CIT v. Hero Cycles Ltd.

323 ITR 518High Court2010#150 most cited

What is CIT v. Hero Cycles Ltd. authority for?

Disallowance under Section 14A, for expenditure incurred in relation to exempt income, is not permissible when the assessee has not earned any exempt income, such as dividend income under Section 10(34), during the year under consideration.

470

judgments rely on this decision, according to BharatTax’s citation analysis of 367,181 Indian tax judgments — from 2012 to 2026.

Also referred to as

CIT v. Hero Cycles Ltd. · Section 14A disallowance · no exempt income earned · Section 10(34) dividend · expenditure nexus · disallowance if no dividend income · 323 ITR 518 · Hero Cycles 14A · exempt income disallowance

Also reported as

189 Taxmann 504 ITR-OL 246221 CTR 435

Sections most often in play

Section 14ASection 142(1)Section 143(3)Section 8DSection 143(2)Section 115JBSection 37(1)Section 43B
Read the full judgment

Issues it is cited on

section 10(34)disallowance under section 14adisallowance u/s 14asection 14asection 115jsection 115jbsection 37section 37(1)section 10section 115previous yearassistant commissioner

Judgments citing CIT v. Hero Cycles Ltd.

Asstt.Commissioner of Income Tax, Ludhiana vs. M/S Mrs.Bectors Food Specilties Ltd, Ludhiana

ITA 559/CHANDI/2017[2013-14]Status: DisposedITAT Chandigarh21 May 2018AY 2013-14

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…r the appellant refers to Bombay High Court judgement reported as Commissioner of Income Tax Vs. Reliance Utilities and Power Ltd. (2209) 313 ITR 340 as well as a Division Bench judgement of this Court in Commissioner of Income Tax Vs. Hero Cycles Ltd. (2010) 323 ITR 518, to contend that in view of the balance-sheet produced by the assessee, shall be presumed that the funds available with the assessee were sufficient to meet the investments out of its own funds and that borrowed funds were not utilized for investment. Therefore, interest, if any, paid on borrowed funds cannot be disallowed in terms of Section 14A…

Asstt.Commissioner of Income Tax, Ludhiana vs. M/S Mrs.Bectors Food Specilties Ltd, Ludhiana

ITA 558/CHANDI/2017[2012-13]Status: DisposedITAT Chandigarh21 May 2018AY 2012-13

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…r the appellant refers to Bombay High Court judgement reported as Commissioner of Income Tax Vs. Reliance Utilities and Power Ltd. (2209) 313 ITR 340 as well as a Division Bench judgement of this Court in Commissioner of Income Tax Vs. Hero Cycles Ltd. (2010) 323 ITR 518, to contend that in view of the balance-sheet produced by the assessee, shall be presumed that the funds available with the assessee were sufficient to meet the investments out of its own funds and that borrowed funds were not utilized for investment. Therefore, interest, if any, paid on borrowed funds cannot be disallowed in terms of Section 14A…

Asstt.Commissioner of Income Tax, Ludhiana vs. M/S Mrs.Bectors Food Specilties Ltd, Ludhiana

ITA 557/CHANDI/2017[2011-12]Status: DisposedITAT Chandigarh21 May 2018AY 2011-12

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…r the appellant refers to Bombay High Court judgement reported as Commissioner of Income Tax Vs. Reliance Utilities and Power Ltd. (2209) 313 ITR 340 as well as a Division Bench judgement of this Court in Commissioner of Income Tax Vs. Hero Cycles Ltd. (2010) 323 ITR 518, to contend that in view of the balance-sheet produced by the assessee, shall be presumed that the funds available with the assessee were sufficient to meet the investments out of its own funds and that borrowed funds were not utilized for investment. Therefore, interest, if any, paid on borrowed funds cannot be disallowed in terms of Section 14A…

Asstt.Commissioner of Income Tax, Ludhiana vs. M/S Mrs.Bectors Food Specilties Ltd, Ludhiana

ITA 556/CHANDI/2017[2010-11]Status: DisposedITAT Chandigarh21 May 2018AY 2010-11

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…r the appellant refers to Bombay High Court judgement reported as Commissioner of Income Tax Vs. Reliance Utilities and Power Ltd. (2209) 313 ITR 340 as well as a Division Bench judgement of this Court in Commissioner of Income Tax Vs. Hero Cycles Ltd. (2010) 323 ITR 518, to contend that in view of the balance-sheet produced by the assessee, shall be presumed that the funds available with the assessee were sufficient to meet the investments out of its own funds and that borrowed funds were not utilized for investment. Therefore, interest, if any, paid on borrowed funds cannot be disallowed in terms of Section 14A…

Asstt.Commissioner of Income Tax, Ludhiana vs. M/S Mrs.Bectors Food Specilties Ltd, Ludhiana

ITA 555/CHANDI/2017[2007-08]Status: DisposedITAT Chandigarh21 May 2018AY 2007-08

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…r the appellant refers to Bombay High Court judgement reported as Commissioner of Income Tax Vs. Reliance Utilities and Power Ltd. (2209) 313 ITR 340 as well as a Division Bench judgement of this Court in Commissioner of Income Tax Vs. Hero Cycles Ltd. (2010) 323 ITR 518, to contend that in view of the balance-sheet produced by the assessee, shall be presumed that the funds available with the assessee were sufficient to meet the investments out of its own funds and that borrowed funds were not utilized for investment. Therefore, interest, if any, paid on borrowed funds cannot be disallowed in terms of Section 14A…

ACIT, Ludhiana vs. M/S Mrs. Bectors Food Specialties Pvt. Ltd., Ludhiana

ITA 405/CHANDI/2017[2008-09]Status: DisposedITAT Chandigarh21 May 2018AY 2008-09

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…r the appellant refers to Bombay High Court judgement reported as Commissioner of Income Tax Vs. Reliance Utilities and Power Ltd. (2209) 313 ITR 340 as well as a Division Bench judgement of this Court in Commissioner of Income Tax Vs. Hero Cycles Ltd. (2010) 323 ITR 518, to contend that in view of the balance-sheet produced by the assessee, shall be presumed that the funds available with the assessee were sufficient to meet the investments out of its own funds and that borrowed funds were not utilized for investment. Therefore, interest, if any, paid on borrowed funds cannot be disallowed in terms of Section 14A…

DCIT, Ludhiana vs. M/S Devakar Investment & Trading Company (P) Ltd., Ludhiana

In the result, appeal of the Revenue is dismissed

ITA 691/CHANDI/2016[2012-13]Status: DisposedITAT Chandigarh24 Apr 2018AY 2012-13

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumar

For Appellant: Shri. Rajiv ThaparFor Respondent: Smt. Chandrakanta
Section 14A

…r the appellant refers to Bombay High Court judgement reported as Commissioner of Income Tax Vs. Reliance Utilities and Power Ltd. (2209) 313 ITR 340 as well as a Division Bench judgement of this Court in Commissioner of Income Tax Vs. Hero Cycles Ltd. (2010) 323 ITR 518, to contend that in view of the balance-sheet produced by the assessee, shall be presumed that the funds available with the assessee were sufficient to meet the investments out of its own funds and that borrowed funds were not utilized for investment. Therefore, interest, if any, paid on borrowed funds cannot be disallowed in terms of Section 14A…

M/S. Delhi International Airport Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

In the result, appealsof the assessee are partly allowed

ITA 636/BANG/2017[2011-12]Status: DisposedITAT Bangalore19 Apr 2018AY 2011-12

Bench: Shri Sunil Kumar Yadavand Shri. Jason P Boaz

For Appellant: Shri. Sunil Jain, CAFor Respondent: Smt. Vandana Sagar
Section 143(3)Section 14ASection 153ASection 194HSection 32Section 40

…arketing Incl. (decision dated April 2, 2014, of the High Court of Punjab and Haryana in I. T. A. No. 970 of 2008)—since reported in [2015] 4 ITR-OL 246 (P&H)— which in turn referred to two earlier decisions of the same court in CIT v. Hero Cycles Ltd. [2010] 323 ITR 518 (P&H) and CIT v. Winsome Textile Industries Ltd. [2009] 319 ITR 204 (P&H). The second was of the Gujarat High Court in CIT v. Corrtech Energy (P.) Ltd. [2014] 223 Taxmann 130 (Guj) ; [2015] 372 ITR 97 (Guj) and the third of the Allahabad High Court in CIT v. Shivam Motors (P) Ltd. (decision dated 5th May, 2014, in I. T. A. No. 88 of 2014). These…

M/S. Delhi International Airport Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

In the result, appealsof the assessee are partly allowed

ITA 622/BANG/2017[2012-13]Status: DisposedITAT Bangalore19 Apr 2018AY 2012-13

Bench: Shri Sunil Kumar Yadavand Shri. Jason P Boaz

For Appellant: Shri. Sunil Jain, CAFor Respondent: Smt. Vandana Sagar
Section 143(3)Section 14ASection 153ASection 194HSection 32Section 40

…arketing Incl. (decision dated April 2, 2014, of the High Court of Punjab and Haryana in I. T. A. No. 970 of 2008)—since reported in [2015] 4 ITR-OL 246 (P&H)— which in turn referred to two earlier decisions of the same court in CIT v. Hero Cycles Ltd. [2010] 323 ITR 518 (P&H) and CIT v. Winsome Textile Industries Ltd. [2009] 319 ITR 204 (P&H). The second was of the Gujarat High Court in CIT v. Corrtech Energy (P.) Ltd. [2014] 223 Taxmann 130 (Guj) ; [2015] 372 ITR 97 (Guj) and the third of the Allahabad High Court in CIT v. Shivam Motors (P) Ltd. (decision dated 5th May, 2014, in I. T. A. No. 88 of 2014). These…

M/S. Delhi International Airport Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

In the result, appealsof the assessee are partly allowed

ITA 596/BANG/2017[2013-14]Status: DisposedITAT Bangalore19 Apr 2018AY 2013-14

Bench: Shri Sunil Kumar Yadavand Shri. Jason P Boaz

For Appellant: Shri. Sunil Jain, CAFor Respondent: Smt. Vandana Sagar
Section 143(3)Section 14ASection 153ASection 194HSection 32Section 40

…arketing Incl. (decision dated April 2, 2014, of the High Court of Punjab and Haryana in I. T. A. No. 970 of 2008)—since reported in [2015] 4 ITR-OL 246 (P&H)— which in turn referred to two earlier decisions of the same court in CIT v. Hero Cycles Ltd. [2010] 323 ITR 518 (P&H) and CIT v. Winsome Textile Industries Ltd. [2009] 319 ITR 204 (P&H). The second was of the Gujarat High Court in CIT v. Corrtech Energy (P.) Ltd. [2014] 223 Taxmann 130 (Guj) ; [2015] 372 ITR 97 (Guj) and the third of the Allahabad High Court in CIT v. Shivam Motors (P) Ltd. (decision dated 5th May, 2014, in I. T. A. No. 88 of 2014). These…

M/S Delhi International Airport Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

In the result, appealsof the assessee are partly allowed

ITA 581/BANG/2017[2007-08]Status: DisposedITAT Bangalore19 Apr 2018AY 2007-08

Bench: Shri Sunil Kumar Yadavand Shri. Jason P Boaz

For Appellant: Shri. Sunil Jain, CAFor Respondent: Smt. Vandana Sagar
Section 143(3)Section 14ASection 153ASection 194HSection 32Section 40

…arketing Incl. (decision dated April 2, 2014, of the High Court of Punjab and Haryana in I. T. A. No. 970 of 2008)—since reported in [2015] 4 ITR-OL 246 (P&H)— which in turn referred to two earlier decisions of the same court in CIT v. Hero Cycles Ltd. [2010] 323 ITR 518 (P&H) and CIT v. Winsome Textile Industries Ltd. [2009] 319 ITR 204 (P&H). The second was of the Gujarat High Court in CIT v. Corrtech Energy (P.) Ltd. [2014] 223 Taxmann 130 (Guj) ; [2015] 372 ITR 97 (Guj) and the third of the Allahabad High Court in CIT v. Shivam Motors (P) Ltd. (decision dated 5th May, 2014, in I. T. A. No. 88 of 2014). These…

Russell Credit Limited, Kolkata vs. J.C.I.T (OSD), Cir - 8, Kolkata

In the result, both the appeals of revenue as well as assessee is partly allowed for statistical purposes

ITA 674/KOL/2013[2009-10]Status: DisposedITAT Kolkata11 Apr 2018AY 2009-10

Bench: "ी जे. सुधाकर रे"डी, लेखा सद"य एवं/And "ी ऐ. ट". वक", "यायीक सद"य) [Before Shri J. Sudhakar Reddy, Am & Shri A. T. Varkey, Jm]

Section 14ASection 46Section 48Section 49Section 49(1)Section 92CSection 92E

…ssessed at Rs.3,75,80,707/-.” 11. On appeal the Ld. CIT(A) relying on the Tribunal’s decision in the case of Smt. Mina Deogun Vs. ITO reported in (2008) 117 TTJ 121 (Kol) as well as the decision of the ITAT Special Bench in the case of DCIT Vs. Manjula J Shah 318 ITR 417 which was later upheld by the Hon’ble Bombay High Court has decided in favour of the assessee and directed the AO to adopt the figure of long term capital loss to be carried forward to the next year at Rs.4,56,14,076/- instead of Rs.3,75,80,707/-. We note that sec. 49 of the Act deals with the manner of computation of the cost of acquisition of c…

D.C.I.T Cir - 8, Kolkata. vs. M/S Russel Credit Limited, Kolkata

In the result, both the appeals of revenue as well as assessee is partly allowed for statistical purposes

ITA 629/KOL/2013[2009-10]Status: DisposedITAT Kolkata11 Apr 2018AY 2009-10

Bench: "ी जे. सुधाकर रे"डी, लेखा सद"य एवं/And "ी ऐ. ट". वक", "यायीक सद"य) [Before Shri J. Sudhakar Reddy, Am & Shri A. T. Varkey, Jm]

Section 14ASection 46Section 48Section 49Section 49(1)Section 92CSection 92E

…ssessed at Rs.3,75,80,707/-.” 11. On appeal the Ld. CIT(A) relying on the Tribunal’s decision in the case of Smt. Mina Deogun Vs. ITO reported in (2008) 117 TTJ 121 (Kol) as well as the decision of the ITAT Special Bench in the case of DCIT Vs. Manjula J Shah 318 ITR 417 which was later upheld by the Hon’ble Bombay High Court has decided in favour of the assessee and directed the AO to adopt the figure of long term capital loss to be carried forward to the next year at Rs.4,56,14,076/- instead of Rs.3,75,80,707/-. We note that sec. 49 of the Act deals with the manner of computation of the cost of acquisition of c…

Pragati Aroma Oil Distillers (P) Ltd, Mumbai vs. DCIT 4(3), Mumbai

In the result appeal of the assessee is partly allowed and appeal of the Revenue stood dismissed

ITA 923/MUM/2016[2011-12]Status: DisposedITAT Mumbai04 Apr 2018AY 2011-12

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.923/Mum/2016 (नििाारण वर्ा / Assessment Year: 2011-12) बिाम/ Pragati Aroma Oil Distillers Dcit 4(3) (P) Ltd., 206 Anand Bhavan, R.No. 649, 6 T H Floor, 17 Babugenu Road, Aaykar Bhavan, V. Princess Street, M K Road, Marine Lines, Mumbai-400020 Mumbai 400002 स्थायी ऱेखा सं./ Pan : Aaacp2213P (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Appellant: Shri. Mahaveer JainFor Respondent: Shri. Rajat Mittal
Section 10Section 10BSection 143(3)Section 14ASection 80I

…nd and used by the assessee to park its surplus funds and no such market research , day to day analysis of market trends are required. The assessee also relied upon the decision of the Hon‟ble Punjab & Haryana High Court in the case of CIT v. Hero Cycles Ltd. 323 ITR 518 wherein it was held that disallowance u/s 14A can be made only when a clear nexus between the expenditure incurred and the exempt income exists. I.T.A. No.923/Mum/2016 I.T.A. No.319/Mum/2016 The learned CIT-A, however, rejected the contentions of the assessee as in the preceding years from AY 2006-07 to 2010-11 , the identical issue was decided…

ACIT, Cir-27(1), Kolkata, Purba Medinipur vs. Mugberia Central Co-Operative Bank Ltd., Purba Medinipur

In the result, appeal of revenue is dismissed

ITA 2355/KOL/2016[2013-14]Status: DisposedITAT Kolkata28 Mar 2018AY 2013-14

Bench: "ी ऐ. ट". वक", "यायीक सद"य एवं/And "ी एम .बालागणेश, लेखा सद"य) [Before Shri A. T. Varkey, Jm & Shri M.Balaganesh, Am]

Section 14A

…ny exempt income/dividend this year, therefore, there was no question of making any disallowance invoking sec. 14A of the Act read with Rule 8 of Rules. For that we rely on the decision of Hon’ble Punjab & Haryana High Court in CIT Vs. Hero Cycles Ltd. (2010) 323 ITR 518 wherein it was held 3 Mugeberia Central Co-operative Bank Ltd.., AY- 2013-14 that sec. 14A of the Act cannot be invoked when no exempt income was earned by the assessee. Therefore, we concur with the decision of ld. CIT(A) and dismiss the revenue’s appeal. 5. In the result, appeal of revenue is dismissed. Order is pronounced in the open court o…

DCIT Cir 3(3)(2), Mumbai vs. Tulip Hotels P.Ltd, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 5151/MUM/2015[2011-12]Status: DisposedITAT Mumbai14 Mar 2018AY 2011-12

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm Dcit Cir 3(3)(2) Vs. M/S. Tulip Hotels Pvt.Ltd., R.No.609, 6Th Floor Chandermukhi Building Aayakar Bhavan (Basement), Behind The M.K.Road, Oberoi Nariman Point Mumbai – 400 020 Mumbai – 400 021 Pan/Gir No. Aaact9446Q Appellant) .. Respondent)

Section 10Section 143Section 143(3)Section 14A

…any material on record to controvert the contention of the assessee that no expenditure has been incurred for earning the exempt income, there is no justification to disallow proportionate business expenses on estimate basis. (d) CIT vs. M/s. Hero Cycles Ltd. 323 ITR 518 wherein Hon'ble Punjab & Haryana High Court in case of has held that whether in a given situation any expenditure was incurred which was to be disallowed was a question of fact. The contention of the revenue that directly or indirectly some expenditure is always incurred which must be disallowed u/s 14A was not accepted. It was held that disallow…

DCIT 3(1), Mumbai vs. Edelweiss Capital Ltd, Mumbai

In the result appeals of Revenue are dismissed

ITA 7797/MUM/2011[2007-08]Status: DisposedITAT Mumbai14 Mar 2018AY 2007-08

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm

Section 143(3)Section 14ASection 36(1)(iii)

…the AO that any expenditure had been incurred by the assessee for earning its dividend income. Merely, an ad hoc disallowance was made. The onus was on the AO to establish any such expenditure. This onus has not been discharged. In "CIT v Hero Cycles" (P & H) 323 ITR 518, under similar circumstances, it was held that the disallowance u/s. 14A of the Act requires a clear finding of incurring of expenditure and that no disallowance can be made on the basis of presumptions. In "ACIT v Eicher Ltd." 101 TTJ (Del) 369, that it was held that the burden is on the AO to establish nexus of I' expenses incurred with the ear…

DCIT-2(3)(2), Mumbai vs. Kotak Mahindra Bank Ltd., Mumbai

The appeal of the Revenue is dismissed and that of the assessee is allowed

ITA 2817/MUM/2016[2012-13]Status: DisposedITAT Mumbai28 Feb 2018AY 2012-13

Bench: Sri Mahavir Singh, Jm & Sri Manoj Kumar Aggarwal, Am The Dy. Commissioner Of Kotak Mahindra Bank Ltd. Income Tax, Circle 2(3)(2), 27 Bkc, G Block, Bandra Mumbai R. No. 552, 5Th Floor, Kurla Complex, Bandra Vs. Aayakar Bhavan, M.K. Road, (East), Mumbai-400 023 Mumbai-400 020 Appellant .. Respondent Pan No. Aaack4409J

For Appellant: Farrokh V. Irani, ARFor Respondent: B. Sriniwas, DR
Section 143(3)Section 14A

…IT v. Cocanada Radhaswami Bank Ltd. [1965] 57 ITR 306 (SC) (para 14) iv. CIT v. Corrtech Energy (P.) Ltd. [2015] 372 ITR 97 (Guj) (para 15) v. CIT v.Holcim India (P.) Ltd.(I.T.A.No.486 of 2014 decided on 5- 9-2014) (para 15) vi. CIT v. Hero Cycles Ltd. [2010] 323 ITR 518 (P&H) (para 15) vii. CIT v. Lakhani Marketing Incl. [2015] 4 ITR-OL 246 (P&H) (para 15) Cross Objection No. 38/Mum/2018 viii. CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 (SC) (para 10) ix.CIT v.Shivam Motors (P.) Ltd. (ITA No. 88 of 2014 decided on 5-5-2014) (para 15) x. IT v. Winsome Textile Industries Ltd. [2009] 319 ITR 204 (P&H) (para 15…

M/S. Lmj Business Centre (P) Ltd., Kolkata vs. ITO, Ward - 8(3), Kolkata

In the result the appeal of the assessee is partly allowed

ITA 1619/KOL/2017[2009-10]Status: DisposedITAT Kolkata09 Feb 2018AY 2009-10

Bench: Hon’Ble Sri N.V.Vasudevan, Jm ] I.T.A Nos.1618&1619/Kol/2017 Assessment Years : 2008-09 & 2009-10

For Appellant: Shri Shital Khemka, FCA & Smt. Arti Debnath, AdvocateFor Respondent: Shri Satyajit Mondal, Addl. CIT

…were much more than the interest free advance given to the sister concern the disallowance of interest made by the AO cannot be sustained. In this regard the assessee relied on the following judicial pronouncements : “i) CIT vs Reliance Utilities & Power Ltd. 221 CTR 435 (Bombay HC) ii)CIT vs Tin Box Co. 182 CYR 171 (Delhi HC) iii) JCIT vs ITC Ltd, 115 TTJ 45 (Kolkata Special Bench).” 5. In the aforesaid decisions it has been held that where the assessee has interest free fund as well as borrowed funds and where interest free loans are given to the sister concern which are lesser than the interest free funds a…

M/S. Lmj Business Centre (P) Ltd., Kolkata vs. ITO, Ward - 8(3), Kolkata

In the result the appeal of the assessee is partly allowed

ITA 1618/KOL/2017[2008-09]Status: DisposedITAT Kolkata09 Feb 2018AY 2008-09

Bench: Hon’Ble Sri N.V.Vasudevan, Jm ] I.T.A Nos.1618&1619/Kol/2017 Assessment Years : 2008-09 & 2009-10

For Appellant: Shri Shital Khemka, FCA & Smt. Arti Debnath, AdvocateFor Respondent: Shri Satyajit Mondal, Addl. CIT

…were much more than the interest free advance given to the sister concern the disallowance of interest made by the AO cannot be sustained. In this regard the assessee relied on the following judicial pronouncements : “i) CIT vs Reliance Utilities & Power Ltd. 221 CTR 435 (Bombay HC) ii)CIT vs Tin Box Co. 182 CYR 171 (Delhi HC) iii) JCIT vs ITC Ltd, 115 TTJ 45 (Kolkata Special Bench).” 5. In the aforesaid decisions it has been held that where the assessee has interest free fund as well as borrowed funds and where interest free loans are given to the sister concern which are lesser than the interest free funds a…