CIT v. Modi Rubber Ltd.

378 ITR 128High Court2015#6606 most cited
18

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2010 to 2025.

Sections most often in play

Section 143(3)Section 2(22)(e)Section 271(1)(c)Section 36(1)(iii)Section 36(1)(vii)Section 36(2)

Issues it is cited on

interest free advancesmercantile system of accountingcommercial expediencysection 145(3)section 145section 271(1)section 271(1)(c)previous yearsection 142(1)companysection 25prescribed

Judgments citing CIT v. Modi Rubber Ltd.

INVOLUTE ENGINEERING PVT. LTD.,NEW DELHI vs. DCIT, CIRCLE- 12(2), NEW DELHI

The appeals is allowed

ITA 6885/DEL/2019[2015-16]Status: DisposedITAT Delhi29 May 2025AY 2015-16

Bench: Shri S. Rifaur Rahman & Shri Anubhav Sharmaassessment Year: 2015-16 Involute Engineering Pvt. Ltd., Vs Dcit, E-30, Anand Niketan, Circle-12(2), Basement, New Delhi. New Delhi – 110 001. Pan: Aaacs2041N (Appellant) (Respondent) Assessee By : Shri Sanjay Arora, Ca; Ms Pallavi Sharma, Ca & Shri Jeetan Nagpal, Ca Revenue By : Shri Om Prakash, Sr. Dr Date Of Hearing : 01.05.2025 Date Of Pronouncement : 29.05.2025 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Assessee Against The Order Dated 31.05.2019 Of The Commissioner Of Income-Tax (Appeals)-22, New Delhi (Hereinafter Referred To As The Ld. First Appellate Authority Or ‘The Ld. Faa’, For Short) In Appeal No.208/18-19/Cit(A)-22, New Delhi Arising Out Of The Appeal Before It Against The Order Dated 27.12.2017, Respectively, Passed U/S 143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) By The Dcit, Circle-12(2), New Delhi (Hereinafter Referred To As The Ld. Ao).

For Appellant: Shri Sanjay Arora, CAFor Respondent: Shri Om Prakash, Sr. DR
Section 143(3)

…ee loans, the same shall be presumed to have been given out of the owned funds rather than the borrowed funds. Reliance can be placed on the Hon’ble Jurisdictional Delhi High Court decision in the case of Commissioner of Income Tax Vs. Modi Rubber Ltd. [2015] 378 ITR 128 (Delhi), and Commissioner of Income Tax vs. Bharti Televenture Ltd. [2011] 331 ITR 502 (Delhi). 4 ITAs No.6885/Del/2019 7. Then where appellant holds 47.06 of the equity in PHL and has substantial stake in the said company. PHL had been making consistent losses in the past. Thus the advance was made for purely “for the purpose of business”. Ld.…

INVOLUTE ENGINEERING PVT. LTD.,NEW DELHI vs. DCIT, CIRCLE- 12(2), NEW DELHI

The appeals is allowed

ITA 6884/DEL/2019[2013-14]Status: DisposedITAT Delhi29 May 2025AY 2013-14

Bench: Shri S. Rifaur Rahman & Shri Anubhav Sharmaassessment Year: 2013-14 Involute Engineering Pvt. Ltd., Vs Dcit, E-30, Anand Niketan, Circle-12(2), Basement, New Delhi. New Delhi – 110 001. Pan: Aaacs2041N (Appellant) (Respondent) Assessee By : Shri Sanjay Arora, Ca; Ms Pallavi Sharma, Ca & Shri Jeetan Nagpal, Ca Revenue By : Shri Om Prakash, Sr. Dr Date Of Hearing : 01.05.2025 Date Of Pronouncement : 29.05.2025 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Assessee Against The Order Dated 31.05.2019 Of The Commissioner Of Income-Tax (Appeals)-22, New Delhi (Hereinafter Referred To As The Ld. First Appellate Authority Or ‘The Ld. Faa’, For Short) In Appeal No.208/18-19/Cit(A)-22, New Delhi Arising Out Of The Appeal Before It Against The Order Dated 18.03.2016, Passed U/S 143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) By The Dcit, Circle- 12(2), New Delhi (Hereinafter Referred To As The Ld. Ao).

For Appellant: Shri Sanjay Arora, CAFor Respondent: Shri Om Prakash, Sr. DR
Section 143(3)Section 36(1)(vii)

…same shall be presumed to have been given out of the owned funds rather ITAs No.6884/Del/2019 than the borrowed funds, as has been held in Hon’ble Jurisdictional Delhi High Court decision in the case of Commissioner of Income Tax Vs. Modi Rubber Ltd. [2015] 378 ITR 128 (Delhi). Accordingly, the disallowance of Rs. 16,46,219 made by the Ld. AO on account of proportionate interest expenditure deserves to be deleted. 9. As a sequel to determination of grounds in favour of the assessee the appeals is allowed. The impugned additions shall stand deleted with consequential effects. Order pronounced in the open court o…

ASSISTANT COMMISSIONER OF INCOME TAX , CHENNAI vs. SURYANARAYANA IYER, CHENNAI

In the result, appeal filed by the Revenue is dismissed

ITA 1491/CHNY/2024[2013-14]Status: DisposedITAT Chennai09 Oct 2024AY 2013-14

Bench: Shri Aby T. Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita No.1491/Chny/2024 िनधा"रण वष"/Assessment Year: 2013-14 V. The Acit, Ncc-19(1), Mr. Suryanarayana Iyer, Chennai. Old No.3, New No.5, Third Street, Nehru Colony, Nanganallur, Chennai-600 061. [Pan: Aztps 0939 A] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Ms. G. Vardini KarthikFor Respondent: Dr. Samuel Pitta, JCIT
Section 194J

…om Hindustan Steel Ltd. for the 8 locomotives supplied by the assessee-company to them could not be brought to tax as income since this entry reflected ‘hypothetical income’ and only the real income could be brought to tax. In CIT v. Modi Rubber Ltd. [1998] 230 ITR 817, following the decisions of the Supreme Court in Godhra Electricity Co. Ltd’s. case (supra) and Shoorji Vallabhdas &Co’s. case (supra), held that a mere unilateral act of the assessee debiting the books of account, the Mr. Suryanarayana Iyer :: 11 :: liability for payment whereof was not accepted or agreed to by the debtor, did not amount to in…

PRAGATI POWER CORPORATION LTD,NEW DELHI vs. ACIT, CIRCLE 20(1), NEW DELHI

In the result, the appeal filed by the assessee is partly allowed as indicated above

ITA 1617/DEL/2023[2018-19]Status: DisposedITAT Delhi14 Aug 2024AY 2018-19

Bench: SHRI S.RIFAUR RAHMAN (Accountant Member), SHRI SUDHIR PAREEK (Judicial Member)

Section 115JSection 145(2)Section 32Section 36Section 36(1)(iii)Section 37Section 43ASection 46ASection 80I

…ion and also the right to assert from what part of the fund a particular investment is made, and it may not be permissible for the revenue to make an estimation of a proportionate figure". x) Even Delhi High Court in the case of CIT vs. Modi Rubber Ltd. (2017)378 ITR 128 (Del) has taken a similar view. o) Rebuttal to case law relied upon by the Assessing Officer i) While making the addition, Ld. Assessing Officer has relied upon the judgement of Punjab & Haryana High Court in the case of M/s Abhishek Industries (286 ITR 01) to support his assertion that owned and borrowed funds belong to a common pool of resource…

RAM DHAN YADAV,CHOMU JAIPUR vs. INCOME TAX OFFICER, ITO 7(3), JAIPUR

In the result, both the appeals of the assessee are allowed

ITA 369/JPR/2023[2008-09]Status: DisposedITAT Jaipur20 Feb 2024AY 2008-09

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Rajesh Soni (C.A.)For Respondent: Shri Anoop Singh (Addl.CIT)
Section 143(3)Section 144Section 147Section 148Section 69B

…n be said to have not resulted at all,there is obviously neither accrual nor receipt of income, even though an entry to that effect might in certain circumstances have been made in the books of accounts. • Likewise in the case of CIT vs Modi Rubber Ltd (1998) 230 ITR 817 (Del) it was held that mere unilateral act of the assessee debiting the books of account with the amount of interest, the liability for payment whereof was not accepted or agreed to by the debtor ,would not amount to accrual of income to the assessee. • The Assessee has not given any such cash Amount of Rs. 1,30,50,000 to CP Dudi, so the questio…

RAM DHAN YADAV,CHOMU JAIPUR vs. ITO, WD 7(3), JAIPUR

In the result, both the appeals of the assessee are allowed

ITA 366/JPR/2023[2007-2008]Status: DisposedITAT Jaipur20 Feb 2024AY 2007-2008

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Rajesh Soni (C.A.)For Respondent: Shri Anoop Singh (Addl.CIT)
Section 143(3)Section 144Section 147Section 148Section 69B

…n be said to have not resulted at all,there is obviously neither accrual nor receipt of income, even though an entry to that effect might in certain circumstances have been made in the books of accounts. • Likewise in the case of CIT vs Modi Rubber Ltd (1998) 230 ITR 817 (Del) it was held that mere unilateral act of the assessee debiting the books of account with the amount of interest, the liability for payment whereof was not accepted or agreed to by the debtor ,would not amount to accrual of income to the assessee. • The Assessee has not given any such cash Amount of Rs. 1,30,50,000 to CP Dudi, so the questio…

DCIT, CC-1(3), KOLKATA, KOLKATA vs. M/S. EMC LIMITED, KOLKATA

In the result, both the appeal of revenue is dismissed

ITA 2149/KOL/2017[2014-15]Status: DisposedITAT Kolkata27 May 2020AY 2014-15

Bench: Shri A. T. Varkey, Jm & Dr. A.L. Saini, Am]

Section 115JSection 143(2)Section 14A

…Hindustan Steel Ltd. for the 8 locomotives supplied by the assessee-company to them could not be brought to tax as income since this entry reflected 'hypothetical income' and only the real income could be brought to tax. 12. In CIT v. Modi Rubber Ltd. [1998] 230 ITR 817, following the decisions of the Supreme Court in Godhra Electricity Co. Ltd's. case (supra) and Shoorji Vallabhdas &Co's. case (supra), held that a mere unilateral act of the assessee debiting the books of account, the liability for payment whereof was not accepted or agreed to by the debtor, did not amount to income accrued to the assessee. 13.…

AKS HOMES & INFRASTRUCTURE PVT. LTD.,NEW DELHI vs. ITO WARD - 2(1), NEW DELHI

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

ITA 4893/DEL/2019[2013-14]Status: DisposedITAT Delhi31 Oct 2019AY 2013-14

Bench: Shri H.S. Sidhuassessment Year: 2013-14

Section 143(1)Section 143(2)Section 143(3)Section 36(1)(iii)

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘SMC’ NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER Assessment Year: 2013-14 AKS Homes & Infrastructure Pvt. Ltd. vs ITO H. No. 10, FF, North Avenue Road, Ward 2(1) Punjabi Bagh, New Delhi. New Delhi. PAN No. AAFCA9903N APPELLANT RESPONDENT Assessee by Shri Upvan Gupta, Advocate Revenue by Ms. Ekta Vishnoi, Sr. DR ORDER This appeal filed by the assessee against the impugned order dated 29.03.2019 passed by the Ld. CIT(Appeals)-32, New Delhi in relation to assessment year 2013-14 on the following grounds: 1. That on the facts and circumstances of the cas…

SHRI SAMEER SUNEJA,NEW DELHI vs. ACIT, NEW DELHI

ITA 190/DEL/2017[2013-14]Status: DisposedITAT Delhi14 Jun 2019AY 2013-14

Bench: Hon’Ble, Shri G.D. Agrawal & Shri Kuldip Singh

For Appellant: Shri K.V.S. Gupta, AdvocateFor Respondent: Shri Surender Pal, Senior DR
Section 28Section 36(1)Section 36(1)(iii)Section 37

…09-10 ITA No 446/De1/2013 Dt 19.02.2014 (Delhi Tribunal); CIT VS. Abhishek Industries Ltd. (2016) 380 ITR 652 (P&H); CIT Vs. Micro Labs Ltd. (2016) 383 ITR 490 (Kar); HDFC Bank Ltd Vs. DCIT & Others (2016) 383 ITR 529 (Bom); CIT VS. Modi Rubber Ltd (2015) 378 ITR 128 (Delhi); CIT Vs. SRF Ltd. (2015) 372 ITR 425 (Delhi); Siemens Nixdorf Information Systems GmbH Vs. DDIT (Int'l Taxation) 2(1)(Mum) [2016] 158 ITD 480 (Mumbai-Trib.); Godrej & Boyce Manufacturing Co. Ltd (2017) 394 ITR 117 and CIT Vs. Max India Ltd. (2016) 388 ITR 81 (P&H). 6 ITA No.2581/Del./2016 8. However, on the other hand, ld. DR for t…

DCIT, NEW DELHI vs. M/S JETAIR PVT. LTD.,, NEW DELHI

In the result, all the three appeals of the Revenue are dismissed

ITA 6884/DEL/2015[2012-13]Status: DisposedITAT Delhi19 Sept 2018AY 2012-13

Bench: Shri N.K. Billaiya & Shri N.K. Choudhary

For Appellant: Shri Vijay Mehta, CAFor Respondent: Ms. Asima Neb, Sr. DR

…ana High Court are misplaced, in as much as, in those cases, the disallowances, vis a vis claims, were on the grounds of commercial expediency, which is absent in the case in hand. 12. The Hon'ble Jurisdictional High Court of Delhi in the case of Modi Rubber 378 ITR 128 had an occasion to consider a similar issue of availability of interest free funds, vis a vis, lending of interest free advances. The relevant findings of the Hon'ble High Court read as under: “From a perusal of the financial statements for the year ended September 30, 1997, it was seen that the assessee was having mixed pool of funds comprising…

DCIT, NEW DELHI vs. M/S. JETAIR (P) LTD., NEW DELHI

In the result, all the three appeals of the Revenue are dismissed

ITA 2713/DEL/2015[2011-12]Status: DisposedITAT Delhi19 Sept 2018AY 2011-12

Bench: Shri N.K. Billaiya & Shri N.K. Choudhary

For Appellant: Shri Vijay Mehta, CAFor Respondent: Ms. Asima Neb, Sr. DR

…ana High Court are misplaced, in as much as, in those cases, the disallowances, vis a vis claims, were on the grounds of commercial expediency, which is absent in the case in hand. 12. The Hon'ble Jurisdictional High Court of Delhi in the case of Modi Rubber 378 ITR 128 had an occasion to consider a similar issue of availability of interest free funds, vis a vis, lending of interest free advances. The relevant findings of the Hon'ble High Court read as under: “From a perusal of the financial statements for the year ended September 30, 1997, it was seen that the assessee was having mixed pool of funds comprising…

DCIT, NEW DELHI vs. M/S. JETAIR (P) LTD., NEW DELHI

In the result, all the three appeals of the Revenue are dismissed

ITA 2712/DEL/2015[2010-11]Status: DisposedITAT Delhi19 Sept 2018AY 2010-11

Bench: Shri N.K. Billaiya & Shri N.K. Choudhary

For Appellant: Shri Vijay Mehta, CAFor Respondent: Ms. Asima Neb, Sr. DR

…ana High Court are misplaced, in as much as, in those cases, the disallowances, vis a vis claims, were on the grounds of commercial expediency, which is absent in the case in hand. 12. The Hon'ble Jurisdictional High Court of Delhi in the case of Modi Rubber 378 ITR 128 had an occasion to consider a similar issue of availability of interest free funds, vis a vis, lending of interest free advances. The relevant findings of the Hon'ble High Court read as under: “From a perusal of the financial statements for the year ended September 30, 1997, it was seen that the assessee was having mixed pool of funds comprising…

DCIT 1(2), MUMBAI vs. MAHARASHTRA STATE ELCTRICITY BOARD, MUMBAI

ITA 3559/MUM/2013[2006-07]Status: DisposedITAT Mumbai07 Mar 2018AY 2006-07

Bench: Shri G. S. Pannu, Am & Shri Sandeep Gosain, Jm आयकरअपीलसं./ I.T.A. No. 3559/Mum/2013 (निर्धारणवर्ा / Assessment Year:2006-07)

For Appellant: Shri H. N. Sinha, DRFor Respondent: Shri Niraj Sheth, AR
Section 143(3)Section 251(1)(a)

…hypothetical by nature in given facts and circumstances. - Radhasoami Satsang vs. CIT (1991) 100 CTR (SC) 267: (1992) 193 ITR 321 (SC) applied; CIT vs. Shoorji Vallabhdas & Co. (1962) 46 ITR 144 (SC), CIT vs. Modi Rubber Ltd. (1998) 148 CTR (Del) 448: (1998) 230 ITR 817 (Del), UCO Bank vs. CIT (1999) 154 CTR (SC) 88: (1999) 237 ITR 889 (SC), Godhra Electricity Co. vs. CIT (1997) 139 CTR (SC) 564: (1997) 225 ITR 746 (SC) and Poona Electricity Supply Co. Ltd. vs. CIT (1965) 57 ITR 521 (SC) relied on. (Paras 5, 5.2, 5.3, 5.9 & 5.12)" I am of the view that the impugned income is a hypothetical income until the dis…

NEERAJ PUROHIT,JAIPUR vs. ACIT, JAIPUR

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

ITA 1037/JPR/2016[2013-14]Status: DisposedITAT Jaipur08 Nov 2017AY 2013-14
For Appellant: Shri Manish Agarwal (CA)For Respondent: Shri R.A. Verma (Addl.CIT)
Section 143(3)Section 36(1)(vii)Section 37Section 37(1)(vii)Section 40A(3)

…e to sister concerns interest free sufficient funds available with assessee in form of interest free-advances from customers, share capital surplus and reserve to make advances- Interest on borrowings not to be disallowed- Income Tax Act,1961, s. 36(1)(iii). 378 ITR 128 CIT Vs. Modi Rubber Ltd. (Delhi) Appeal to High Court — Substantial question of law — Interest on borrowed capital — Assessee having at its disposal its own and borrowed funds — Loans advanced interest free to sister concerns — To be taken to have come from own funds — Tribunal taking plausible view on facts — No question of law arises — Income…

M/S BHARAT MARKETING & ADVERTISING CO. PVT. LTD.,,DELHI vs. ITO, NEW DELHI

In the result, the ground nos

ITA 5003/DEL/2016[2011-12]Status: DisposedITAT Delhi27 Jan 2017AY 2011-12

Bench: Shri S.V. Mehrotraassessment Year : 2011-12 Bharat Marketing & Advertising Ito, Ward- 2(4), Co. Pvt. Ltd., New Delhi. Vs. 391, 2Nd Floor, Zakir Nagar, Delhi. Pan : Aaacb 0049 H (Appellant) (Respondent)

For Appellant: Shri R. K. Kapoor, CAFor Respondent: Shri N. K. Bansal, Sr.DR
Section 143(3)Section 14ASection 36(1)(iii)

…s and not for giving interest free loans. He submitted that the matter may be restored back to the file of the Assessing Officer to examine the facts afresh in the light of decision of Hon’ble Delhi High Court in the case of CIT vs. Modi Rubber Ltd., (2015) 378 ITR 128 (Delhi). 6 9. I have considered the rival submissions of both the parties and have perused the record of the case. The facts need to be re-marshaled in the light of decision of Hon’ble Delhi High Court in the case of Modi Rubber Ltd. (supra). I, therefore, restore this issue to the file of the Assessing Officer for de-novo adjudication. In the r…

M/s. De vs. ons Pvt. Ltd

ITA/296/2006HC Delhi29 Nov 2010
Section 133(6)Section 271

…ITA No.367/2004 & 296/2006 Page 1 of 42 REPORTED * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA No. 367/2004 M/s. Devsons Pvt. Ltd. ..... Appellant Through: Mr.O.S. Bajpai, Sr. Advocate, with Mr. V.N. Jha, Advocate. versus Commissioner of Income Tax and Ors. ..... Respondents Through: Mr. Sanjeev Sabharwal, Advocate. AND + ITA No. 296/2006 Commissioner of Income Tax ..... Appellant Through: Mr. Sanjeev Sabharwal, Advocate. versus M/s. D…

M/S DE vs. ONS PVT LTDVS.COMMISSIONER OF INCOME TAX &

ITA - 367 / 2004HC Delhi19 Nov 2010
Section 133(6)Section 271

…ITA No.367/2004 & 296/2006 Page 1 of 42 REPORTED * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA No. 367/2004 M/s. Devsons Pvt. Ltd. ..... Appellant Through: Mr.O.S. Bajpai, Sr. Advocate, with Mr. V.N. Jha, Advocate. versus Commissioner of Income Tax and Ors. ..... Respondents Through: Mr. Sanjeev Sabharwal, Advocate. AND + ITA No. 296/2006 Commissioner of Income Tax ..... Appellant Through: Mr. Sanjeev Sabharwal, Advocate. versus M/s. D…

M/s. De vs. ons Pvt. Ltd

ITA/367/2004HC Delhi19 Nov 2010
Section 133(6)Section 271

…ITA No.367/2004 & 296/2006 Page 1 of 42 REPORTED * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA No. 367/2004 M/s. Devsons Pvt. Ltd. ..... Appellant Through: Mr.O.S. Bajpai, Sr. Advocate, with Mr. V.N. Jha, Advocate. versus Commissioner of Income Tax and Ors. ..... Respondents Through: Mr. Sanjeev Sabharwal, Advocate. AND + ITA No. 296/2006 Commissioner of Income Tax ..... Appellant Through: Mr. Sanjeev Sabharwal, Advocate. versus M/s. D…