CIT v. Reliance Industries Ltd.

410 ITR 466Supreme Court of India2019#137 most cited

What is CIT v. Reliance Industries Ltd. authority for?

When mixed funds are available, interest-free advances are presumed to be made from the assessee's own interest-free funds, preventing disallowance of interest expenditure under section 36(1)(iii). This principle also applies to section 14A disallowance, where interest expenditure is not disallowed if surplus funds are available and no direct nexus is established with borrowed funds for investments earning exempt income.

501

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2016 to 2026.

Also referred to as

CIT v. Reliance Industries Ltd. · 410 ITR 466 · section 36(1)(iii) · section 14A · interest free advances · disallowance of interest expenditure · mixed funds presumption · interest free funds · commercial expediency · disallowance for exempt income

Also reported as

102 Taxmann.com 52307 CTR 121261 Taxmann 165175 DTR 1

Sections most often in play

Section 36(1)(iii)Section 14ASection 143(3)Section 1961Section 40(a)(ia)Section 1962Section 143(2)Section 8D

Issues it is cited on

interest free advancessection 36(1)(iii)disallowance of interest expenditureweighted deductionsection 35(2ab)commercial expediencysection 14a(2)disallowance under section 14adisallowance u/s 14abusiness expediencyput to usesection 36(1)

Judgments citing CIT v. Reliance Industries Ltd.

M/S Garg Furnace Ltd., Ludhiana vs. DCIT, CC-3, Ludhiana

In the result, the appeal is allowed

ITA 382/CHANDI/2023[2017-18]Status: DisposedITAT Chandigarh10 Apr 2024AY 2017-18

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Ashwani Kumar &For Respondent: Shri Amanpreet Kaur, Sr.DR
Section 36(1)(iii)Section 37

…eserves and surplus of the assessee was at Rs.4,37,98,803/-; that in such a scenario, in keeping with the following decisions, no such disallowance u/s 36(1)(iii) of the Act was warranted : ITA 382/CHD/2023 A.Y.2017-18 6 i) “CIT Vs Reliance Industries Ltd.”, 410 ITR 466 (S.C.) ii) CIT Vs. Satish Bala Malhotra (Punjab & Haryana High Court), 387 ITR 403 iii) Bright Enterprises Pvt. Ltd. vs. CIT (Punjab,& Haryana High Court), 381 ITR 107 iv) Gurdas Garg vs. CIT (Punjab & Haryana High Court), 63 taxmann.com 289 SEL Manufacturing Co. Ltd. (Chandigarh Tribunal), 186 TTJ 1 v) Fastway Transmissions (P.) Ltd. Vs. ACIT (C…

Axis Bank Limited, Ahmedabad vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad

The appeal of the assessee is partly allowed for statistical purposes

ITA 365/AHD/2022[2018-19]Status: DisposedITAT Ahmedabad10 Apr 2024AY 2018-19

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumarिनधा"रण वष"/Assessment Year: 2018-19 Axis Bank Limited, Vs. Assistant Commissioner Of “Trishul”, 3Rd Floor, Opp. Income-Tax, Samartheshwar Temple, Nr. Law Circle 1(1)(1), Garden, Ellisbridge, Ahmedabad Ahmedabad-380006 Pan : Aaacu 2414 K अपीलाथ" अपीलाथ"/ (Appellant) अपीलाथ" अपीलाथ" "" "" यथ" "" "" यथ" यथ"/ (Respondent) यथ" Assessee By : Shri Tushar Hemani, Sr. Advocate & Shri Parimalsinh B. Parmar, Ar Revenue By : Dr. Darsi Suman Ratnam, Cit-Dr सुनवाई क" तारीख/Date Of Hearing : 29.11.2023/03.04.2024 घोषणा क" तारीख /Date Of Pronouncement: 10.04.2024 आदेश आदेश/O R D E R आदेश आदेश Per Annapurna Gupta: By Way Of This Appeal, The Assessee-Appellant Has Challenged Correctness Of The Order Dated 28Th July, 2022 Passed By The Assessing Officer Under Section 143(3) R.W.S. 144C(13) R.W.S. 144B Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act” For Short], For The Assessment Year (Ay) 2018-19. 2. Ground No.1 Raised By The Assessee Reads As Under:- “1. Disallowance In Respect Of Annual Technical Fees (Tax Effect - Rs. 16,84,276) 1.1 The Learned Drp Has Erred In Upholding Addition Made By Ao In Respect Of Treating Annual Technical Services (Ats) Fees Paid To Infosys Limited To The Extent Of Rs. 48.66 Lacs As Prior Period Expense. 1.2. It Is Submitted That The Expenditure Relates To Amount Payable To Infosys & No Part Of The Amount Was Claimed As Expenditure At Any Time In The 2 Axis Bank Limited Vs. Acit Ay : 2018-19

For Appellant: Shri Tushar Hemani, Sr. Advocate &For Respondent: Dr. Darsi Suman Ratnam, CIT-DR
Section 143(3)Section 144C

…rpose of making investment in 11 Axis Bank Limited Vs. ACIT AY : 2018-19 securities, warranting no disallowance of interest under section 14A of the Act, which proposition has been settled by the Hon’ble Apex Court in the case of CIT Vs. Reliance Industries, 410 ITR 466. 15. The AO, we find, has not touched upon and made no adverse comment on the specific explanation offered by the assessee regarding the methodology adopted for allocating the expenses for the purpose of earning exempt income, as pointed out to us above. The AO, we find has made only certain general comments for rejecting the assessee’s explanati…

Partha Priya Banerjee, Burdwan vs. ACIT, Cir-2, Durgapur.

In the result, the appeal of the assessee is partly allowed

ITA 1027/KOL/2023[2011-12]Status: DisposedITAT Kolkata10 Apr 2024AY 2011-12

Bench: Shri Sonjoysarma & Shri Girish Agrawal]

Section 143(2)Section 143(3)Section 2(22)(e)Section 263

…t correct and the funds deployed by the assessee to its 6 group concerns from its own funds. The ld. AR in order to substantiate its claim reliance was placed to the decision of Hon’ble Supreme Court in the case of Reliance Utilities & Powers Ltd. reported in 410 ITR 466. Since the money was given from own funds as commercial expediency no disallowance of interest can be made. He further stated that interest expenditure claimed by the assessee cannot have been disallowed unless the AO is able to demonstrate that there was no nexus between the expenditure and the purpose of business. The ld. AR also pointed out th…

Express Publications (Madurai)Private Ltd., Chennai vs. DCIT, Corporate Circle-II(1), Chennai

Appeal stand dismissed

ITA 754/CHNY/2023[2012-13]Status: DisposedITAT Chennai27 Mar 2024AY 2012-13

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपीलसं./ Ita No.730/Chny/2023 (िनधा*रणवष* / Assessment Year: 2010-11) & 2. आयकरअपीलसं./ Ita No.737/Chny/2023 (िनधा*रणवष* / Assessment Year: 2011-12) & 3. आयकरअपीलसं./ Ita No.754/Chny/2023 (िनधा*रणवष* / Assessment Year: 2012-13) M/S. Express Publications (Madurai) Dcit P. Ltd. Corporate Circle-Ii(1) बनाम/ C/O. Sri T.N. Seetharaman, Advocate Chennai. Vs. 384 (Old No.196) Lloyds Road, Chennai-600 086. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaci-0842-D (अपीलाथ"/Appellant) : (" थ" / Respondent) & 4. आयकरअपीलसं./ Ita No.1219/Chny/2023 (िनधा*रणवष* / Assessment Year: 2012-13) Dcit M/S. Express Publications (Madurai) P. Corporate Circle-Ii(1) Ltd. बनाम/ Vs. Chennai C/O. Sri T.N.Seetharaman, Advocate 384 (Old No.196) Lloyds Road, Chennai-600 086. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaci-0842-D (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओरसे/ Assessee By : Shri T.N. Seetharaman (Advocate)- Ld.Ar " थ"कीओरसे/Revenue By : Shri D. Hema Bhupal (Jcit)-Ld. Dr सुनवाई की तारीख/Date Of Hearing : 20-03-2024 घोषणा की तारीख /Date Of Pronouncement : 27-03-2024

For Appellant: Shri T.N. Seetharaman (Advocate)- Ld.ARFor Respondent: Shri D. Hema Bhupal (JCIT)-Ld. DR
Section 143(3)Section 36(1)(iii)

…ut in the Grounds of Appeal and Written Submissions dt.07.07.2022 / 20.12.2022 and the following judicial decisions cited in the present appellant's favour: i) S.A.Builders Limited vs. CIT (2007) 288 ITR 1 (SC) ii) CIT (LTU) vs. Reliance Industries Ltd (2019) 410 ITR 466 (SC) iii) CIT vs. Hotel Savera (1999) 239 ITR 795 (Mad) 3. The appellant submits that it had interest free funds to the tune of Rs.60 Crores against the Balance due from the Group Companies of Rs.7,32,75,428/- and on such facts I as per judicial decisions it must be presumed that the moneys due were relatable to interest free funds. On the afores…

Express Publications (Madurai)Private Ltd., Chennai vs. DCIT, Corporate Circle-II(1), Chennai

Appeal stand dismissed

ITA 737/CHNY/2023[2011-12]Status: DisposedITAT Chennai27 Mar 2024AY 2011-12

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपीलसं./ Ita No.730/Chny/2023 (िनधा*रणवष* / Assessment Year: 2010-11) & 2. आयकरअपीलसं./ Ita No.737/Chny/2023 (िनधा*रणवष* / Assessment Year: 2011-12) & 3. आयकरअपीलसं./ Ita No.754/Chny/2023 (िनधा*रणवष* / Assessment Year: 2012-13) M/S. Express Publications (Madurai) Dcit P. Ltd. Corporate Circle-Ii(1) बनाम/ C/O. Sri T.N. Seetharaman, Advocate Chennai. Vs. 384 (Old No.196) Lloyds Road, Chennai-600 086. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaci-0842-D (अपीलाथ"/Appellant) : (" थ" / Respondent) & 4. आयकरअपीलसं./ Ita No.1219/Chny/2023 (िनधा*रणवष* / Assessment Year: 2012-13) Dcit M/S. Express Publications (Madurai) P. Corporate Circle-Ii(1) Ltd. बनाम/ Vs. Chennai C/O. Sri T.N.Seetharaman, Advocate 384 (Old No.196) Lloyds Road, Chennai-600 086. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaci-0842-D (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओरसे/ Assessee By : Shri T.N. Seetharaman (Advocate)- Ld.Ar " थ"कीओरसे/Revenue By : Shri D. Hema Bhupal (Jcit)-Ld. Dr सुनवाई की तारीख/Date Of Hearing : 20-03-2024 घोषणा की तारीख /Date Of Pronouncement : 27-03-2024

For Appellant: Shri T.N. Seetharaman (Advocate)- Ld.ARFor Respondent: Shri D. Hema Bhupal (JCIT)-Ld. DR
Section 143(3)Section 36(1)(iii)

…ut in the Grounds of Appeal and Written Submissions dt.07.07.2022 / 20.12.2022 and the following judicial decisions cited in the present appellant's favour: i) S.A.Builders Limited vs. CIT (2007) 288 ITR 1 (SC) ii) CIT (LTU) vs. Reliance Industries Ltd (2019) 410 ITR 466 (SC) iii) CIT vs. Hotel Savera (1999) 239 ITR 795 (Mad) 3. The appellant submits that it had interest free funds to the tune of Rs.60 Crores against the Balance due from the Group Companies of Rs.7,32,75,428/- and on such facts I as per judicial decisions it must be presumed that the moneys due were relatable to interest free funds. On the afores…

Express Publications (Madurai)Private Ltd., Chennai vs. DCIT, Corporate Circle-II(1), Chennai

Appeal stand dismissed

ITA 730/CHNY/2023[2010-11]Status: DisposedITAT Chennai27 Mar 2024AY 2010-11

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपीलसं./ Ita No.730/Chny/2023 (िनधा*रणवष* / Assessment Year: 2010-11) & 2. आयकरअपीलसं./ Ita No.737/Chny/2023 (िनधा*रणवष* / Assessment Year: 2011-12) & 3. आयकरअपीलसं./ Ita No.754/Chny/2023 (िनधा*रणवष* / Assessment Year: 2012-13) M/S. Express Publications (Madurai) Dcit P. Ltd. Corporate Circle-Ii(1) बनाम/ C/O. Sri T.N. Seetharaman, Advocate Chennai. Vs. 384 (Old No.196) Lloyds Road, Chennai-600 086. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaci-0842-D (अपीलाथ"/Appellant) : (" थ" / Respondent) & 4. आयकरअपीलसं./ Ita No.1219/Chny/2023 (िनधा*रणवष* / Assessment Year: 2012-13) Dcit M/S. Express Publications (Madurai) P. Corporate Circle-Ii(1) Ltd. बनाम/ Vs. Chennai C/O. Sri T.N.Seetharaman, Advocate 384 (Old No.196) Lloyds Road, Chennai-600 086. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaci-0842-D (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओरसे/ Assessee By : Shri T.N. Seetharaman (Advocate)- Ld.Ar " थ"कीओरसे/Revenue By : Shri D. Hema Bhupal (Jcit)-Ld. Dr सुनवाई की तारीख/Date Of Hearing : 20-03-2024 घोषणा की तारीख /Date Of Pronouncement : 27-03-2024

For Appellant: Shri T.N. Seetharaman (Advocate)- Ld.ARFor Respondent: Shri D. Hema Bhupal (JCIT)-Ld. DR
Section 143(3)Section 36(1)(iii)

…ut in the Grounds of Appeal and Written Submissions dt.07.07.2022 / 20.12.2022 and the following judicial decisions cited in the present appellant's favour: i) S.A.Builders Limited vs. CIT (2007) 288 ITR 1 (SC) ii) CIT (LTU) vs. Reliance Industries Ltd (2019) 410 ITR 466 (SC) iii) CIT vs. Hotel Savera (1999) 239 ITR 795 (Mad) 3. The appellant submits that it had interest free funds to the tune of Rs.60 Crores against the Balance due from the Group Companies of Rs.7,32,75,428/- and on such facts I as per judicial decisions it must be presumed that the moneys due were relatable to interest free funds. On the afores…

Income Tax Officer, Chennai vs. Express Publications(Madurai) Private Limited, Chennai

Appeal stand dismissed

ITA 1219/CHNY/2023[2012-2013]Status: DisposedITAT Chennai27 Mar 2024AY 2012-2013

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपीलसं./ Ita No.730/Chny/2023 (िनधा*रणवष* / Assessment Year: 2010-11) & 2. आयकरअपीलसं./ Ita No.737/Chny/2023 (िनधा*रणवष* / Assessment Year: 2011-12) & 3. आयकरअपीलसं./ Ita No.754/Chny/2023 (िनधा*रणवष* / Assessment Year: 2012-13) M/S. Express Publications (Madurai) Dcit P. Ltd. Corporate Circle-Ii(1) बनाम/ C/O. Sri T.N. Seetharaman, Advocate Chennai. Vs. 384 (Old No.196) Lloyds Road, Chennai-600 086. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaci-0842-D (अपीलाथ"/Appellant) : (" थ" / Respondent) & 4. आयकरअपीलसं./ Ita No.1219/Chny/2023 (िनधा*रणवष* / Assessment Year: 2012-13) Dcit M/S. Express Publications (Madurai) P. Corporate Circle-Ii(1) Ltd. बनाम/ Vs. Chennai C/O. Sri T.N.Seetharaman, Advocate 384 (Old No.196) Lloyds Road, Chennai-600 086. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaaci-0842-D (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओरसे/ Assessee By : Shri T.N. Seetharaman (Advocate)- Ld.Ar " थ"कीओरसे/Revenue By : Shri D. Hema Bhupal (Jcit)-Ld. Dr सुनवाई की तारीख/Date Of Hearing : 20-03-2024 घोषणा की तारीख /Date Of Pronouncement : 27-03-2024

For Appellant: Shri T.N. Seetharaman (Advocate)- Ld.ARFor Respondent: Shri D. Hema Bhupal (JCIT)-Ld. DR
Section 143(3)Section 36(1)(iii)

…ut in the Grounds of Appeal and Written Submissions dt.07.07.2022 / 20.12.2022 and the following judicial decisions cited in the present appellant's favour: i) S.A.Builders Limited vs. CIT (2007) 288 ITR 1 (SC) ii) CIT (LTU) vs. Reliance Industries Ltd (2019) 410 ITR 466 (SC) iii) CIT vs. Hotel Savera (1999) 239 ITR 795 (Mad) 3. The appellant submits that it had interest free funds to the tune of Rs.60 Crores against the Balance due from the Group Companies of Rs.7,32,75,428/- and on such facts I as per judicial decisions it must be presumed that the moneys due were relatable to interest free funds. On the afores…

Agarwal Industries Private Limited, Hyderabad vs. Income Tax Officer, Ward-1(2), Hyderabad

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

ITA 812/HYD/2019[2014-15]Status: DisposedITAT Hyderabad22 Mar 2024AY 2014-15

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumar

For Appellant: Shri Sunil Kumar Jain, CAFor Respondent: Smt. K. Haritha, CIT(DR) and Smt. Sheetal Sarin, DR
Section 37Section 37(1)

…e above proposition of law of the Bombay High Court would now be appreciated in the following discussion. 18. In the above context, it would be apposite to refer to a similar decision in CIT v. Reliance Industries Ltd. [2019] 102 taxmann.com 52/261 Taxman 165/410 ITR 466 (SC), where a Division Bench of this Court expressly held that where there is finding of fact that interest free funds available to assessee were sufficient to meet its investment it will be presumed that investments were made from such interest free funds. 19. In HDFC Bank Ltd. v. Dy. CIT [2016] 67 taxmann.com 42/383 ITR 529 (Bom.), the assessee…

The Hindustan Times Ltd., New Delhi vs. ACIT, New Delhi

In the result, both the appeals of the assessee for the Asst Year 2010-11

ITA 1227/DEL/2015[2010-11]Status: DisposedITAT Delhi31 Jan 2024AY 2010-11

Bench: Shri Saktijit Dey & Shri M. Balaganeshm/S. The Hindustan Times Ltd, Vs. Dcit, 18-20, Kg Marg, New Delhi Circle-16(1), New Delhi (Appellant) (Respondent) Pan:Aaact4962F M/S. The Hindustan Times Ltd, Vs. Dcit, 18-20, Kg Marg, New Delhi Circle-16(1), New Delhi (Appellant) (Respondent) Pan:Aaact4962F

For Appellant: Shri Rohit Jain, AdvFor Respondent: Shri Anuj Garg, Sr. DR
Section 115JSection 143(3)Section 14A

…erwise, the assessee is having sufficient interest free funds in its kitty to make investments which had yielded exempt income. Accordingly, by placing reliance on the decision of Hon‟ble Supreme Court in the case of CIT vs Reliance Industries Ltd reported in 410 ITR 466 (SC), the disallowance of interest made thereon is hereby directed to be deleted on merits for more than one reason as stated supra. 13.7. In view of the aforesaid observations, we hold that the ld. AO had not recorded any objective satisfaction having regard to the accounts of the assessee as to why the suo moto disallowance made by the assessee…

The Hindustan Times Ltd., New Delhi vs. ACIT, New Delhi

In the result, both the appeals of the assessee for the Asst Year 2010-11

ITA 1226/DEL/2015[2010-11]Status: DisposedITAT Delhi31 Jan 2024AY 2010-11

Bench: Shri Saktijit Dey & Shri M. Balaganeshm/S. The Hindustan Times Ltd, Vs. Dcit, 18-20, Kg Marg, New Delhi Circle-16(1), New Delhi (Appellant) (Respondent) Pan:Aaact4962F M/S. The Hindustan Times Ltd, Vs. Dcit, 18-20, Kg Marg, New Delhi Circle-16(1), New Delhi (Appellant) (Respondent) Pan:Aaact4962F

For Appellant: Shri Rohit Jain, AdvFor Respondent: Shri Anuj Garg, Sr. DR
Section 115JSection 143(3)Section 14A

…erwise, the assessee is having sufficient interest free funds in its kitty to make investments which had yielded exempt income. Accordingly, by placing reliance on the decision of Hon‟ble Supreme Court in the case of CIT vs Reliance Industries Ltd reported in 410 ITR 466 (SC), the disallowance of interest made thereon is hereby directed to be deleted on merits for more than one reason as stated supra. 13.7. In view of the aforesaid observations, we hold that the ld. AO had not recorded any objective satisfaction having regard to the accounts of the assessee as to why the suo moto disallowance made by the assessee…

The Hindustan Times Ltd., New Delhi vs. ACIT, New Delhi

In the result, both the appeals of the assessee for the Asst Year 2010-11

ITA 6512/DEL/2013[2009-10]Status: DisposedITAT Delhi31 Jan 2024AY 2009-10

Bench: Shri Saktijit Dey & Shri M. Balaganeshm/S. The Hindustan Times Ltd, Vs. Dcit, 18-20, Kg Marg, New Delhi Circle-16(1), New Delhi (Appellant) (Respondent) Pan:Aaact4962F M/S. The Hindustan Times Ltd, Vs. Dcit, 18-20, Kg Marg, New Delhi Circle-16(1), New Delhi (Appellant) (Respondent) Pan:Aaact4962F

For Appellant: Shri Rohit Jain, AdvFor Respondent: Shri Anuj Garg, Sr. DR
Section 115JSection 143(3)Section 14A

…erwise, the assessee is having sufficient interest free funds in its kitty to make investments which had yielded exempt income. Accordingly, by placing reliance on the decision of Hon‟ble Supreme Court in the case of CIT vs Reliance Industries Ltd reported in 410 ITR 466 (SC), the disallowance of interest made thereon is hereby directed to be deleted on merits for more than one reason as stated supra. 13.7. In view of the aforesaid observations, we hold that the ld. AO had not recorded any objective satisfaction having regard to the accounts of the assessee as to why the suo moto disallowance made by the assessee…

M/S. the Hindustan Times Ltd., New Delhi vs. DCIT, New Delhi

In the result, both the appeals of the assessee for the Asst Year 2010-11

ITA 1629/DEL/2012[2008-09]Status: DisposedITAT Delhi31 Jan 2024AY 2008-09

Bench: Shri Saktijit Dey & Shri M. Balaganeshm/S. The Hindustan Times Ltd, Vs. Dcit, 18-20, Kg Marg, New Delhi Circle-16(1), New Delhi (Appellant) (Respondent) Pan:Aaact4962F M/S. The Hindustan Times Ltd, Vs. Dcit, 18-20, Kg Marg, New Delhi Circle-16(1), New Delhi (Appellant) (Respondent) Pan:Aaact4962F

For Appellant: Shri Rohit Jain, AdvFor Respondent: Shri Anuj Garg, Sr. DR
Section 115JSection 143(3)Section 14A

…erwise, the assessee is having sufficient interest free funds in its kitty to make investments which had yielded exempt income. Accordingly, by placing reliance on the decision of Hon‟ble Supreme Court in the case of CIT vs Reliance Industries Ltd reported in 410 ITR 466 (SC), the disallowance of interest made thereon is hereby directed to be deleted on merits for more than one reason as stated supra. 13.7. In view of the aforesaid observations, we hold that the ld. AO had not recorded any objective satisfaction having regard to the accounts of the assessee as to why the suo moto disallowance made by the assessee…

Southern Petrochemical Industries Corporation Limited, Chennai vs. ITO Corporate Ward 3(1), Chennai

The appeal stand allowed accordingly

ITA 95/CHNY/2023[2009-10]Status: DisposedITAT Chennai10 Jan 2024AY 2009-10

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.95/Chny/2023 (िनधा)रण वष) / Assessment Year: 2009-10) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2023 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 14A

…e under rule 8D(2)(ii) in view of the availability of sufficient own funds for making the investments. CIT vs. Microlabs Ltd -383 ITR 490 Kar. PCIT v Sintex Industries - 403 ITR 418 Guj confirmed by 93 Taxman.com 24 SC. CIT (LTU) Vs. Reliance Industries Ltd - 307 CTR 121 SC. 2.6 The CIT(A) / NFAC ought to have directed that disallowance under Rule 8D(2)(ii) and 8D(2)(iii) should be made only in respect of investments from which Dividend has actually been earned during the year. The Appellant relies on the following among other decisions: ACB India Ltd vs. ACIT 374 ITR 108 del. ACIT Vs VIREET INVESTMENT PVT LTD 16…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

Appeal stands dismissed

ITA 84/CHNY/2023[2008-09]Status: DisposedITAT Chennai10 Jan 2024AY 2008-09

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.84/Chny/2023 (िनधा)रण वष) / Assessment Year: 2008-09) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 115JSection 143(3)Section 14ASection 35Section 35(3)Section 43B

…e under rule 8D(2)(ii) in view of the availability of sufficient own funds for making the investments. CIT vs. Microlabs Ltd -383 ITR 490 Kar. PCIT v Sintex Industries - 403 ITR 418 Guj confirmed by 93 Taxman.com 24 SC. CIT (LTU) Vs. Reliance Industries Ltd - 307 CTR 121 SC. 3.1 The CIT(A) / NFAC erred in confirming the interest disallowance of Rs.8,95,30,266/- as being interest on borrowings relatable to interestingly advances given to group companies. 3.2 The CIT(A) /NFAC ought to have appreciated that the appellant had sufficient interest free funds available to them to cover the advances made to the group com…

M/S Southern Petrochemical Industries Corporation Limited, Chennai vs. The ITO, Corportion Ward-3(1), Chennai

The appeal stand allowed in terms of our above order

ITA 388/CHNY/2023[2010-11]Status: DisposedITAT Chennai10 Jan 2024AY 2010-11

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.388/Chny/2023 (िनधा)रण वष) / Assessment Year: 2010-11) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)

…of such advances. 3.3 The appellant reliance on among other decisions: CIT vs. Bharti Televenture Ltd 331 ITR 502 Del. Reliance Utility and Power Ltd. vs. CIT, 313 ITR 340 (Bom.) CIT vs. Hotel Savera - 239 ITR 795 (Mad) CIT (LTU) Vs. Reliance Industries Ltd - 307 CTR 121 SC-Civil Appeal PCIT v Sintex Industries 403 ITR 418 Guj confirmed by93 Taxman.com 24 SC. As is evident, the additions / disallowance which forms the subject matter of this appeal are i.e., (i) Disallowance of bad debts written-off; (ii) Disallowance of proportionate interest expenditure. 2. The Ld. AR advanced arguments on impugned issues citin…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

The appeal stands partly allowed in terms of our above order

ITA 210/CHNY/2023[2007-08]Status: DisposedITAT Chennai10 Jan 2024AY 2007-08

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.210/Chny/2023 (िनधा)रण वष) / Assessment Year: 2007-08) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 115JSection 143(3)Section 28Section 36(1)(vii)

…advances to subsidiaries and group companies due to commercial exigency hence no disallowance on proportionate interest is called for. 2.2 The Appellant relies on the decision of Honb'le Supreme court in the case of CIT Vs Reliance Industries Ltd, reported in 307 CTR 121 (SC). 3. The CIT(A) / NFAC erred in confirming the disallowance of bad debts Written off amounting to Rs.71,56,03,302/-. 3.1 The CIT(A) / NFAC ought to have appreciated that out of the total amount, a sum of Rs.35,79,61,690/- was due from the government of India towards reimbursement of handling charges not sanctioned by them and Rs.14,54,74,336/…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

The appeal stands partly allowed

ITA 209/CHNY/2023[2006-07]Status: DisposedITAT Chennai10 Jan 2024AY 2006-07

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1.आयकरअपील सं./ Ita No.208/Chny/2023 (िनधा*रण वष* / Assessment Year: 2006-07) & 2.आयकरअपील सं./ Ita No.209/Chny/2023 (िनधा*रण वष* / Assessment Year: 2006-07) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)

…ances to subsidiaries and group companies due to commercial exigency hence no disallowance on proportionate interest is called for. 2.3 The appellant relied on the decision of Hon’ble Supreme Court in the case of CIT vs. Reliance Industries Ltd., reported in 307 CTR 121 (SC). 3. The CIT(A) / NFAC erred in confirming the disallowance of Bad Debts written-off amounting to Rs.34,11,331/-. 3.1 The Commissioner of Income Tax (Appeals) ought to have appreciated that the amounts written off represents debts that became irrecoverable from the trade debtors and written off as bad debts in the books of accounts. The asses…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

The appeal stands partly allowed

ITA 208/CHNY/2023[2006-07]Status: DisposedITAT Chennai10 Jan 2024AY 2006-07

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1.आयकरअपील सं./ Ita No.208/Chny/2023 (िनधा*रण वष* / Assessment Year: 2006-07) & 2.आयकरअपील सं./ Ita No.209/Chny/2023 (िनधा*रण वष* / Assessment Year: 2006-07) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)

…ances to subsidiaries and group companies due to commercial exigency hence no disallowance on proportionate interest is called for. 2.3 The appellant relied on the decision of Hon’ble Supreme Court in the case of CIT vs. Reliance Industries Ltd., reported in 307 CTR 121 (SC). 3. The CIT(A) / NFAC erred in confirming the disallowance of Bad Debts written-off amounting to Rs.34,11,331/-. 3.1 The Commissioner of Income Tax (Appeals) ought to have appreciated that the amounts written off represents debts that became irrecoverable from the trade debtors and written off as bad debts in the books of accounts. The asses…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

The appeal stands partly allowed

ITA 207/CHNY/2023[2005-06]Status: DisposedITAT Chennai10 Jan 2024AY 2005-06

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1.आयकरअपील सं./ Ita No.206/Chny/2023 (िनधा*रण वष* / Assessment Year: 2005-06) & 2.आयकरअपील सं./ Ita No.207/Chny/2023 (िनधा*रण वष* / Assessment Year: 2005-06) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)Section 43B

…es to subsidiaries and group companies dur to commercial exigency and hence no disallowance on proportionate interest is called for. 3.3 The appellant relied on the decision of Hon’ble Supreme Court in the case of CIT vs. Reliance Industries Ltd., reported in 307 CTR 121 (SC). 4. The CIT(A) / NFAC erred in confirming the disallowance of Bad Debts written-off amounting to Rs.27,60,40,458/-. 4.1 The Commissioner of Income Tax (Appeals) ought to have appreciated that the appellant engaged in M/s Sical Ships (India) Ltd. for transporting the imported raw materials from other countries and provided a trade advance of…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

The appeal stands partly allowed

ITA 206/CHNY/2023[2005-06]Status: DisposedITAT Chennai10 Jan 2024AY 2005-06

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1.आयकरअपील सं./ Ita No.206/Chny/2023 (िनधा*रण वष* / Assessment Year: 2005-06) & 2.आयकरअपील सं./ Ita No.207/Chny/2023 (िनधा*रण वष* / Assessment Year: 2005-06) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)Section 43B

…es to subsidiaries and group companies dur to commercial exigency and hence no disallowance on proportionate interest is called for. 3.3 The appellant relied on the decision of Hon’ble Supreme Court in the case of CIT vs. Reliance Industries Ltd., reported in 307 CTR 121 (SC). 4. The CIT(A) / NFAC erred in confirming the disallowance of Bad Debts written-off amounting to Rs.27,60,40,458/-. 4.1 The Commissioner of Income Tax (Appeals) ought to have appreciated that the appellant engaged in M/s Sical Ships (India) Ltd. for transporting the imported raw materials from other countries and provided a trade advance of…