CIT v. Nagarjuna Steels Ltd.

171 ITR 663High Court1988#9217 most cited

What is CIT v. Nagarjuna Steels Ltd. authority for?

Interest earned on funds borrowed for business purposes, even if temporarily deposited, is taxable as income from other sources and cannot be set off against interest expenses. The nature of the income (interest) does not change based on its origin or temporary use.

12

judgments rely on this decision, according to BharatTax’s citation analysis of 366,315 Indian tax judgments — from 2018 to 2025.

Also referred to as

CIT v. Nagarjuna Steels Ltd. · section 56 · section 57 · income from other sources · interest earned · interest expense · borrowed funds · temporary deposit · taxability of interest

Issues it is cited on

section 57section 56income from other sourcescompanyindiatotal incomebusinessinterest

Judgments citing CIT v. Nagarjuna Steels Ltd.

M/S Rpj Minerals Pvt. Ltd, Maihar vs. Income Tax Officer, Ward -1, Satna

ITA 86/JAB/2022[2017-18]Status: DisposedITAT Jabalpur19 Sept 2025AY 2017-18

Bench: Sh. Kul Bharat & Sh. Nikhil Choudhary

For Appellant: NoneFor Respondent: Sh. Shrawan Kumar Meena, CIT DR
Section 143(3)Section 234ASection 43B

…t accounting practice pointed to allowing the set off, holding that the same could not override the law. The Hon'ble Supreme Court specifically referred to judgments of the Hon'ble Andhra Pradesh High Court in the case of CIT vs. Nagarjuna Steels Ltd., (1988) 171 ITR 663 and the Hon'ble Bombay High Court in the case of CIT vs. Maharashtra Electrosmelt (1995) 214 ITR 489 and held that the reasonings followed in those judgments, that the background of raising the fund by borrowing and temporary utilization of a portion of that fund by keeping the same in deposit with the bank, was to show that the interest was earn…

Income Tax Officer Ward-1 vs. M/S Rpj Minerals Private Ltd., Satna

ITA 154/JAB/2016[2012-13]Status: DisposedITAT Jabalpur19 Sept 2025AY 2012-13

Bench: Sh. Kul Bharat & Sh. Nikhil Choudhary

For Appellant: NoneFor Respondent: Sh. Shrawan Kumar Meena, CIT DR
Section 143(3)Section 234ASection 43B

…t accounting practice pointed to allowing the set off, holding that the same could not override the law. The Hon'ble Supreme Court specifically referred to judgments of the Hon'ble Andhra Pradesh High Court in the case of CIT vs. Nagarjuna Steels Ltd., (1988) 171 ITR 663 and the Hon'ble Bombay High Court in the case of CIT vs. Maharashtra Electrosmelt (1995) 214 ITR 489 and held that the reasonings followed in those judgments, that the background of raising the fund by borrowing and temporary utilization of a portion of that fund by keeping the same in deposit with the bank, was to show that the interest was earn…

M/S. Rmz Hotels Private Limited, Bangalore vs. National E-Assessment Centre, Delhi

In the result, the appeal of the assessee is allowed

ITA 954/BANG/2022[2018-19]Status: DisposedITAT Bangalore22 Feb 2023AY 2018-19

Bench: Shri Chandra Poojariassessment Year: 2018-19

For Appellant: Shri V. Srinivasan, A.RFor Respondent: Shri Ganesh R. Ghale, Standing Counsel for Department
Section 234Section 255Section 255(3)Section 36

…ity in any way.—CIT vs. Seshasayee Paper & Boards Ltd. (1987) 61 CTR (Mad) 117 : (1985) 156 1TR 542 (Mad) : TC 41 R. 544 and Kedar Narain Sinoh vs. CIT (1938) 6 ITR 157 (All) : TC 32R.258 approved; CIT vs. NaQdriuna Steels Ltd. (1988) 71 CTR (AP) 118 : (1988) 171 ITR 663 (AP) : TC 41R.551, CIT vs. Electrochem Orissa Ltd. (1995) 123 CTR (On) 162 : (1995) 211 ITR 552 (Ori) and CIT vs. Maharashtra Electrosmelt ,v Ltg\. (1995) 124 CTR (Bom) 117 : (1995) 214 ITR 489 (Bom) : TC 41R.557 / disapproved; CIT vs. Shaw Wallace & Co. (1932) 59 IA 206~(PC) and Pondicherry -Railway Company Ltd. vs. CIT AIR 1931 PC 165 relied on…

Mellona Developers Pvt. Ltd., Mumbai vs. ITO, Ward- 3 (2)(2), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 1408/MUM/2020[2015-16]Status: DisposedITAT Mumbai08 Aug 2022AY 2015-16

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Mellona Developers Pvt. Ltd., V. Income Tax Officer – Ward – 3(2)(2) Room No. 673A, Aayakar Bhavan 514, Dalamal Towers, 211 M.K. Road, Mumbai - 400020 F.P.J. Marg, Nariman Point Mumbai - 400021 Pan: Aafcm3780K (Appellant) (Respondent) Assessee By : Shri K. Gopal Department By : Shri Mahita Nair

For Appellant: Shri K. GopalFor Respondent: Shri Mahita Nair
Section 115JSection 142(1)Section 143(2)

…: (i). Commissioner of Income Tax vs Bokaro Steel Limited 236 ITR 315 (Supreme Court) (ii). Commissioner of Income Tax vs Maharashtra Electrosmelt Limited 214 ITR 489 (Bombay High Court) (iii). Commissioner of Income Tax vs A.P. Forest Development Corporation 171 ITR 663 (Andhra Pradesh High Court) (iv). Snam Progetti S.P.A vs Additional Commissioner of Income Tax, New Delhi -II, and others 132 ITR 70 (Delhi High Court) (v). Gamma Constructions Pvt Ltd vs ITO 3(3)(4), Mumbai ITA No. 530/Mum/2012, Mumbai Tribunal (vi). Gamma Constructions Pvt Ltd vs ITO 3(3)(4), Mumbai ITA No. 530/Mum/2012, Mumbai Tribunal (vii).…

Income Tax Officer, Ward-2(1), Hyderabad vs. Ksk Wind Power Sankonahatti Athni Private Limied, Hyderabad

In the result, all the four appeals of the Revenue are allowed

ITA 34/HYD/2019[2014-15]Status: DisposedITAT Hyderabad25 Jan 2022AY 2014-15

Bench: Shri A. Mohan Alankamony & Shri S.S. Godaraassessment Year: 2014-15 Income Tax Officer, Vs. Ksk Wind Energy Ward-2(1), Halagali Benchi Private Hyderabad. Limited, Hyderabad. Pan: Aaeck 1965 F (Appellant) (Respondent) Assessee By: Sri S. Rama Rao Revenue By: Sri Sunil Gowtham, Sr. Ar Assessment Year: 2014-15 Income Tax Officer, Vs. Ksk Wind Power Ward-2(1), Sankonahatti Athni Hyderabad. Private Limited, Hyderabad. Pan: Aaeck 1900 C (Appellant) (Respondent) Assessee By: Sri S. Rama Rao Revenue By: Sri Sunil Gowtham, Sr. Ar Assessment Year: 2014-15 Income Tax Officer, Vs. Ksk Wind Power Ward-2(1), Aminabhavi Chikodi Hyderabad. Private Limited, Hyderabad. Pan: Aaeck 1888 R (Appellant) (Respondent)

For Appellant: Sri S. Rama RaoFor Respondent: Sri Sunil Gowtham, Sr. AR
Section 143(3)Section 56

…confirmed the order of the Assessing Officer. However, the Tribunal found that there were conflicting judgments of the Madras High Court in CIT vs. Seshasayee Paper and Boards Ltd. (1985) 156 ITR 542 and A.P. High Court in CIT vs. Nagarjuna Steels Ltd. (1988) 171 ITR 63. Accordingly a reference was made to the Apex Court. The Apex Court after examining the facts of the case and the judgment of the Madras High Court in Seshasayee Paper and Boards Ltd. (supra) and Andhra Pradesh High Court in Nagarjuna Steels Ltd. (supra) confirmed the judgment of the Madras High Court. The Apex Court has specifically observed as f…

Income Tax Officer, Ward-2(1), Hyderabad vs. Ksk Wind Energy Halagali Benchi Private Limied, Hyderabad

In the result, all the four appeals of the Revenue are allowed

ITA 33/HYD/2019[2014-15]Status: DisposedITAT Hyderabad25 Jan 2022AY 2014-15

Bench: Shri A. Mohan Alankamony & Shri S.S. Godaraassessment Year: 2014-15 Income Tax Officer, Vs. Ksk Wind Energy Ward-2(1), Halagali Benchi Private Hyderabad. Limited, Hyderabad. Pan: Aaeck 1965 F (Appellant) (Respondent) Assessee By: Sri S. Rama Rao Revenue By: Sri Sunil Gowtham, Sr. Ar Assessment Year: 2014-15 Income Tax Officer, Vs. Ksk Wind Power Ward-2(1), Sankonahatti Athni Hyderabad. Private Limited, Hyderabad. Pan: Aaeck 1900 C (Appellant) (Respondent) Assessee By: Sri S. Rama Rao Revenue By: Sri Sunil Gowtham, Sr. Ar Assessment Year: 2014-15 Income Tax Officer, Vs. Ksk Wind Power Ward-2(1), Aminabhavi Chikodi Hyderabad. Private Limited, Hyderabad. Pan: Aaeck 1888 R (Appellant) (Respondent)

For Appellant: Sri S. Rama RaoFor Respondent: Sri Sunil Gowtham, Sr. AR
Section 143(3)Section 56

…confirmed the order of the Assessing Officer. However, the Tribunal found that there were conflicting judgments of the Madras High Court in CIT vs. Seshasayee Paper and Boards Ltd. (1985) 156 ITR 542 and A.P. High Court in CIT vs. Nagarjuna Steels Ltd. (1988) 171 ITR 63. Accordingly a reference was made to the Apex Court. The Apex Court after examining the facts of the case and the judgment of the Madras High Court in Seshasayee Paper and Boards Ltd. (supra) and Andhra Pradesh High Court in Nagarjuna Steels Ltd. (supra) confirmed the judgment of the Madras High Court. The Apex Court has specifically observed as f…

Dy. Commissioner of Income Tax, Circle-16(1), Hyderabad vs. L & T Metro Rail (Hyderabad) Limited, Hyderabad

In the result, appeal of the Revenue is allowed

ITA 1412/HYD/2019[2016-17]Status: DisposedITAT Hyderabad21 Jan 2022AY 2016-17

Bench: Shri A. Mohan Alankamony & Shri S.S. Godaraassessment Year: 2016-17 Dcit, Vs. L & T Metro Rail Circle-16(1), (Hyderabad) Limited, Hyderabad. Hyderabad. Pan: Aabcl 8521 D (Appellant) (Respondent) Assessee By: Shri Ashik Shah Revenue By: Sri B. Sunil Kumar, Dr Date Of Hearing: 25/10/2021 Date Of Pronouncement: 21/01/2022 Order Per A. Mohan Alankamony, Am.:

For Appellant: Shri Ashik ShahFor Respondent: Sri B. Sunil Kumar, DR
Section 143(3)Section 56

…confirmed the order of the Assessing Officer. However, the Tribunal found that there were conflicting judgments of the Madras High Court in CIT vs. Seshasayee Paper and Boards Ltd. (1985) 156 ITR 542 and A.P. High Court in CIT vs. Nagarjuna Steels Ltd. (1988) 171 ITR 63. Accordingly a reference was made to the Apex Court. The Apex Court after examining the facts of the case and the judgment of the Madras High Court in Seshasayee Paper and Boards Ltd. (supra) and Andhra Pradesh High Court in Nagarjuna Steels Ltd. (supra) confirmed the judgment of the Madras High Court. The Apex Court has specifically observed as f…

M/S. Ganpati Global Private Ltd., Jaipur vs. ITO, Ward1(4), Jaipur

In the result, the appeal of the assessee is dismissed

ITA 302/JPR/2020[2013-14]Status: DisposedITAT Jaipur30 Jun 2021AY 2013-14
For Appellant: Shri Anoop Bhatia (CA)For Respondent: Smt. Monisha Choudhary (JCIT) a

…nal confirmed the order of the Assessing Officer. However, the Tribunal found that there were conflicting judgments of the Madras High Court in CIT v. Seshasayee Paper & Boards Ltd. [1985] 156 ITR 542 and A.P. High Court in CIT v. Nagarjuna Steels Ltd. [1988] 171 ITR 663/38 Taxman 229. Accordingly a reference was made to the Apex Court. The Apex Court after examining the facts of the 18 M/s Ganpati Global (P) Ltd. vs. ITO case and the judgment of the Madras High Court in Seshasayee Paper & Boards Ltd. (supra) and Andhra Pradesh High Court in Nagarjuna Steels Ltd. (supra) confirmed the judgment of the Madras High…

Income Tax Officer 3(1)(3), Mumbai vs. Evita Constructions Private Limited, Mumbai

In the result, the appeal by the revenue stands dismissed

ITA 7200/MUM/2017[2014-15]Status: DisposedITAT Mumbai11 Dec 2020AY 2014-15

…siness and affirmed the correctness of the view of the Tribunal that the interest so earned was "Income from business". "In the present case, on facts, the assessee had CIT Vs. Nagarjuna Steels borrowed funds. Some of the borrowed funds which were Ltd. [1988] 171 ITR 663 not immediately required were kept by the assessee in (AP) deposits and some interest was earned. There was a direct nexus between the borrowed funds and the deposited funds, since the deposited funds came out of the borrowed funds. And it cannot be assessed under the head "Income from Other source.". The ratio of case laws relied upon by the ap…

India Metal One Steel Plate Processing Private Ltd., Chennai vs. DCIT, Chennai

In the result, the assessee’s appeal is dismissed

ITA 3497/CHNY/2016[2012-13]Status: DisposedITAT Chennai27 Nov 2018AY 2012-13

Bench: Shri George Mathan & Shri S. Jayaramanआयकर अपील सं/.I.T.A. No. 3497/Chny/2016 "नधा"रण वष"/Assessment Year : 2012-13 M/S. India Metal One Steel Plate The Deputy Commissioner Of Income Processing Pvt. Ltd., Vs. Tax, Prestige Palladium Bayan, Corporate Circle – 2(2), 6Th Floor, Door No. 129 To 140 121, Mahatma Gandhi Road, Greams Road, Chennai – 600 006. Nungambakkam, Chennai – 600 034. [Pan: Aacci 5959F] (अपीलाथ"/Appellant) (%&यथ'/Respondent)

For Appellant: Shri. R. Vijayaraghavan, Advocate

…by the assessee on investment of share capital in call deposits even before production commenced could be assessed separately under the head “Other sources”. The Andhra Pradesh High Court took a contrary view in the case of CIT v. Nagarjuna Steels Ltd. [1988] 171 ITR 663 where it was held that interest received on short- term deposits by a company prior to the commencement of production could not be treated as revenue receipt. In view of the aforesaid conflict of decisions between the Madras and Andhra Pradesh High Courts, the Tribunal has referred the following question of law to this court for decision:” 7.1 A…

DCIT Cen Cir 1(2), Mumbai vs. Sears Construction P.Ltd, Mumbai

The appeal of the Revenue is dismissed

ITA 6975/MUM/2016[2012-13]Status: DisposedITAT Mumbai25 Jul 2018AY 2012-13

Bench: Shri Joginder Singh & Shri N.K. Pradhanassessment Year: 2012-13 Dcit, M/S. Sears Construction Central Circle-1(2), बनाम/ Pvt. Ltd. Room No.906, Pratishtha 514, Dalamal Towers, Vs. Bhavan, 10Th Floor, Old 211, Nariman Point, Cgo Building Annexe, Mumbai-400020 Mumbai-400020 (राज"व /Revenue) ("नधा"रती /Assessee) P.A. No. Aaacs5289E

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ, जे, मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “J”, MUMBAI "ी जो"ग"दर "संह, "या"यक सद"य एवं "ी एन. के. "धान, लेखा सद"य, के सम" Before Shri Joginder Singh, Judicial Member, and Shri N.K. Pradhan, Accountant Member Assessment Year: 2012-13 DCIT, M/s. Sears Construction Central Circle-1(2), बनाम/ Pvt. Ltd. Room No.906, Pratishtha 514, Dalamal Towers, Vs. Bhavan, 10th Floor, Old 211, Nariman Point, CGO Building Annexe, Mumbai-400020 Mumbai-400020 (राज"व /Revenue) ("नधा"रती /Assessee) P.A. No. AAACS5289E राज"व क" ओर से / Revenue by Shri C.S. Gulati CIT-DR "नधा"रती…

ITO, Ward - 1(1), Kolkata vs. M/S. Amba High-Rise Pvt. Ltd., Kolkata

In the result, Revenue’s appeal stands dismissed

ITA 2291/KOL/2010[2007-08]Status: DisposedITAT Kolkata27 Apr 2018AY 2007-08

Bench: Shri N.V.Vasudevan & Shri Waseem Ahmedassessment Year :2007-08 Income Tax Officer, V/S. M/S Amba High-Rise Pvt. Ward-1(1), P-7, Ltd., 68/2, Harish Chowringhee Square, Mukherjee Road, 7Th Floor, Kolkata-69 Kolkata-25 [Pan No.Aafca 7094 L] .. अपीलाथ" /Appellant ""यथ"/Respondent Shri S. Dasgupta, Addl. Cit-Dr अपीलाथ" क" ओर से/By Appellant Shri S.S. Gupta, Fca ""यथ" क" ओर से/By Respondent 14-02-2018 सुनवाई क" तार"ख/Date Of Hearing 27-04-2018 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per Waseem Ahmed:- This Appeal By The Revenue Is Directed Against The Order Of Commissioner Of Income Tax (Appeals)-I, Kolkata Dated 15.09.2010. Assessment Was Framed By Ito Ward-1(1), Kolkata U/S 144 Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) Vide His Order Dated 31.12.2009 For Assessment Year 2007-08 By Taking The Following Effective Grounds Of Appeal:- “1. On The Fact & In The Circumstances Of The Case As Well As In Law, The Ld. Cit(A) Erred In Deleting The Addition Of Interest Received On Bank Deposits To The Extent Of Rs.62,57,436/- As Income From Other Sources. 2. On The Facts & In The Circumstances Of The Case As Well As In Law, The Ld. Cit(A) Erred In Deleting The Addition Of Capital Expenditure Claimed Under The Head Loan Syndication Charges Of Rs.1,26,27,000/- 3. On The Facts & In The Circumstances Of The Case, The Ld. Cit(A) Erred In Deleting The Disallowance Interest Expenses Of Rs.86,90,220/- On Account Of Term Loan From Central Bank Of India Which Was Not

Section 144Section 194L

…sheet wherein the details of Land purchase, work in progress expenses, loans secured and unsecured taken by the company are reflected. Reliance was placed on the Andhra Pradesh High Court decision in the case of CIT vs. A.P. Forest Development Corporation in 171 ITR 663. The notes made by the ICAI also suggest that if any particular item of income can be directly attributable to a particular item of expenditure, the net amount should be treated in the appropriate manner depending upon its nature of activities. In the instant case, the Appellant had set off the interest income earned on unutilized amount of secur…

CIT v. Nagarjuna Steels Ltd. (171 ITR 663) — Cited in 12 Judgments | BharatTax