CIT v. Radico Khaitan Ltd.

274 ITR 354High Court2005#2042 most cited

What is CIT v. Radico Khaitan Ltd. authority for?

Where an assessee has mixed funds (borrowed and interest-free) and makes interest-free advances, it is presumed that such advances are made from interest-free funds if sufficient interest-free funds are available. This principle guides the disallowance of interest on borrowed capital under Section 36(1)(iii) if funds are diverted for non-business purposes without business expediency.

56

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2015 to 2025.

Also referred to as

CIT v. Radico Khaitan Ltd. · 274 ITR 354 · Section 36(1)(iii) · interest disallowance · mixed fund theory · interest-free advances · borrowed capital · business expediency · presumptive allocation · non-business purpose · Section 56

Sections most often in play

Section 143(3)Section 147Section 148Section 250Section 32(1)(ii)Section 38(2)Section 56Section 92CA

Issues it is cited on

section 80ia(8)interest free advancesbusiness expediencysection 194hsection 80icsection 194jsection 40a(2)(b)section 36(1)(iii)section 2(22)section 2(22)(e)section 40a(2)on-money

Judgments citing CIT v. Radico Khaitan Ltd.

ACIT, New Delhi vs. Shri Ravi Goyal, New Delhi

In the result, all the 05 Appeals filed by the Revenue stand dismissed

ITA 692/DEL/2012[1989-90]Status: DisposedITAT Delhi07 Apr 2017AY 1989-90

Bench: Shri H.S. Sidhu

For Appellant: NoneFor Respondent: Sh. F.R. Meena, Sr. DR
Section 143(3)Section 144Section 147

…law and likely to be deleted. We further note that the same view has been given by the then Ld. CIT(A) in the case of the assessee for A.Y. 1992-93. Reliance was also placed in the case of Commissioner of Income Tax and Others vs Radico Khaitan Ltd. (2004) 274 ITR 354 in which the Allahabad High Court has held that “the assessee company has sufficient funds other than the borrowed money for giving the amount in question as loan to its sister concern, which finding has not been specifically challenged in the present appeal, we are of the considered opinion that the conditions of section 36(1)(iii) of the Act…

ACIT, New Delhi vs. Shri Ravi Goyal, New Delhi

In the result, all the 05 Appeals filed by the Revenue stand dismissed

ITA 691/DEL/2012[1987-88]Status: DisposedITAT Delhi07 Apr 2017AY 1987-88

Bench: Shri H.S. Sidhu

For Appellant: NoneFor Respondent: Sh. F.R. Meena, Sr. DR
Section 143(3)Section 144Section 147

…law and likely to be deleted. We further note that the same view has been given by the then Ld. CIT(A) in the case of the assessee for A.Y. 1992-93. Reliance was also placed in the case of Commissioner of Income Tax and Others vs Radico Khaitan Ltd. (2004) 274 ITR 354 in which the Allahabad High Court has held that “the assessee company has sufficient funds other than the borrowed money for giving the amount in question as loan to its sister concern, which finding has not been specifically challenged in the present appeal, we are of the considered opinion that the conditions of section 36(1)(iii) of the Act…

ACIT, New Delhi vs. Shri Ravi Goyal, New Delhi

In the result, all the 05 Appeals filed by the Revenue stand dismissed

ITA 690/DEL/2012[1986-87]Status: DisposedITAT Delhi07 Apr 2017AY 1986-87

Bench: Shri H.S. Sidhu

For Appellant: NoneFor Respondent: Sh. F.R. Meena, Sr. DR
Section 143(3)Section 144Section 147

…law and likely to be deleted. We further note that the same view has been given by the then Ld. CIT(A) in the case of the assessee for A.Y. 1992-93. Reliance was also placed in the case of Commissioner of Income Tax and Others vs Radico Khaitan Ltd. (2004) 274 ITR 354 in which the Allahabad High Court has held that “the assessee company has sufficient funds other than the borrowed money for giving the amount in question as loan to its sister concern, which finding has not been specifically challenged in the present appeal, we are of the considered opinion that the conditions of section 36(1)(iii) of the Act…

ACIT, New Delhi vs. Shri Ravi Goyal, New Delhi

In the result, all the 05 Appeals filed by the Revenue stand dismissed

ITA 689/DEL/2012[1985-86]Status: DisposedITAT Delhi07 Apr 2017AY 1985-86

Bench: Shri H.S. Sidhu

For Appellant: NoneFor Respondent: Sh. F.R. Meena, Sr. DR
Section 143(3)Section 144Section 147

…law and likely to be deleted. We further note that the same view has been given by the then Ld. CIT(A) in the case of the assessee for A.Y. 1992-93. Reliance was also placed in the case of Commissioner of Income Tax and Others vs Radico Khaitan Ltd. (2004) 274 ITR 354 in which the Allahabad High Court has held that “the assessee company has sufficient funds other than the borrowed money for giving the amount in question as loan to its sister concern, which finding has not been specifically challenged in the present appeal, we are of the considered opinion that the conditions of section 36(1)(iii) of the Act…

ACIT, New Delhi vs. Shri Ravi Goyal, New Delhi

In the result, all the 05 Appeals filed by the Revenue stand dismissed

ITA 688/DEL/2012[1984-85]Status: DisposedITAT Delhi07 Apr 2017AY 1984-85

Bench: Shri H.S. Sidhu

For Appellant: NoneFor Respondent: Sh. F.R. Meena, Sr. DR
Section 143(3)Section 144Section 147

…law and likely to be deleted. We further note that the same view has been given by the then Ld. CIT(A) in the case of the assessee for A.Y. 1992-93. Reliance was also placed in the case of Commissioner of Income Tax and Others vs Radico Khaitan Ltd. (2004) 274 ITR 354 in which the Allahabad High Court has held that “the assessee company has sufficient funds other than the borrowed money for giving the amount in question as loan to its sister concern, which finding has not been specifically challenged in the present appeal, we are of the considered opinion that the conditions of section 36(1)(iii) of the Act…

Hero Motocorp Limited, New Delhi vs. JCIT, New Delhi

In the result appeal of the assessee in ITA No

ITA 1545/DEL/2015[2010-11]Status: DisposedITAT Delhi24 Oct 2016AY 2010-11

Bench: Sh. I. C. Sudhir & Shri Prashant Maharishihero Motocorp Limited, Jcit, 34, Basant Lok, Vasant Range-1, New Delhi Vs. Vihar, New Delhi Pan: Aaach0812J (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community Vs. New Delhi Centre, Basant Lok, Vasant Vihar, New Delhi-110057 (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. NC Sawain, CIT DR
Section 143Section 143(3)Section 144CSection 92C

…ents during the year. He relied upon the following decisions: i. East India Pharmaceuticals Works Ltd: v. CIT: 224 ITR 627 (SC), ii. Woolcombers of India Ltd. v. CIT: 134 ITR 219 (Cal) iii. CIT vs. Hotel Savera: 239 ITR 795 (Mad) iv. CIT v Radico Khitan Ltd : 274 ITR 354 (All) v. CIT v Dhampur Sugar Mills Ltd : 274 ITR 370 (All) vi. CIT v. United Collieries Ltd. : 49 Taxman 227 (Cal) vii. CIT v. Enamour Investment Ltd.: 72 Taxman 370 (Cal) viii. CIT v. Caroline Investment Ltd.: 87 Taxman 238 (Cal) ix. CIT v. Kanoria Investment (P) Ltd.: 232 ITR 7 (Cal) x. Tata Fertilizers Ltd. v. DCIT: 92 Taxman (Mag) 423 (Mum) x…

D.C.I.T Cir - 12, Kolkata vs. M/S Jct Limited., Kolkata

In the result the appeal by the revenue is dismissed

ITA 1106/KOL/2013[2004-05]Status: DisposedITAT Kolkata19 Oct 2016AY 2004-05

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Dr.Arjun Lal Saini, Am] I.T.A Nos. 1106 To 1109/Kol/2013 Assessment Years : 2004-05, 2006-07,2007-08 & 2008-09 D.C.I.T., Circle-12, -Vs.- M/S. J.C.T. Ltd. Kolkata Kolkata [Pan : Aaacj 6733 E] (Appellant) (Respondent) For The Appellant : Shri Angam Shaiza, Cit For The Respondent : Shri A.K.Gupta, Fca

For Appellant: Shri Angam Shaiza, CITFor Respondent: Shri A.K.Gupta, FCA
Section 145Section 145ASection 43B

…t advances having been made when there were no such borrowing and subsequent borrowing were also utilized for the purpose of the business. The Assessee relied on the decision of the Hon’ble Allahabad High Court in the case of CIT Vs Radico Khaitan Ltd. (2005) 274 ITR 354(All) wherein it was held that where interest free loan had been made to sister concerns in the earlier years and no interest were disallowed in earlier year, disallowance could not be made in the relevant Assessment Year particularly when the assessee had sufficient fund on a/c. of Share Capital, Share Premium, Reserve & Surplus out of which adva…

Asst CIT Ltu, Mumbai vs. Asian Paints Ltd, Mumbai

ITA 2364/MUM/2013[2004-05]Status: DisposedITAT Mumbai23 Sept 2016AY 2004-05

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

For Appellant: Shri K. ShivramFor Respondent: Shri Ganesh Bare
Section 142(1)Section 143(1)Section 143(2)

…आयकर अपील"य अ"धकरण,“ए” "यायपीठ, मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI "ी बी. आर. बा"करन, लेखा सद"य, एवं "ी अमरजीत "संह, "या"यक सद"य, के सम" BEFORE SHRI B.R.BASKARAN, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं/ I.T.A. No.1295/Mum/2013 ("नधा"रण वष" / Assessment Year: 2003-04) Asian Paints Ltd. Addl. Commissioner of बनाम/ 6A, Shanti Nagar, Income Tax –LTU Vs. Santacruz(East) Large Taxpayer Unit, Mumbai - 400055 29th Floor, World Trade Centre, Cuffe Parade, Mumbai - 400005 आयकर अपील सं/ I.T.A. No.3825/Mum/2012 ("नधा"रण वष" / Assessment Year: 2009-10) Asian Paints Ltd. बनाम/ Assistant Commissio…

Asst CIT Ltu, Mumbai vs. Asian Paints Ltd, Mumbai

ITA 2363/MUM/2013[2003-04]Status: DisposedITAT Mumbai23 Sept 2016AY 2003-04

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

For Appellant: Shri K. ShivramFor Respondent: Shri Ganesh Bare
Section 142(1)Section 143(1)Section 143(2)

…आयकर अपील"य अ"धकरण,“ए” "यायपीठ, मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI "ी बी. आर. बा"करन, लेखा सद"य, एवं "ी अमरजीत "संह, "या"यक सद"य, के सम" BEFORE SHRI B.R.BASKARAN, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं/ I.T.A. No.1295/Mum/2013 ("नधा"रण वष" / Assessment Year: 2003-04) Asian Paints Ltd. Addl. Commissioner of बनाम/ 6A, Shanti Nagar, Income Tax –LTU Vs. Santacruz(East) Large Taxpayer Unit, Mumbai - 400055 29th Floor, World Trade Centre, Cuffe Parade, Mumbai - 400005 आयकर अपील सं/ I.T.A. No.3825/Mum/2012 ("नधा"रण वष" / Assessment Year: 2009-10) Asian Paints Ltd. बनाम/ Assistant Commissio…

Asian Paints Ltd, Mumbai vs. Addl CIT Cen RG VIII, Mumbai

ITA 1295/MUM/2013[2003-04]Status: DisposedITAT Mumbai23 Sept 2016AY 2003-04

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

For Appellant: Shri K. ShivramFor Respondent: Shri Ganesh Bare
Section 142(1)Section 143(1)Section 143(2)

…आयकर अपील"य अ"धकरण,“ए” "यायपीठ, मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI "ी बी. आर. बा"करन, लेखा सद"य, एवं "ी अमरजीत "संह, "या"यक सद"य, के सम" BEFORE SHRI B.R.BASKARAN, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं/ I.T.A. No.1295/Mum/2013 ("नधा"रण वष" / Assessment Year: 2003-04) Asian Paints Ltd. Addl. Commissioner of बनाम/ 6A, Shanti Nagar, Income Tax –LTU Vs. Santacruz(East) Large Taxpayer Unit, Mumbai - 400055 29th Floor, World Trade Centre, Cuffe Parade, Mumbai - 400005 आयकर अपील सं/ I.T.A. No.3825/Mum/2012 ("नधा"रण वष" / Assessment Year: 2009-10) Asian Paints Ltd. बनाम/ Assistant Commissio…

Asian Paints Ltd ( Erstwhile Technical Instrument Manufacturers( India) Ltd), Mumbai vs. ACIT 10(1), Mumbai

ITA 3825/MUM/2012[2009-10]Status: DisposedITAT Mumbai23 Sept 2016AY 2009-10

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

For Appellant: Shri K. ShivramFor Respondent: Shri Ganesh Bare
Section 142(1)Section 143(1)Section 143(2)

…आयकर अपील"य अ"धकरण,“ए” "यायपीठ, मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI "ी बी. आर. बा"करन, लेखा सद"य, एवं "ी अमरजीत "संह, "या"यक सद"य, के सम" BEFORE SHRI B.R.BASKARAN, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं/ I.T.A. No.1295/Mum/2013 ("नधा"रण वष" / Assessment Year: 2003-04) Asian Paints Ltd. Addl. Commissioner of बनाम/ 6A, Shanti Nagar, Income Tax –LTU Vs. Santacruz(East) Large Taxpayer Unit, Mumbai - 400055 29th Floor, World Trade Centre, Cuffe Parade, Mumbai - 400005 आयकर अपील सं/ I.T.A. No.3825/Mum/2012 ("नधा"रण वष" / Assessment Year: 2009-10) Asian Paints Ltd. बनाम/ Assistant Commissio…

Merind Ltd, Mumbai vs. ACIT Cen Cir 14, Mumbai

In the result appeal filed by the assessee for the A

ITA 905/MUM/2011[2003-04]Status: DisposedITAT Mumbai12 Aug 2016AY 2003-04

Bench: Shri D. Karunakara Rao (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2003-04

For Appellant: Shri. M.P.LohiaFor Respondent: Shri. M. Rajan
Section 143(1)Section 143(3)Section 35Section 36(1)(iii)

…sessee's claim is to be allowed. 13. Thirdly, since capital plus reserves exceeds the investments, no disallowance of interest is warranted, in respect of interest bearing borrowings. This proposition has been laid out in the case of CIT Vs Radico Khaitan Ltd 274 ITR 354 (All.) wherein it has been held as under: "Tribunal having found on facts that assessee had sufficient funds in the form of capital reserve and surplus other than the borrowed funds, assessee was entitled to full allowance of interest on borrowed money. 14. The Co-ordinate Bench of the Mumbai Tribunal in the case of Grasim Industries Vs DCIT 64 T…

Merind Ltd, Mumbai vs. ACIT Cen Cir 14, Mumbai

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

ITA 904/MUM/2011[2002-03]Status: DisposedITAT Mumbai31 May 2016AY 2002-03

Bench: Shri D. Karunakara Rao & Shri Pawan Singhassessment Year: 2002-03 Merind Limited, Acit Range- 10(3), Mulund Goregaon Link Aayakar Bhavan, M. K. Road, Road, Bhandup (West), Vs. Mumbai-400020. Mumbai-400078 Pan: Aaacm2735P (Appellant) (Respondent)

For Respondent: Shri K P R R Murty (DR)
Section 143(3)Section 234DSection 35Section 36(1)(iii)

…sessee's claim is to be allowed. 13. Thirdly, since capital plus reserves exceeds the investments, no disallowance of interest is warranted, in respect of interest bearing borrowings. This proposition has been laid out in the case of CIT Vs Radico Khaitan Ltd 274 ITR 354 (All.) wherein it has been held as under: "Tribunal having found on facts that assessee had sufficient funds in the form of capital reserve and surplus other than the borrowed funds, assessee was entitled to full allowance of interest on borrowed money. 14. The Co-ordinate Bench of the Murnbai Tribunal in the case of Grasirn Industries Vs DCIT 64…

Usha Martin Ventures Limited, Kolkata vs. D.C.I.T Cir - 6, Kolkata.

In the result, assessee’s appeal is allowed

ITA 847/KOL/2013[2009-10]Status: DisposedITAT Kolkata29 Feb 2016AY 2009-10

Bench: Shri Mahavir Singh & Shri Waseem Ahmedassessment Year :2009-10 Usha Martin Ventures V/S. Dcit, Circle-6 Ltd., 24, R.N.Mukherjee Aaykar Bhawan, P-7, Road, 2Nd Floor, Kolkata- Chowringhee Squre, 700 001 Kolkata-700 069 [Pan No.Aaacu 3843 J] .. अपीलाथ" /Appellant ""यथ"/Respondent

Section 115JSection 143(3)Section 14ASection 48Section 50(2)

…ds used for acquiring investments. The quantum of borrowed funds used for such investments could be arrived at by reference to the following decisions: i) CIT vs Reliance Utilities & Power Ltd. (2009) 178 Taxman 135 (Bom) ii) CIT vs. Dhampur Sugar Mills Ltd. 274 ITR 370 (All) iii) Britannia Industries Ltd. vs. JCIT 271 ITR 123 (Cal) iv) Bunge Agribusiness (India) (P) Ltd. v. Dy. CIT (2011) 64 DTR 201 (Mum.) (Trib.) In the above cases it was held that the available funds of the company should be treated as invested in tax free securities. Thus only balance amount of investment may be treated as having been made…

M/S. Ganpati Associates, Meerut vs. ITO, Meerut

In the result the appeal of the assessee is allowed in terms of the pronouncement made at the time of hearing

ITA 1692/DEL/2012[1996-97]Status: DisposedITAT Delhi08 Feb 2016AY 1996-97

Bench: Smt Diva Singh & Sh.O.P.Kant

Section 147Section 271(1)(c)

…. (iii) Whether the ITAT was right in confirming the disallowance of interest of Rs.5,93,644 when the loan was used for business purpose and all the conditions of section 36(1)(iii) of the Act was fulfilled as held in case of CIT vs Radico Khaitan Ltd. (2005) 274 ITR 354 (Alld.)? (iv) Whether the ITAT is right in disallowing the loss of Rs.4,50,675 on purchase and sale of cotton on ground of speculation applying section 43(5) of the Act, when the transaction was on delivery basis carried through pakka arhatiya? 7. Considering the facts as pleaded which have not been rebutted by the Revenue, we find that since on…

Brigade Enterprises Ltd, Bangalore vs. Additional Commissioner of Income Tax, Bangalore

In the result, the assessee’s appeal is treated as partly allowed

ITA 1275/BANG/2014[2010-11]Status: DisposedITAT Bangalore08 Jul 2015AY 2010-11

Bench: Smt. P. Madhavi Devi & Shri Abraham P Georgem/S.Brigade Enterprises Ltd., 29Th & 30Th Floor, World Trade Centre, Brigade Gateway Campus, 26/1, Dr.Rajkumar Road, Rajajinagar, Bangalore-560055. … Appellant Pan: Aaacb7459F Vs. Addl. Commissioner Of Income-Tax, Range-11, Bangalore. … Respondent

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Dr. P.K.Srihari, Addl.CIT(DR)
Section 10(35)Section 143(3)Section 14A

…IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER and SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER M/s.Brigade Enterprises Ltd., 29th & 30th floor, World Trade Centre, Brigade Gateway Campus, 26/1, Dr.Rajkumar Road, Rajajinagar, Bangalore-560055. … Appellant PAN: AAACB7459F Vs. Addl. Commissioner of Income-tax, Range-11, Bangalore. … Respondent AND Deputy Commissioner of Income-tax, Circle 11(2), Bangalore. … Appellant Vs. M/s.Brigade Enterprises Ltd., Bangalore. … Respondent Assessee by: Shri Padamchand Khincha, CA. Revenue by: Dr. P.K.Srihari, Addl.CIT(DR).…