at ₹.3,59,091/- is arbitrary and grossly excessive. 47 ITA.No. 1865 & 1464 /MUM/2009 ITA.No. 2594 TO 2596, 6857…

Prashant Jayantilal Patel, Mumbai vs. DCIT RG 4(2)(1), Mumbai

In the result, appeal of the assessee is partly allowed

Bench: Shri C.N. Prasad, Hon'Ble & Shri Rajesh Kumar, Hon'Ble

…extent of ₹.30.16 Crores whereas it had sufficient funds i.e. Capital to the extent of ₹.91.41 Crores. Therefore Ld. Counsel for the assessee submitted that, in view of the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. HDFC Bank Ltd [366 ITR 505] when the assessee is having sufficient interest free funds and also borrowed funds, the presumption is that the investments were made out of interest free funds and therefore no disallowance is required to be made. Ld. Counsel for the assessee further submits that identical issue was decided in the assessee’s own case for the Assessment Year 201…

DCIT 2(1)(1), Mumbai vs. Bank of Baroda, Mumbai

In the result, appeal of the assessee is partly allowed

Bench: Shri B.R. Baskaran & Shri Pawan Singhdcit-2(1)(1) M/S Bank Of Baroda Room No. 561, 5Th Floor, C-26, ‘G’ Block, Baroda Aayakar Bhavan, M.K. Road, Corporate Centre, Bandra Kurla Vs. Mumbai-400020 Complex, Bandra (E), Mumbai-400051 Pan: Aaacb1534F (Appellant) (Respondent) M/S Bank Of Baroda Dcit-2(1)(1) Room No. 561, 5Th Floor, C-26, ‘G’ Block, Baroda Corporate Centre, Bandra Kurla Aayakar Bhavan, M.K. Road, Vs. Mumbai-400020 Complex, Bandra (E), Mumbai-400051 Pan: Aaacb1534F (Appellant) (Respondent) Dcit-2(1)(1) M/S Bank Of Baroda Room No. 561, 5Th Floor, C-26, ‘G’ Block, Baroda Aayakar Bhavan, M.K. Road, Corporate Centre, Bandra Kurla Vs. Mumbai-400020 Complex, Bandra (E), Mumbai-400051 Pan: Aaacb1534F (Appellant) (Respondent) M/S Bank Of Baroda Dcit-2(1)(1) Vs. Room No. 561, 5Th Floor, C-26, ‘G’ Block, Baroda Corporate Centre, Bandra Kurla Aayakar Bhavan, M.K. Road

…rities purchased by it is not allowable business deduction. The Assessing Officer also concluded that assessee is not a trader in security and not entitled for claim of broken period interest expenses. 5. The Hon’ble Bombay High Court in CIT Vs. HDFC Bank Ltd 366 ITR 505 (Bom), while relying on the ratio laid down in its earlier decision in American Express International Banking Corporation Vs. CIT reported in 258 ITR 601 (Bom), which in turn, had distinguished the ratio laid down by the Hon’ble Supreme Court in Vijaya Bank Vs. CIT (supra) and the Hon’ble High Court of & 5020/Mum/2015- M/s Bank of Baroda Rajasth…

Dciat 14(3)(2), Mumbai vs. Sundaram Multipap Ltd, Mumbai

In the result, the appeal of the revenue is dismissed and the cross objection filed by the assessee is allowed

Bench: Shri B.R. Baskaran (Am)& Shri Pawan Singh (Jm)

…khs and at the end of the year stands at ` 1500.50 lakhs. Admittedly, the own funds available with the assessee is in far excess of the value of investments and hence, by applying the ratio laid down by Hon'ble Bombay High Court in the case of HDFC Bank Ltd. (366 ITR 505), no disallowance is called for out of interest expenditure. Accordingly, we uphold the view taken by the learned CIT(A). 8. We shall now take up the cross objection filed by the assessee. It is barred by limitation by 186 days. The Learned AR submitted that the assessee had made suo moto disallowance u/s. 14A of the Act. The assessee has, in fa…

Virgo Engineers Ltd, Mumbai vs. Addl CIT 10(3)

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

Bench: S/Shri B.R. Baskaran (Am) & Sandeep Gosain (Jm)

…The above fact shows that the own funds available with the assessee is in far excess of the value of investments and hence as per the decision rendered 3 M/s. Virgo Engineering Ltd. by Hon'ble Jurisdictional Bombay High Court in the case of HDFC Bank Ltd. (366 ITR 505), no disallowance out of interest expenditure is called for. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and direct the Assessing Officer to delete the disallowance under rule 8D(2)(iii) out of interest expenditure. We have already noticed that the assessee itself has disallowed a sum of ` 50,000/- under rule 8D…

Symphony International, Mumbai vs. Asst CIT 18(3), Mumbai

In the result, the appeal is partly allowed

Bench: Shri Joginder Singh () & Shri N.K. Pradhan () Assessment Year: 2012-13 M/S Symphony International Asst. Commissioner Of 17/19, Shamaldas Gandhi Vs. Income Tax-18(3), Marg, Princess Street, Near C-11, 6Th Floor, Room Mangaldas Market, Marine No. 602, Bandra Kurla Lines (E), Complex, Bandra, Mumbai-400002. Mumbai-400051. Pan No. Aamfs2805B Appellant Respondent Assessee By : Mr. Mukesh B. Advani, Ar Revenue By : Mr. Saurabh Rai, Dr Date Of Hearing : 19/03/2018 Date Of Pronouncement : 18/04/2018

…nt year stands at Rs.32,136,138/- whereas the investments were of Rs.7,583,012/-. In HDFC Bank Ltd. vs. DCIT [2016] 67 taxmann.com 42 M/s Symphony International 4 (Bom), the Hon'ble Bombay High Court referring to the decision in CIT vs. HDFC Bank Ltd. [2014] 366 ITR 505 (Bom) and CIT v. Reliance Utilities & Power Ltd. [2009] 313 ITR 340 (Bom) held as under : “15. It is clear that for the first time in the case of HDFC Bank Ltd. (supra) that this Court took a view that the presumption which has been laid down in Reliance Utilities & Power Ltd. (supra) with regard to investment in tax free securities coming out of…