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 367,154 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.

The Laxmi Salt Co. Ltd., Kolkata vs. Income Tax Officer, Ward - 4(1), Kolkata

In the result, the appeal of assessee is allowed

ITA 2434/KOL/2013[2009-10]Status: DisposedITAT Kolkata23 Sept 2016AY 2009-10

Bench: Shri M. Balaganesh, Am & Shri K. Narasimha Chary, Jm]

For Appellant: Shri N. Acharya Baduri, ARFor Respondent: Shri S.M. Das, JCIT, Sr. DR
Section 143(3)Section 14A

…1 The Laxmi Salt Co. Ltd. AY 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA [Before Shri M. Balaganesh, AM & Shri K. Narasimha Chary, JM] I.T.A No. 2434/Kol/2013 Assessment Year: 2009-10 The Laxmi Salt Co. Ltd. Vs. Income-tax Officer, Wd-4(1), Kolkata (PAN: AAACT9721G) (Appellant) (Respondent) Date of hearing: 28.07.2016 Date of pronouncement: 23.09.2016 For the Appellant: Shri N. Acharya Baduri, AR For the Respondent: Shri S.M. Das, JCIT, Sr. DR ORDER Per Shri K. Narasimha Chary, JM: This appeal by assessee is arising out of order of CIT(A)-IV, Kolkata vide Appeal No. 220/CIT(A)-IV/11-12 dat…

City Centre Mall Nashik P.Ltd, Mumbai vs. DCIT 6(2) (Now Asst CIT 6(2)), Mumbai

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes

ITA 1783/MUM/2015[2010-11]Status: DisposedITAT Mumbai23 Sept 2016AY 2010-11

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

Section 14ASection 43B

…mmediately required for mall construction purposes, was invested in mutual funds in order to earn dividend income. Accordingly it was submitted that there is no requirement to make disallowance out of interest expenditure as held in the case of HDFC Bank Ltd (366 ITR 505). With regard to the disallowance to be made out of administrative expenses, the assessee has submitted that the assessee has made investment only in SBI mutual fund and hence the expenses may be estimated @ Rs.50/- per transaction. We are of the view that the claim of the assessee that the investment was made only of Share application money need…

Vinati Oprganics Ltd, Mumbai vs. Addl CIT 8(3), Mumbai

In the result, assessee’s appeal stands partly allowed for the statistical purpose and that of the revenue stands dismissed

ITA 7177/MUM/2014[2011-12]Status: DisposedITAT Mumbai22 Sept 2016AY 2011-12

Bench: Shri Rajendra & Shri Amit Shukla

Section 1Section 10BSection 143(3)Section 14ASection 1OSection 40

…from the decisions of Hon’ble jurisdictional High Court in the cases of CIT v Reliance Utilities & Powers Ltd, reported in [2009] 313 ITR 340; and CIT vs. HDFC Bank, 7 वन"त ओग"नी"स "ल"मटेड Vanati Oprganics Ltd ITA 7177/Mum/2014 ITA 7776/Mum/2014 reported in 366 ITR 505. The Hon’ble High Court has reiterated that, if assessee has surplus/ interest free funds in the form of reserves and share capital which exceeds the investments, then presumption has to be drawn in favour of the assessee that the investments has been made from the coffers of surplus/interest free funds and not from the borrowed funds. Thus, resp…

DCIT, Circle - 8, Kolkata vs. M/S. Tata Steel Processing & Distribution Limited, Kolkata

In the result, both appeals of Revenue are dismissed and that of assessee’s appeal is partly allowed for statistical purpose and CO of assessee is dismissed as infructuous

ITA 379/KOL/2012[2008-09]Status: DisposedITAT Kolkata21 Sept 2016AY 2008-09

Bench: Shri Waseem Ahmed & Shri K.Narasimha Charyassessment Year:2006-07

Section 143(2)Section 143(3)Section 40

…the mixed account. Therefore, the CIT(A) and the learned Tribunal both were right in presuming that the advance was made out from the assessee’s own fund eligible for the benefit of s. 36(1)(iii).” Similarly we also rely in the case of CIT Vs. HDFC Bank Ltd. 366 ITR 505 where the Hon’ble Bombay High Court has held as under : “The finding of fact given by the ITAT in the present case is that the Assessee's own funds and other non-interest bearing funds were more than the investment in the tax-free securities. This factual position is not one that is disputed. The ITAT therefore held that there was no basis for de…

Tata Steel Processing and Distribution Ltd., Kolkata vs. DCIT, Circle - 8, Kolkata

In the result, both appeals of Revenue are dismissed and that of assessee’s appeal is partly allowed for statistical purpose and CO of assessee is dismissed as infructuous

ITA 303/KOL/2012[2008-09]Status: DisposedITAT Kolkata21 Sept 2016AY 2008-09

Bench: Shri Waseem Ahmed & Shri K.Narasimha Charyassessment Year:2006-07

Section 143(2)Section 143(3)Section 40

…the mixed account. Therefore, the CIT(A) and the learned Tribunal both were right in presuming that the advance was made out from the assessee’s own fund eligible for the benefit of s. 36(1)(iii).” Similarly we also rely in the case of CIT Vs. HDFC Bank Ltd. 366 ITR 505 where the Hon’ble Bombay High Court has held as under : “The finding of fact given by the ITAT in the present case is that the Assessee's own funds and other non-interest bearing funds were more than the investment in the tax-free securities. This factual position is not one that is disputed. The ITAT therefore held that there was no basis for de…

DCIT, Circle - 8, Kolkata vs. M/S. Tata Ryerson Limited, Kolkata

In the result, both appeals of Revenue are dismissed and that of assessee’s appeal is partly allowed for statistical purpose and CO of assessee is dismissed as infructuous

ITA 1124/KOL/2010[2006-07]Status: DisposedITAT Kolkata21 Sept 2016AY 2006-07

Bench: Shri Waseem Ahmed & Shri K.Narasimha Charyassessment Year:2006-07

Section 143(2)Section 143(3)Section 40

…the mixed account. Therefore, the CIT(A) and the learned Tribunal both were right in presuming that the advance was made out from the assessee’s own fund eligible for the benefit of s. 36(1)(iii).” Similarly we also rely in the case of CIT Vs. HDFC Bank Ltd. 366 ITR 505 where the Hon’ble Bombay High Court has held as under : “The finding of fact given by the ITAT in the present case is that the Assessee's own funds and other non-interest bearing funds were more than the investment in the tax-free securities. This factual position is not one that is disputed. The ITAT therefore held that there was no basis for de…

Ansh Merchandise P.Ltd, Mumbai vs. DCIT 5(2), Mumbai

ITA 411/MUM/2013[2008-09]Status: DisposedITAT Mumbai19 Sept 2016AY 2008-09

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.411/Mum/2013 ("नधा"रण वष" / Assessment Year : 2008-08) Ansh Merchandise Private Dcit – 5(2), बनाम/ Limited, 11, 2Nd Floor, Aayakar Bhavan, V. 84, Appollo House, Mumbai – 400 020. Bombay Samachar Marg, Fort, Mumbai-400 023 "थायी लेखा सं./Pan : Aabcn8176E (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

For Respondent: Shri A. Ramachandran
Section 143(3)

…Income Tax Rules, 1962 in accordance with our above directions and also keeping in view decisions of Hon’ble Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. (2009) 313 ITR 340(Bom HC) and in the case of HDFC Bank Ltd. v. DCIT (2014) 366 ITR 505(Bom HC) and decision of Hon'ble Bombay High Court in writ petition in HDFC Bank Limited v. DCIT(2016) 67 taxmann.com 42(Bom. HC) . We order accordingly. 17. Next Issue in this appeal is with respect to treatment by Revenue of short term capital loss incurred by the assessee on sale of land at Hasteda(Rajasthan) amounting to Rs.1,14,27,420/- as a…

Ansh Merchandise P.Ltd, Mumbai vs. Addl CIT 5(2), Mumbai

ITA 398/MUM/2013[2009-10]Status: DisposedITAT Mumbai19 Sept 2016AY 2009-10

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.411/Mum/2013 ("नधा"रण वष" / Assessment Year : 2008-08) Ansh Merchandise Private Dcit – 5(2), बनाम/ Limited, 11, 2Nd Floor, Aayakar Bhavan, V. 84, Appollo House, Mumbai – 400 020. Bombay Samachar Marg, Fort, Mumbai-400 023 "थायी लेखा सं./Pan : Aabcn8176E (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

For Respondent: Shri A. Ramachandran
Section 143(3)

…Income Tax Rules, 1962 in accordance with our above directions and also keeping in view decisions of Hon’ble Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. (2009) 313 ITR 340(Bom HC) and in the case of HDFC Bank Ltd. v. DCIT (2014) 366 ITR 505(Bom HC) and decision of Hon'ble Bombay High Court in writ petition in HDFC Bank Limited v. DCIT(2016) 67 taxmann.com 42(Bom. HC) . We order accordingly. 17. Next Issue in this appeal is with respect to treatment by Revenue of short term capital loss incurred by the assessee on sale of land at Hasteda(Rajasthan) amounting to Rs.1,14,27,420/- as a…

M/S Indian Farmers Fertiliser Cooperative Ltd., New Delhi vs. Pr CIT, New Delhi

In the result, the Appeal filed by the Assessee stands allowed

ITA 2487/DEL/2016[2010-11]Status: DisposedITAT Delhi19 Sept 2016AY 2010-11

Bench: Shri H.S. Sidhu & Shri J.S. Reddy

For Appellant: Sh. Vijay Ranjan, Adv. Sh. Vartik RFor Respondent: Sh. A.K. Saroha, CIT(DR)
Section 263Section 36(1)(iii)

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. No. 2487/Del/2016 A.Y. : 2010-11 M/s Indian Farmers Fertilizers VS. PR. CIT, DELHI-11 ROOM NO. 2402, 24TH FLOOR, Cooperative Ltd., IFFCO Sadan, C-1, District Centre, E-2, CIVIC CENTRE, Saket Place, NEW DELHI New Delhi – 110 017 (PAN: AAAAI0050M (APPELLANT) (RESPONDENT) Assessee by : Sh. Vijay Ranjan, Adv. Sh. Vartik R. Choksi, CA & Ms. IRA R. Kapoor, CA, Sh. Atul Chabbra, CA Department by : Sh. A.K. Saroha, CIT(DR) Date of Hearing : 31-08-2016 Date of Order : 19…

DCIT RG. 3(1), Mumbai vs. M/S. I.C.I.C.I. Ltd., Mumbai

In the result, assessee’s appeals as well as Revenue’s appeals, all are allowed partly for statistical purposes as indicated above

ITA 4825/MUM/2004[1999-2000]Status: DisposedITAT Mumbai06 Sept 2016AY 1999-2000

Bench: Sri Mahavir Singh, Jm & Sri Rajesh Kumar, Am

…interest expenses to be allocated as the investment is made out of assessee’s own funds. For this, the learned Counsel for the assessee relied upon the decision of the Hon’ble Bombay High Court in ITA No.4824 & 4825/Mum/2004 the case of CIT Vs. HDFC Bank Ltd. 366 ITR 505 (Bom.) and also in the case of CIT Vs. Reliance Utilities & Power Ltd. 313 ITR 314 (Bom.). It was contended by the learned Counsel for the assessee that the entire interest expenses are to be allowed as expenses and no interest expenses to be allocated as the investment is made out of assessee’s own funds. She referred to the Tribunal’s decision…

DCIT RG. 3(1), Mumbai vs. M/S. I.C.I.C.I. Ltd., Mumbai

In the result, assessee’s appeals as well as Revenue’s appeals, all are allowed partly for statistical purposes as indicated above

ITA 4824/MUM/2004[1997-1998]Status: DisposedITAT Mumbai06 Sept 2016AY 1997-1998

Bench: Sri Mahavir Singh, Jm & Sri Rajesh Kumar, Am

…interest expenses to be allocated as the investment is made out of assessee’s own funds. For this, the learned Counsel for the assessee relied upon the decision of the Hon’ble Bombay High Court in ITA No.4824 & 4825/Mum/2004 the case of CIT Vs. HDFC Bank Ltd. 366 ITR 505 (Bom.) and also in the case of CIT Vs. Reliance Utilities & Power Ltd. 313 ITR 314 (Bom.). It was contended by the learned Counsel for the assessee that the entire interest expenses are to be allowed as expenses and no interest expenses to be allocated as the investment is made out of assessee’s own funds. She referred to the Tribunal’s decision…

Icici Bank Ltd., Mumbai vs. DCIT Range 3(1)

In the result, assessee’s appeals as well as Revenue’s appeals, all are allowed partly for statistical purposes as indicated above

ITA 4589/MUM/2004[1998-99]Status: DisposedITAT Mumbai06 Sept 2016AY 1998-99

Bench: Sri Mahavir Singh, Jm & Sri Rajesh Kumar, Am

…interest expenses to be allocated as the investment is made out of assessee’s own funds. For this, the learned Counsel for the assessee relied upon the decision of the Hon’ble Bombay High Court in ITA No.4824 & 4825/Mum/2004 the case of CIT Vs. HDFC Bank Ltd. 366 ITR 505 (Bom.) and also in the case of CIT Vs. Reliance Utilities & Power Ltd. 313 ITR 314 (Bom.). It was contended by the learned Counsel for the assessee that the entire interest expenses are to be allowed as expenses and no interest expenses to be allocated as the investment is made out of assessee’s own funds. She referred to the Tribunal’s decision…

DCIT Cir 6(1), Mumbai vs. Amar Tea P. L Td, Mumbai

In the result, all the appeals filed by the revenue are dismissed

ITA 4475/MUM/2014[2010-11]Status: DisposedITAT Mumbai02 Sept 2016AY 2010-11

Bench: Shri B.R. Baskaran (Am) & Shri Amit Shukla (Jm)

…able with the assessee is in excess of the investments, then there is no requirement to make any disallowance of interest expenditure under Rule 8D(2)(ii) of the I.T Rules as per the decision of Hon’ble Bombay High Court rendered in the case of HDFC Bank Ltd (366 ITR 505). Since the details of interest free funds available with the assessee are not fully brought on record, we are of the view that this issue requires examination at the end of the AO. Besides the above, the assessee has placed reliance on certain other case laws also. Hence we prefer to set aside the issue relating to the disallowance made under Ru…

Atur India P Ltd, Mumbai vs. ACIT Cir 6(1), Mumbai

In the result, all the appeals filed by the assessee are treated as allowed

ITA 865/MUM/2013[2008-09]Status: DisposedITAT Mumbai02 Sept 2016AY 2008-09

Bench: Shri B.R. Baskaran (Am) & Shri Sanjay Garg (Jm)

Section 14A

…i) of the I.T. Rules, the Learned AR submitted that the interest free funds available with the assessee are in far in excess of investments made and hence as per the decision rendered by Hon'ble Jurisdictional High Court in the case of CIT Vs. HDFC Bank Ltd. (366 ITR 505), no disallowance u/r. 8D(2)(ii) is called for. In this connection, he also drew our attention to the copies of the balance- sheets of the three years under consideration. 5. We have heard learned Departmental Representative and perused the record. We find merit in the contentions of the assessee. For the sake of convenience, we extract below de…

Atur India P.Ltd, Mumbai vs. Asst CIT Cir 6(1), Mumbai

In the result, all the appeals filed by the assessee are treated as allowed

ITA 6403/MUM/2013[2010-11]Status: DisposedITAT Mumbai02 Sept 2016AY 2010-11

Bench: Shri B.R. Baskaran (Am) & Shri Sanjay Garg (Jm)

Section 14A

…i) of the I.T. Rules, the Learned AR submitted that the interest free funds available with the assessee are in far in excess of investments made and hence as per the decision rendered by Hon'ble Jurisdictional High Court in the case of CIT Vs. HDFC Bank Ltd. (366 ITR 505), no disallowance u/r. 8D(2)(ii) is called for. In this connection, he also drew our attention to the copies of the balance- sheets of the three years under consideration. 5. We have heard learned Departmental Representative and perused the record. We find merit in the contentions of the assessee. For the sake of convenience, we extract below de…

ITO 10(2)(1), Mumbai vs. Jpa Solutions P.Ltd, Mumbai

The appeal of the Revenue is dismissed

ITA 4640/MUM/2015[2011-12]Status: DisposedITAT Mumbai01 Sept 2016AY 2011-12

Bench: Shri Joginder Singh, Assessment Year:2011-12 Income Tax Officer-10(2)(1), M/S Jpa Solutions Pvt. Ltd. Room No.408, 4Th Floor, 102, Man Gouse, S.V. Road, बनाम/ Aayakar Bhavan, Vile Parle (West), Vs. M.K. Marg, Mumbai-400056 Mumbai-400020 "नधा"रती / Assessee राज"व / Revenue P.A. No.Aabcj7151K

Section 14A

…to be made. In para 1.3.5 of the impugned order, there is uncontroverted finding by the Ld. Commissioner of Income Tax (Appeal) that the assessee proved the sufficiency of own funds for making the investment, thus, the decision in CIT vs HDFC Bank Ltd. (2014) 366 ITR 505 (Bom.), CIT vs Torent Power Ltd. (2014) 363 ITR 474 (Guj.), DIT vs BNP Parias SA (2013) 214 taxman 548 (Bom.) supports the case of the assessee. Considering the totality of facts, factual finding recorded by the First Appellate Authority and in the absence of any contrary material brought on record by the Revenue and in the light of foregoing dis…

Anita Dalal, Mumbai vs. A.C.I.T.12(1), Mumbai

In the result, the appeal filed by the assessee is treated as partly allowed for statistical purposes

ITA 6483/MUM/2012[2008-09]Status: DisposedITAT Mumbai26 Aug 2016AY 2008-09

Bench: Shri B.R. Baskaran (Am) & Shri Sanjay Garg (Jm)

Section 14ASection 234B

…est free funds available with the assessee is in far excess of the investments made and hence no disallowance of interest expenditure is called for, in view of the binding decision of Hon’ble jurisdictional Bombay High Court rendered in the case of HDFC Bank (366 ITR 505). With regard to the disallowance of proportionate administrative expenses made under Rule 8D(2)(iii) of the I.T Rules, the Ld A.R submitted that the AO has taken the value of investments made in the group companies, Public provident fund etc. for working out the disallowance. 5. On the contrary, the Ld D.R placed strong reliance on the order pa…

Saurashtra Fuels P.Ltd, Mumbai vs. Asst CIT Cir 3(3), Mumbai

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

ITA 7452/MUM/2013[2010-11]Status: DisposedITAT Mumbai25 Aug 2016AY 2010-11

Bench: Shri Shailendra Kumar Yadav, Jm & Shri Rajesh Kumar, Am आयकर अपीऱ सं./I.T.A. No.7452/Mum/2013 (ननधधारण वषा / Assessment Year : 2010-11) बनधम/ M/S Saurashtra Fuels Pvt Ltd- Asstt Commissioner Of Income 93-C, Mittal Tower, Tax, Circle-3(3), Vs. Nariman Point, Room No.609, Aayakar Bhavan, Mumbai-400021 Mumbai-400020

Section 10(34)Section 115JSection 143(1)Section 143(2)Section 14A

…आयकर अपीऱीय अधिकरण, म ुंबई न्यायपीठ “ई” म ुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJESH KUMAR, AM आयकर अपीऱ सं./I.T.A. No.7452/Mum/2013 (ननधधारण वषा / Assessment Year : 2010-11) बनधम/ M/s Saurashtra Fuels Pvt Ltd- Asstt Commissioner of Income 93-C, Mittal Tower, Tax, Circle-3(3), Vs. Nariman Point, Room No.609, Aayakar Bhavan, Mumbai-400021 Mumbai-400020 स्थधयी ऱेखध सं./ PAN : AAACS7271G अपीऱार्थी ओर से / Assessee by Shri B V Jhaveri प्रत्यर्थी की ओर से/Revenue by Shri Manjunatha Swamy सुनवाई की तारीख / Date of Hearing : 9.06.2016 घोषणा की ता…

Hdfc Bank Td, Mumbai vs. Asst CIT 2(3), Mumbai

In the result, both the appeals are allowed in part, in terms indicated hereinabove

ITA 5481/MUM/2014[2006-07]Status: DisposedITAT Mumbai24 Aug 2016AY 2006-07
For Appellant: Shri Yogesh A. TharFor Respondent: Shri Abhishek Sharma
Section 143(3)Section 14A

…e funds are more than the investment made in tax-free securities, it shall be presumed that such investments is made from interest free funds. This ITAT decision has been subsequently affirmed by the Hon’ble Bombay High Curt in assessee’s own case reported in 366 ITR 505. However, the department has not filed an appeal before the Hon’ble Supreme Court against the said High Court’s order. 6. It is clear from the order of ITAT & High Court that if the non-interest bearing funds (i.e. Capital, Reserves, and Current Account Deposits) are more than the investment in tax free securities, no disallowance of interest is…

Hdfc Bank Td, Mumbai vs. Asst CIT 2(3), Mumbai

In the result, both the appeals are allowed in part, in terms indicated hereinabove

ITA 5480/MUM/2014[2007-08]Status: DisposedITAT Mumbai24 Aug 2016AY 2007-08
For Appellant: Shri Yogesh A. TharFor Respondent: Shri Abhishek Sharma
Section 143(3)Section 14A

…e funds are more than the investment made in tax-free securities, it shall be presumed that such investments is made from interest free funds. This ITAT decision has been subsequently affirmed by the Hon’ble Bombay High Curt in assessee’s own case reported in 366 ITR 505. However, the department has not filed an appeal before the Hon’ble Supreme Court against the said High Court’s order. 6. It is clear from the order of ITAT & High Court that if the non-interest bearing funds (i.e. Capital, Reserves, and Current Account Deposits) are more than the investment in tax free securities, no disallowance of interest is…