CIT v. HDFC Bank Ltd.

Ashok Apparels P.Ltd, Mumbai vs. DCIT Cen Cir 47, Mumbai

In the result, grounds No

Bench: Shri Amit Shukla & Shri Ashwani Taneja

…ssessee that investments were made from the coffers of interest free funds only, is squarely covered by the decision of Hon’ble Bombay High Court in the case of Reliance Utilities and Power Ltd (supra) which also reiterated in the case of CIT v HDFC Bank Ltd, 366 ITR 505. However, he submitted that it was only in 2007-08, there would be deficiency, because investment have exceeded the interest free funds and, therefore, any interest if at all should be disallowed then the same should be on account of the excess investment made over and above the interest free funds. He further pointed out that, in any case, if at…

Ashok Apparels P.Ltd, Mumbai vs. DCIT Cen Cir 47, Mumbai

In the result, grounds No

Bench: Shri Amit Shukla & Shri Ashwani Taneja

…ssessee that investments were made from the coffers of interest free funds only, is squarely covered by the decision of Hon’ble Bombay High Court in the case of Reliance Utilities and Power Ltd (supra) which also reiterated in the case of CIT v HDFC Bank Ltd, 366 ITR 505. However, he submitted that it was only in 2007-08, there would be deficiency, because investment have exceeded the interest free funds and, therefore, any interest if at all should be disallowed then the same should be on account of the excess investment made over and above the interest free funds. He further pointed out that, in any case, if at…

Ashok Apparels P.Ltd, Mumbai vs. DCIT Cen Cir 47, Mumbai

In the result, grounds No

Bench: Shri Amit Shukla & Shri Ashwani Taneja

…ssessee that investments were made from the coffers of interest free funds only, is squarely covered by the decision of Hon’ble Bombay High Court in the case of Reliance Utilities and Power Ltd (supra) which also reiterated in the case of CIT v HDFC Bank Ltd, 366 ITR 505. However, he submitted that it was only in 2007-08, there would be deficiency, because investment have exceeded the interest free funds and, therefore, any interest if at all should be disallowed then the same should be on account of the excess investment made over and above the interest free funds. He further pointed out that, in any case, if at…

Mahendra Brothers Exports Pvt. Ltd., Mumbai vs. Addl. C.I.T.5(2), Mumbai

Appeal stands dismissed

Bench: Shri G S Pannu & Shri Amit Shukla

…ings from the directors, which far exceeded the investment made by the assessee. Hence, no disallowance of interest should be made in the light of the decision of CIT vs. Reliance Utilities and Power Ltd., [2009] 313 ITR 340 (Bom) and CIT vs. HDFC Bank {2014} 366 ITR 505 (BOM). Regarding disallowance of indirect expenditure of Rs.11,85,278/- worked in accordance with Rule 8D(2)(iii), he submitted that, firstly, the most of the investments were made by way of ‘strategic investment’ in subsidiaries and associated companies and, therefore, it cannot be held that they were meant for earning of exempt income and secon…

DCIT 5(2), Mumbai vs. Mahendra Brothers Exports P. Ltd, Mumbai

Appeal stands dismissed

Bench: Shri G S Pannu & Shri Amit Shukla

…ings from the directors, which far exceeded the investment made by the assessee. Hence, no disallowance of interest should be made in the light of the decision of CIT vs. Reliance Utilities and Power Ltd., [2009] 313 ITR 340 (Bom) and CIT vs. HDFC Bank {2014} 366 ITR 505 (BOM). Regarding disallowance of indirect expenditure of Rs.11,85,278/- worked in accordance with Rule 8D(2)(iii), he submitted that, firstly, the most of the investments were made by way of ‘strategic investment’ in subsidiaries and associated companies and, therefore, it cannot be held that they were meant for earning of exempt income and secon…

Fedex Securities Ltd, Mumbai vs. DCIT (OSD) Cir 3(1), Mumbai

In the result, appeal of the assessee is allowed

Bench: Shri Amit Shukla & Shri Ashwani Taneja

…Once that is so, then presumption is that, such investments have been made with interest-free funds/excess funds available with the assessee. This proposition now stands settled by the Hon’ble Bombay High Court in the case of CIT vs HDFC Bank Ltd, reported in 366 ITR 505 wherein, the Hon’ble Court has reiterated the ratio and principle laid down in CIT vs Reliance Utilities and Power Ltd, reported in 313 ITR 340. Apart from above, from the perusal of the audited accounts and profit and loss account, it is seen that, assessee has earned huge interest income of Rs.1,46,60,540/- as against the interest expenditure o…

Dystar India P.Ltd, Navi Mumbai vs. DCIT 8(1), Mumbai

In the result appeal filed by the assessee for A

Bench: Shri B.R.Baskaran (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2010-11

…dividend, section14A of the Act is not applicable. The investment in question was made by the assessee out of the surplus funds available during the relevant year and as per the law laid down by the Hon’ble jurisdictional High Court in CIT vs. HDFC Bank Ltd. 366 ITR 505 (Bom.) and CIT vs. Reliance Utilities 313 ITR 430 no disallowance is to be made in the assessee’s case. As per the decisions rendered by the Mumbai Tribunal in JM Financial Ltd. vs. AICT 2014 TIOL 2002 (Mum) and Garware Wall Rops Ltd. vs. ACIT 65 SOT 86 (Mum) the transaction being a strategic investment in the shares of assessee’s subsidiary comp…

Jewelex India P.Ltd, Mumbai vs. Addl CIT RG 3(2), Mumbai

In the result, appeal of the assessee is allowed, as above

Bench: Shri G.S.Pannu& Shri Sanjay Garg.

…ent of the Hon'ble Bombay High Court in the case of CIT vs. Reliance Utilities & Power Ltd., 313 ITR 340 (Bom). The said presumption was applied by the Hon'ble Bombay High Court while interpreting section 14A of the Act in the case of CIIT vs. HDFC Bank Ltd., 366 ITR 505(Bom). Such a position has been further endorsed by the Hon'ble Bombay High Court subsequently in the case of the HDFC Bank Ltd. vs. DCIT reported in 383 ITR 529 (Bom). Thus, considering the factual matrix brought out by the Ld. Representative for the assessee, it is quite clear that the investments in question can be presumed to have been made ou…

Citicorp Finance P.Ltd, Mumbai vs. Addl CIT RG 10(1), Mumbai

…xpenditure to earn the exempt income. Alternatively,it was argued that the disallowance should be restricted to 1% of the exempt income.He referred to the cases of HDFC Bank Ltd. (Writ Petition 1753 of 2016), HDFC Bank Ltd.(ITA/374/Mum/2012),HDFC Bank Limited(366 ITR 505),Reliance Utilities and Power Ltd.(313 ITR 340), Suzlon Energy Ltd. (354 ITR 630),Hero Cycles Ltd.(323 ITR 518),Catholic Syrian Bank Ltd. & Ors.(237CTR 164),Videocon Industries Ltd.(ITA/ 6145/ Mum/2012,1728/Mum/2014 & 1729/Mum/2014 order dt.06.02.2015),Shoppers Stop (ITA /1448 & 4475/Mum/2010 order dated 30.08.2011) in support of his argument tha…

Addl CIT 10-(1), Mumbai vs. Citicorp Finance (I) Ltd, Mumbai

…xpenditure to earn the exempt income. Alternatively,it was argued that the disallowance should be restricted to 1% of the exempt income.He referred to the cases of HDFC Bank Ltd. (Writ Petition 1753 of 2016), HDFC Bank Ltd.(ITA/374/Mum/2012),HDFC Bank Limited(366 ITR 505),Reliance Utilities and Power Ltd.(313 ITR 340), Suzlon Energy Ltd. (354 ITR 630),Hero Cycles Ltd.(323 ITR 518),Catholic Syrian Bank Ltd. & Ors.(237CTR 164),Videocon Industries Ltd.(ITA/ 6145/ Mum/2012,1728/Mum/2014 & 1729/Mum/2014 order dt.06.02.2015),Shoppers Stop (ITA /1448 & 4475/Mum/2010 order dated 30.08.2011) in support of his argument tha…

Grabal Alok Impex Ltd, Mumbai vs. Addl CIT RG 6(3), Mumbai

In the result appeal of the assessee is allowed in part

…or making incremental investments during the year of Rs 5.24 crores in Alok Industries Limited (excluding share application money converted into shares during the year. In view of the decision of Hon’ble Jurisdictional High Court in the case of HDFC Bank Ltd. 366 ITR 505 and Reliance Utilities & Power Ltd., 313 ITR 340 as well as various judicial pronouncements referred by ld. AR, no disallowance on account of interest is to be made u/s.14A, when the investments are made from own funds. Accordingly, we direct the AO not to make any disallowance on account of interest. 19. In view of the above disallowance u/s.14A…

ACIT Cir. 8(1), Mumbai vs. M/S. Afcons Infrastructure Ltd., Mumbai

In the result, Department’s appeal is dismissed

Bench: Shri Jason P. Boaz, Accountant Mbmer & Shri Saktijit Dey

…st expenditure can be made. In this context, he referred to the fund flow statement for the F.Y. 1996–97 to 2000–01. In support of his contention, he relied upon the following decisions:– i) HDFC Bank v/s DCIT, 383 ITR 529 (Bom.); ii) CIT v/s HDFC Bank Ltd., 49 Taxmann.com 335; and iii) CIT v/s Reliance Utilities & Power Ltd., 313 ITR 340 (Bom.). 18. As far as the investment in SSS Electricals India Ltd. amounting to ` 4.80 lakh is concerned, the learned Sr. Counsel referring to the 18 Afcons Infrastructure Limited statement showing year–wise investment and increase / decrease in loan submitted that in the fina…

ACIT Cir 6(3), Mumbai vs. Laxmi Ventures (India) Ltd, Mumbai

In the result, the appeal of the assessee is partly allowed while the Revenue’s appeal is allowed

Bench: Shri Sanjay Arora, Am & Shri Pawan Singh, Jm आयकर अपील सं./I.T.A. No. 4303/Mum/2009 ("नधा"रण वष" / Assessment Year: 2005-06) Laxmi Ventures (India) Ltd. Asst. Cit-6(3), बनाम/ 36/40, Mahalaxmi Bridge Arcade, Aaykar Bhavan, M. K. Marg, Vs. Mahalaxmi, Mumbai-400 034 Churchgate, Mumbai-400 020 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaacl 1082 G (Assessee) : (Revenue) आयकर अपील सं./I.T.A. No. 4243/Mum/2009 ("नधा"रण वष" / Assessment Year: 2005-06) Asst. Cit-6(3), Laxmi Ventures (India) Ltd. बनाम/ Aaykar Bhavan, M. K. Marg, 36/40, Mahalaxmi Bridge Arcade, Vs. Churchgate, Mumbai-400 020 Mahalaxmi, Mumbai-400 034 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaacl 1082 G (Revenue) (Assessee) : Assessee By : Shri Haridas Bhatt : Shri S. R. Singh Revenue By सुनवाई क" तार"ख / : 20.4.2016 Date Of Hearing घोषणा क" तार"ख / : 30.6.2016 Date Of Pronouncement आदेश / O R D E R Per Sanjay Arora, A. M.: These Are Cross Appeals, I.E. By The Assessee & The Revenue, Arising Out Of The Order By The Commissioner Of Income Tax(Appeals)-Vi, Mumbai (‘Cit(A)’For Short) Dated 20.5.2009, Partly Allowing The Assessee’S Appeal Contesting Its’ Assessment Under Section 143(3) Of The Income Tax Act, 1961 (‘The Act’ Hereinafter) Dated 31.12.2007 For The Assessment Year (A.Y.) 2005-06. 2

…2.22 lakhs at the beginning of the year, and which stands increased by Rs.1.40 crores during the year. The decision by the Hon’ble jurisdictional High Court in CIT 3 ITA Nos. 4303 & 4243/M/09 (A.Y. 05-06) Laxmi Ventures (India) Ltd. vs. HDFC Bank Ltd. [2014] 366 ITR 505 (Bom), holding that where sufficient interest-free capital is available, the same must be set off or allocated against investment, is thus clearly applicable in the facts and circumstances of the case. As regards administrative expenditure, the disallowance for the same has been restricted to the ratio (0.5% of the investment) in terms of rule 8D…

Khandelwal Laboratories P.Ltd, Mumbai vs. CIT 6, Mumbai

In the result, both the assessee’s appeals are allowed in part in terms indicated herein above

…e was sufficient to cover up the value of the investments, hence no interest (A.Ys. 2009-10 & 2010-11) Khandelwal Laboratories Pvt. Ltd. vs. CIT disallowance can be made as per the decision of Hon'ble jurisdictional High Court in the case of CIT vs. HDFC Bank 366 ITR 505 and Reliance Utility reported in 178 Taxman 135. We direct accordingly. 44. With regard to the disallowance of clinical support expenses, as per the reasoning given in A.Y. 2009-10, we do not find any merit for applying the CBDT Circular No. 5/2012 dated 01.8.2012 to the A.Y. 2010-11 under consideration. Following the reasoning given herein above…

Khandelwal Laboratories P. Ltd, Mumbai vs. CIT 6, Mumbai

In the result, both the assessee’s appeals are allowed in part in terms indicated herein above

…e was sufficient to cover up the value of the investments, hence no interest (A.Ys. 2009-10 & 2010-11) Khandelwal Laboratories Pvt. Ltd. vs. CIT disallowance can be made as per the decision of Hon'ble jurisdictional High Court in the case of CIT vs. HDFC Bank 366 ITR 505 and Reliance Utility reported in 178 Taxman 135. We direct accordingly. 44. With regard to the disallowance of clinical support expenses, as per the reasoning given in A.Y. 2009-10, we do not find any merit for applying the CBDT Circular No. 5/2012 dated 01.8.2012 to the A.Y. 2010-11 under consideration. Following the reasoning given herein above…

Revashankar Gems Ltd, Mumbai vs. Asst CIT 5(3), Mumbai

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

Bench: Shri Joginder Singh & Shri Ashwani Taneja

…, the ld. counsel for the assessee contended that identical issue arose for consideration for Assessment year 2008-09, wherein, the Tribunal send these issues to the file of Ld. Assessing Officer. Reliance was placed upon the decision in CIT vs HDFC Bank Ltd. 366 ITR 505 (Bom.) and CIT vs. Reliance Utilities Power Ltd. [2009] 313 ITR 340 (Bom). Assessee also filed paper book running into 6 pages containing balance sheet as on 31/03/2010. On the other hand, the ld. DR, defended the conclusion arrived at in the impugned order by adding that the impugned years may also be sent to the file of the ld. Assessing Office…

Silvassa Estates P.Ltd, Mumbai vs. ITO 8(3)(2), Mumbai

In the result, the appeal filed by the assessee company in ITA N0

Bench: Shri C.N. Prasad & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.7383/Mum/2012 ("नधा"रण वष" / Assessment Year : 2009-10) M/S Silvassa Estates Pvt. The Income Tax Officer, बनाम/ Ltd., Ward 8(3)(2), V. M/S Natvarlal Vepari & Co., Aaykar Bhavan, 2 Nd Floor, Oricon House, 4Th Floor, Maharshi Karve Road, 12, K. Dubash Marg, Mumbai – 400 020. Mumbai – 400 023. "थायी लेखा सं./Pan : Aaacs6303D (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

…9 2009 and Rs. 1.91 crores as on 31st March, 2008. The assessee company relied upon the decision 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) . The assessee company submitted that the it has made investment in the group companies which comes to Rs. 1,43,50,400/- which are unquoted shares out of total investments of Rs.1,47,48,012/-. All the investments are ol…

Ashraj Foods & Beverages P.Ltd, Mumbai vs. ITO 9(1)(1), Mumbai

The appeal of the assessee is allowed

Bench: Shri Joginder Singh & Shri Ashwani Tanejaassessment Year: 2011-12 M/S Ashraj Foods & Beverages Ito-9(1)(1), Pvt. Ltd. Mumbai बनाम/ Shop No.22, Vs. Galaxy Apartments, B.J. Road, Bandra (W), Mumbai-400050 Pan. No. Aaaca5134E ("नधा"रती /Assessee) (राज"व /Revenue )

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ, डी,मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “D”, MUMBAI "ी जो"ग"दर "संह, "या"यक सद"य एवं "ी अ"नी तनेजा, लेखा सद"य, के सम" Before Shri Joginder Singh, Judicial Member, and Shri Ashwani Taneja, Accountant Member Assessment Year: 2011-12 M/s Ashraj Foods & Beverages ITO-9(1)(1), Pvt. Ltd. Mumbai बनाम/ Shop No.22, Vs. Galaxy Apartments, B.J. Road, Bandra (W), Mumbai-400050 PAN. No. AAACA5134E ("नधा"रती /Assessee) (राज"व /Revenue ) "नधा"रती क" ओर से / Assessee by Shri Vimal Punamiya राज"व क" ओर से / Revenue by Smt. N.V. Nadkarni (DR) सुनवाई क" तार"ख / Date of H…