CIT v. Reliance Utilities & Power Ltd.

313 ITR 340High Court2009#10 most cited

What is CIT v. Reliance Utilities & Power Ltd. authority for?

Where an assessee claims that investments were made out of own funds, interest disallowance under Section 14A read with Rule 8D may not apply if the assessee demonstrates the availability of sufficient interest-free funds to cover such investments.

2,118

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2013 to 2026.

Also referred to as

CIT v. Reliance Utilities and Power Ltd. · Section 14A · Rule 8D · interest free advances · disallowance of interest expenditure · own funds · interest-free funds

Also reported as

178 Taxmann 13513 DTR 237178 Taxmann.com 135284 CTR 414

Sections most often in play

Section 14ASection 36(1)(iii)Section 143(3)Section 115JBSection 8DSection 10(34)Section 143(2)Section 37(1)

Issues it is cited on

interest free advancesdisallowance of interest expendituresection 36(1)(iii)disallowance under section 14acommercial expediencydisallowance u/s 14asection 14abook profitssection 115jsection 36(1)section 36section 115jb

Judgments citing CIT v. Reliance Utilities & Power Ltd.

Lmj Business Centre Pvt. Ltd., Kolkata vs. ITO, Ward - 8(3), Kolkata

In the result, all the appeals of assessee are allowed as indicated above

ITA 1699/KOL/2011[2004-05]Status: DisposedITAT Kolkata14 Sept 2015AY 2004-05

Bench: Shri Mahavir Singh, Jm & Shri Waseem Ahmed, Am]

For Appellant: Smt. Arti Debnath, FCA & Shri Manish Bajoria, FCAFor Respondent: Shri Alok Kr. Nag, JCIT, Sr. DR
Section 143(3)Section 145(3)Section 147Section 263

…IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: KOLKATA [Before Shri Mahavir Singh, JM & Shri Waseem Ahmed, AM] I.T.A Nos.540, & 541/Kol/2012 Assessment Years: 2003-04 & 2006-07 & 1699&1700/Kol/2011 Assessment Years: 2004-05 to 2005-06 M/s. LMJ Business Centre (P) Ltd. Vs. Income-tax Officer, Wd-8(3), Kolkata (PAN:AAACL9393C) & ITA Nos. 87 & 88/Kol/2012 Assessment Years: 2004-05 & 2006-07 LMJ Overseas Ltd. Vs. Income-tax Officer, Wd-8(3), Kolkata (AAACL4426A) (Appellant) (Respondent) Date of hearing: 03.09.2015 Date of pronouncement: 14.09.2015 For the Appellant: Smt. Arti Debnath, FCA & Shri Manish Bajoria, F…

M/S Stanley Lifestyle Pvt. Ltd., Bangalore vs. Pr.CIT, Bangalore

In the result, appeal of the assessee is partly allowed

ITA 608/BANG/2015[2010-11]Status: DisposedITAT Bangalore14 Aug 2015AY 2010-11

Bench: Shri. N. V. Vasudevan & Shri. Abraham P. George

For Appellant: Shri. V. Srinivasan, CAFor Respondent: Shri. Sunil Kumar Agarwala, JCIT
Section 143(3)Section 263

…vestments had gone out of such own funds and not from interest bearing funds. As per the Ld. AR, it was not necessary to show one to one nexus. Reliance was placed on the judgment of Hon’ble Bombay High Court in CIT v. Reliance Utilities and Power Ltd [(2009) 313 ITR 340]. Further, as per the Ld. AR once assessee had shown that it had substantial own funds with it and it had answered related queries, then the presumption that there was error in the order of the AO was incorrect. There was no evidence relied on by the Pr. CIT which could show that order of the AO was prejudicial to the interests of the Revenue. Re…

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).…

DCIT, Chennai vs. Alliance Retreat Private Limited, Chennai

The appeal of the Revenue is dismissed being devoid of merit

ITA 557/CHNY/2013[2009-10]Status: DisposedITAT Chennai10 Apr 2015AY 2009-10

Bench: Shri B.R.Baskaran & Shri Vikas Awasthy

For Appellant: Shri A.V.Sreekanth, JCITFor Respondent: Shri M. Narayanan (Retd. Addl.CIT)
Section 115JSection 36(1)(iii)

…version of interest bearing borrowed funds to group companies. The Commissioner of Income-tax(Appeals) after appreciating the facts of the case, placing reliance on the decisions rendered in the case of CIT v. Reliance Utilities and Power Ltd., reported as 313 ITR 340 (Bom.) accepted the claim of the assessee. - - 5 ITA 557/13 6. It is an undisputed fact that the assessee has taken a term loan of `20,03,78,000/- and has paid interest to the tune of `2,86,80,918/- thereon. The Commissioner of Income- tax(Appeals) in the impugned order has observed that the assessee has established that interest bearing te…

Commissioner of Income Tax (C) - III vs. M/S Dd Industries Ltd

ITA - 518 / 2013HC Delhi13 Mar 2015
Section 36

…nd other funds were not available. The Court here also notices that several decisions were relied upon by 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 12 the ITAT (Reliance Utility and Power Ltd. v. CIT, 313 ITR 340 (Bom.), CIT v. Hotel Savera, 239 ITR 795 (Mad), CIT v. Tin Box Company, 260 ITR 637 (Del.)) in support of the conclusion that when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn. 11. The next aspect is as regards th…

Commissioner of Income Tax (C) -III vs. M/S Dd Industries Ltd

ITA - 516 / 2013HC Delhi13 Mar 2015
Section 36

…nd other funds were not available. The Court here also notices that several decisions were relied upon by 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 12 the ITAT (Reliance Utility and Power Ltd. v. CIT, 313 ITR 340 (Bom.), CIT v. Hotel Savera, 239 ITR 795 (Mad), CIT v. Tin Box Company, 260 ITR 637 (Del.)) in support of the conclusion that when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn. 11. The next aspect is as regards th…

Commissioner of Income Tax (C) - III vs. M/S Dd Industries Ltd

ITA - 512 / 2013HC Delhi13 Mar 2015
Section 36

…nd other funds were not available. The Court here also notices that several decisions were relied upon by 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 12 the ITAT (Reliance Utility and Power Ltd. v. CIT, 313 ITR 340 (Bom.), CIT v. Hotel Savera, 239 ITR 795 (Mad), CIT v. Tin Box Company, 260 ITR 637 (Del.)) in support of the conclusion that when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn. 11. The next aspect is as regards th…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

ITA/518/2013HC Delhi13 Mar 2015
Section 36

…nd other funds were not available. The Court here also notices that several decisions were relied upon by 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 12 the ITAT (Reliance Utility and Power Ltd. v. CIT, 313 ITR 340 (Bom.), CIT v. Hotel Savera, 239 ITR 795 (Mad), CIT v. Tin Box Company, 260 ITR 637 (Del.)) in support of the conclusion that when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn. 11. The next aspect is as regards th…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

ITA/516/2013HC Delhi13 Mar 2015
Section 36

…nd other funds were not available. The Court here also notices that several decisions were relied upon by 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 12 the ITAT (Reliance Utility and Power Ltd. v. CIT, 313 ITR 340 (Bom.), CIT v. Hotel Savera, 239 ITR 795 (Mad), CIT v. Tin Box Company, 260 ITR 637 (Del.)) in support of the conclusion that when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn. 11. The next aspect is as regards th…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

ITA/519/2013HC Delhi13 Mar 2015
Section 36

…nd other funds were not available. The Court here also notices that several decisions were relied upon by 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 12 the ITAT (Reliance Utility and Power Ltd. v. CIT, 313 ITR 340 (Bom.), CIT v. Hotel Savera, 239 ITR 795 (Mad), CIT v. Tin Box Company, 260 ITR 637 (Del.)) in support of the conclusion that when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn. 11. The next aspect is as regards th…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

ITA/526/2013HC Delhi13 Mar 2015
Section 36

…nd other funds were not available. The Court here also notices that several decisions were relied upon by 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 12 the ITAT (Reliance Utility and Power Ltd. v. CIT, 313 ITR 340 (Bom.), CIT v. Hotel Savera, 239 ITR 795 (Mad), CIT v. Tin Box Company, 260 ITR 637 (Del.)) in support of the conclusion that when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn. 11. The next aspect is as regards th…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

ITA/517/2013HC Delhi13 Mar 2015
Section 36

…nd other funds were not available. The Court here also notices that several decisions were relied upon by 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 12 the ITAT (Reliance Utility and Power Ltd. v. CIT, 313 ITR 340 (Bom.), CIT v. Hotel Savera, 239 ITR 795 (Mad), CIT v. Tin Box Company, 260 ITR 637 (Del.)) in support of the conclusion that when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn. 11. The next aspect is as regards th…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

ITA/512/2013HC Delhi13 Mar 2015
Section 36

…nd other funds were not available. The Court here also notices that several decisions were relied upon by 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 12 the ITAT (Reliance Utility and Power Ltd. v. CIT, 313 ITR 340 (Bom.), CIT v. Hotel Savera, 239 ITR 795 (Mad), CIT v. Tin Box Company, 260 ITR 637 (Del.)) in support of the conclusion that when the assessee is possessed of mixed funds which include its own funds in sufficient quantity, a presumption that its own funds were utilized for the advances is to be drawn. 11. The next aspect is as regards th…

Microlabs Limited, Bangalore vs. Addl. Ci.T., Bangalore

In the result, the appeals viz

ITA 764/BANG/2014[2009-10]Status: DisposedITAT Bangalore05 Mar 2015AY 2009-10

Bench: Shri N.V. Vasudevan & Shri Jason P. Boazassessment Year : 2009-10

For Appellant: Shri S. Parthasarthi, AdvocateFor Respondent: Shri C.H. Sundar Rao, CIT-I(DR)
Section 154Section 35

…s clear from the said statement that the availability of profit, share capital and reserves & surplus was much more than investments made by the assessee which could yield tax free income. 41. The Hon’ble Bombay High Court in Reliance Utilities & Power Ltd. 313 ITR 340 (Bom) has held that where the interest free funds far exceed the value of investments, it should be considered that investments have been made out of interest free funds and no disallowance u/s. 14A towards any interest expenditure can be made. This view was again confirmed by the Hon’ble Bombay High Court in CIT v. HDFC Bank Ltd., ITA No.330 o…

Micro Labs Ltd., Bangalore vs. ACIT, Bangalore

In the result, the appeals viz

ITA 1429/BANG/2013[2009-10]Status: DisposedITAT Bangalore05 Mar 2015AY 2009-10

Bench: Shri N.V. Vasudevan & Shri Jason P. Boazassessment Year : 2009-10

For Appellant: Shri S. Parthasarthi, AdvocateFor Respondent: Shri C.H. Sundar Rao, CIT-I(DR)
Section 154Section 35

…s clear from the said statement that the availability of profit, share capital and reserves & surplus was much more than investments made by the assessee which could yield tax free income. 41. The Hon’ble Bombay High Court in Reliance Utilities & Power Ltd. 313 ITR 340 (Bom) has held that where the interest free funds far exceed the value of investments, it should be considered that investments have been made out of interest free funds and no disallowance u/s. 14A towards any interest expenditure can be made. This view was again confirmed by the Hon’ble Bombay High Court in CIT v. HDFC Bank Ltd., ITA No.330 o…

DCIT, Bangalore vs. M/S Micro Labs Ltd., Bangalore

In the result, the appeals viz

ITA 1412/BANG/2013[2009-10]Status: DisposedITAT Bangalore05 Mar 2015AY 2009-10

Bench: Shri N.V. Vasudevan & Shri Jason P. Boazassessment Year : 2009-10

For Appellant: Shri S. Parthasarthi, AdvocateFor Respondent: Shri C.H. Sundar Rao, CIT-I(DR)
Section 154Section 35

…s clear from the said statement that the availability of profit, share capital and reserves & surplus was much more than investments made by the assessee which could yield tax free income. 41. The Hon’ble Bombay High Court in Reliance Utilities & Power Ltd. 313 ITR 340 (Bom) has held that where the interest free funds far exceed the value of investments, it should be considered that investments have been made out of interest free funds and no disallowance u/s. 14A towards any interest expenditure can be made. This view was again confirmed by the Hon’ble Bombay High Court in CIT v. HDFC Bank Ltd., ITA No.330 o…

Commissioner of Income Tax-VI vs. Taikisha Engineering India Ltd

ITA/115/2014HC Delhi25 Nov 2014
Section 14ASection 260A

…Box Co. [2003] 260 ITR 637 (Del) to hold that when the assessee had sufficient funds and non interest funds were advanced to a sister concern, no disallowance was justified. Further, the Bombay High Court in CIT vs. Reliance Utilities and Power Ltd. [2009] 313 ITR 340 (Bom.) had 2014:DHC:6420-DB ITA 115/2014 & 119/2014 Page 7 of 20 similarly held that when sufficient non interest funds were available for investment then no disallowance of interest should be made. The Bombay High Court had placed reliance on the decision of East India Pharmaceutical Works Ltd. vs. CIT [1997] 224 ITR 624 (SC)…

The Commissioner of Income Tax - Central vs. M/s. Himagiri Biotech Pvt. Ltd

ITTA/526/2013HC Telangana30 Oct 2013