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 367,181 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.

Shapoorji Pallonji and Company Pvt. Ltd, Mumbai vs. DCIT Cir 3(3) (1), Mumbai

ITA 2025/MUM/2021[2014-15]Status: DisposedITAT Mumbai28 Mar 2024AY 2014-15

Bench: Shri B R Baskaran, Am & Ms. Kavitha Rajagopal, Jm & Co No. 55/Mum/2022 (Arising Out Of Ita No.2233/Mum/2021) (Assessment Year: 2014-15) Shapoorji Pallonji & Company Private Dy. Cit, Circle-3(3)(1) Limited Mumbai 1St Floor, 41/44, S P Centre, Minoo Vs. Desai Marg, Colaba, Mumbai-400 005

For Appellant: Shri Rajan Vora & Nikhil TiwariFor Respondent: Shri H M Bhatt
Section 10Section 115JSection 143(1)Section 143(3)Section 14ASection 250

…has held that the assessee’s interest free funds are in excess of the advances given to the said parties. The Tribunal by placing reliance on the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Reliance Utilities & Power Ltd. [2009] 313 ITR 340 (Bom) has deleted the addition on the ground that if the interest free funds of the assessee are in excess of the loans advance then it can be presumed that the funds invested by the said entities are not out of the borrowed funds. The ld. AR for the assessee vide his submission has furnished the statement of the assessee’s interest free funds…

Jt. Commissioner of Income Tax, (OSD) Range-1, Hyderabad vs. Agarwal Industries Private Limited, Hyderabad

In the result, the ground raised by the Revenue is dismissed

ITA 1062/HYD/2018[2013-14]Status: DisposedITAT Hyderabad22 Mar 2024AY 2013-14

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumarआ.अपी.सं /Ita Nos.1061 & 1062/Hyd/2018 (िनधा"रण वष" / Assessment Years: 2012-13 & 2013-14) Jt. Cit (Osd) Vs. Agarwal Industries (P) Range-1 Ltd, Hyderabad Hyderabad Pan:Aacca0094R (Appellant) (Respondent) राज" व "ारा/Revenue By: Smt. K. Haritha, Cit(Dr) & Smt. Sheetal Sarin, Dr िनधा""रती "ारा/Assessee By: Shri Sunil Kumar Jain, Ca सुनवाई की तारीख/Date Of Hearing: 19/03/2024 घोषणा की तारीख/Pronouncement: 22/03/2024

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

…est free and own funds are advanced to the sister concerns and, therefore, the charging of notional interest does not arise. Our opinion is based on the ratio of decision of the Hon'ble Bombay High Court in the case of Reliance Utilities and Power Ltd. [2009] 313 ITR 340 (Bom.) wherein it was held that "if there were funds available both interest-free and overdraft and/or loans taken, then a presumption would arise that investments would be out of interest free funds generated or available with the company, If the interest free funds were sufficient to meet the investments." 27. Since the orders of the revenue do…

Jt. Commissioner of Income Tax, (OSD) Range-1, Hyderabad vs. Agarwal Industries Private Limited, Hyderabad

In the result, the ground raised by the Revenue is dismissed

ITA 1061/HYD/2018[2012-13]Status: DisposedITAT Hyderabad22 Mar 2024AY 2012-13

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumarआ.अपी.सं /Ita Nos.1061 & 1062/Hyd/2018 (िनधा"रण वष" / Assessment Years: 2012-13 & 2013-14) Jt. Cit (Osd) Vs. Agarwal Industries (P) Range-1 Ltd, Hyderabad Hyderabad Pan:Aacca0094R (Appellant) (Respondent) राज" व "ारा/Revenue By: Smt. K. Haritha, Cit(Dr) & Smt. Sheetal Sarin, Dr िनधा""रती "ारा/Assessee By: Shri Sunil Kumar Jain, Ca सुनवाई की तारीख/Date Of Hearing: 19/03/2024 घोषणा की तारीख/Pronouncement: 22/03/2024

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

…est free and own funds are advanced to the sister concerns and, therefore, the charging of notional interest does not arise. Our opinion is based on the ratio of decision of the Hon'ble Bombay High Court in the case of Reliance Utilities and Power Ltd. [2009] 313 ITR 340 (Bom.) wherein it was held that "if there were funds available both interest-free and overdraft and/or loans taken, then a presumption would arise that investments would be out of interest free funds generated or available with the company, If the interest free funds were sufficient to meet the investments." 27. Since the orders of the revenue do…

Associated Capsules P.Ltd, Mumbai vs. ACIT Cen Cir 42, Mumbai

In the result, the appeal filed by the assessee and the Revenue are allowed for

ITA 4620/MUM/2016[2010-11]Status: DisposedITAT Mumbai20 Mar 2024AY 2010-11

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm

For Appellant: Shri Ketan Ved/For Respondent: Shri Pankaj Kumar
Section 143(2)Section 14ASection 250Section 92Section 92BSection 92C(3)

…has yielded exempt income has to be considered while determining the average value of investment. 29. The ld. AR for the assessee has relied on the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs Reliance Utilities & Power Ltd [2009] 313 ITR 340 (Bom) for the proposition that when own funds are more than borrowed funds, no interest disallowance is warranted and the Special Bench decision of ITAT Delhi in the case of ACIT vs. Vireet Investment Pvt. Ltd. (in ITA No. 502/Del/2012 and CO NO.68/Del/2014 vide order dated 16.06.2017), wherein it was held that only those investments which has…

Island Star Mall Developes Private Limited, Mumbai Suburban vs. Dy Commissioner of Income Tax, Circle 6(3)(1), Mumbai

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

ITA 2251/MUM/2023[2017-2018]Status: DisposedITAT Mumbai21 Feb 2024AY 2017-2018

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

…details of the availability of sufficient own funds but the reconciliation and the factual information has to be examined and we rely on the ratio laid down in the case Hon‟ble High Court of Bombay in the case of CIT vs. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) and accordingly we restore this issue to the file of assessing officer for verification and examination of facts and decide on merits. The asssessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. 20. In the result, the appeal filed by the assessee is partly allowed for statistical purp…

Island Star Mall Developes Private Limited, Mumbai Suburban vs. Dy Commissioner of Income Tax, Circle 6(3)(1), Mumbai

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

ITA 2249/MUM/2023[2015-16]Status: DisposedITAT Mumbai21 Feb 2024AY 2015-16

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

…details of the availability of sufficient own funds but the reconciliation and the factual information has to be examined and we rely on the ratio laid down in the case Hon‟ble High Court of Bombay in the case of CIT vs. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) and accordingly we restore this issue to the file of assessing officer for verification and examination of facts and decide on merits. The asssessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. 20. In the result, the appeal filed by the assessee is partly allowed for statistical purp…

Island Star Mall Developes Private Limited, Mumbai vs. Deputy Commissioner of Income Tax, Circle 6(3)(1), Mumbai

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

ITA 2247/MUM/2023[2013-2014]Status: DisposedITAT Mumbai21 Feb 2024AY 2013-2014

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

…details of the availability of sufficient own funds but the reconciliation and the factual information has to be examined and we rely on the ratio laid down in the case Hon‟ble High Court of Bombay in the case of CIT vs. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) and accordingly we restore this issue to the file of assessing officer for verification and examination of facts and decide on merits. The asssessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. 20. In the result, the appeal filed by the assessee is partly allowed for statistical purp…

Island Star Mall Developes Private Limited, Mumbai vs. Deputy Commissioner of Income Tax, Circle 6(3)(1), Mumbai

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

ITA 2246/MUM/2023[2012-2013]Status: DisposedITAT Mumbai21 Feb 2024AY 2012-2013

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

…details of the availability of sufficient own funds but the reconciliation and the factual information has to be examined and we rely on the ratio laid down in the case Hon‟ble High Court of Bombay in the case of CIT vs. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) and accordingly we restore this issue to the file of assessing officer for verification and examination of facts and decide on merits. The asssessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. 20. In the result, the appeal filed by the assessee is partly allowed for statistical purp…

Phenil Sugars Ltd., Delhi vs. ACIT, Circle- 19(2), New Delhi

In the result appeal of the assessee is allowed

ITA 9523/DEL/2019[2006-07]Status: DisposedITAT Delhi21 Feb 2024AY 2006-07

Bench: SHRI SAKTIJIT DEY (Vice President), SHRI M. BALAGANESH (Accountant Member)

For Appellant: Shri KVSR Krishna, CAFor Respondent: Shri Vivek Vardhan, Sr. DR

…as further found that loans were obtained by assessee for specific purposes and which dily represented in the value of the stock The Id CIT further relying on the decision of the Hon'ble Bombay High Court in case of CIT versus Reliance utilities and Power Ltd 313 ITR 340 has deleted the addition holding the assessee has enough own funds which are interest free and which are higher than the amount of advance to the sister concerns. The Ld. departmental representative could not point out any infirmity in the order of the Ld. I appellate authority. In view of this, we confirm the finding the finding of the Id CIT ap…

ACIT, Circle- 19(1), New Delhi vs. Ojas Industries (P) Ltd., New Delhi

In the result, the appeal of the assessee is allowed and the appeal of the Revenue is dismissed

ITA 4143/DEL/2017[2008-09]Status: DisposedITAT Delhi07 Feb 2024AY 2008-09

Bench: Dr. B. R. R. Kumarshri Yogesh Kumar Us

For Appellant: Sh. K.V.S.R. Krishna, CAFor Respondent: Sh. Subhra Jyoti Chakraborty, CIT-DR
Section 14ASection 37

…re holders funds available at Rs.7.12 crores were much in excess of the investment as on 01.04.2007 of Rs.53,18,840/- and placing reliance on the judgment in the case of the Hon'ble High Court of Bombay in the case of CIT vs. Reliance Utilities and Power Ltd. 313 ITR 340 held that, disallowance of Rs. 1,59,939/- under Rule 8D(2)ii) is not sustainable and is directed to be deleted. However, since expenditure for earning dividend cannot be ruled out disallowance of Rs.17,694/- as per rule 8D(2)(ii) is sustained. Since the order of the ld. CIT(A) is rational and as per the provisions of the Act, we decline to interf…

M/S. Ojas Industries (P) Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee is allowed and the appeal of the Revenue is dismissed

ITA 3714/DEL/2017[2008-09]Status: DisposedITAT Delhi07 Feb 2024AY 2008-09

Bench: Dr. B. R. R. Kumarshri Yogesh Kumar Us

For Appellant: Sh. K.V.S.R. Krishna, CAFor Respondent: Sh. Subhra Jyoti Chakraborty, CIT-DR
Section 14ASection 37

…re holders funds available at Rs.7.12 crores were much in excess of the investment as on 01.04.2007 of Rs.53,18,840/- and placing reliance on the judgment in the case of the Hon'ble High Court of Bombay in the case of CIT vs. Reliance Utilities and Power Ltd. 313 ITR 340 held that, disallowance of Rs. 1,59,939/- under Rule 8D(2)ii) is not sustainable and is directed to be deleted. However, since expenditure for earning dividend cannot be ruled out disallowance of Rs.17,694/- as per rule 8D(2)(ii) is sustained. Since the order of the ld. CIT(A) is rational and as per the provisions of the Act, we decline to interf…

Asstt. Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

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

ITA 2357/MUM/2023[2017-18]Status: DisposedITAT Mumbai06 Feb 2024AY 2017-18

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

…details of the availability of sufficient own funds but the reconciliation and the factual information has to be examined and we rely on the ratio laid down in the case Hon‟ble High Court of Bombay in the case of CIT vs. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) and accordingly we restore this issue to the file of assessing officer for verification and examination of facts and decide on merits. The asssessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. 20. In the result, the appeal filed by the assessee is partly allowed for statistical purp…

Asstt. Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

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

ITA 2355/MUM/2023[2015-16]Status: DisposedITAT Mumbai06 Feb 2024AY 2015-16

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

…details of the availability of sufficient own funds but the reconciliation and the factual information has to be examined and we rely on the ratio laid down in the case Hon‟ble High Court of Bombay in the case of CIT vs. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) and accordingly we restore this issue to the file of assessing officer for verification and examination of facts and decide on merits. The asssessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. 20. In the result, the appeal filed by the assessee is partly allowed for statistical purp…

Asstt. Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

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

ITA 2353/MUM/2023[2013-2014]Status: DisposedITAT Mumbai06 Feb 2024AY 2013-2014

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

…details of the availability of sufficient own funds but the reconciliation and the factual information has to be examined and we rely on the ratio laid down in the case Hon‟ble High Court of Bombay in the case of CIT vs. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom) and accordingly we restore this issue to the file of assessing officer for verification and examination of facts and decide on merits. The asssessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. 20. In the result, the appeal filed by the assessee is partly allowed for statistical purp…

Tata International Ltd, Mumbai vs. Addl CIT 7(3), Mumbai

Appeal of the assessee is partly allowed for statistical purposes

ITA 537/MUM/2013[2008-09]Status: DisposedITAT Mumbai06 Feb 2024AY 2008-09

Bench: Shri Amit Shukla & Shri Gagan Goyaltata International Ltd., Block A, Shivsagar Estates Dr. Annie Besant Road, Worli, Mumbai- 400018, Pan: Aaact3198F ...... Appellant Vs. Acit – 7(3), R. No. 675, 6Th Floor, Aayakar Bhavan, M. K. Marg Mumbai- 400020 ..... Respondent

For Appellant: Shri Nitesh Joshi a/w Ninad PatadeFor Respondent: Shri Anoop Hiwase, Ld. DR
Section 144CSection 36(1)Section 36(1)(iii)

…isallowance u/s. 14A of the Act in respect of interest expenditure ought to be deleted. (i) South Indian Bank Ltd vs. Commissioner of Income Tax 438 ITR 1 (SC) (09- 09-2021) (Para 27 Page 51) (Page 45 to 51) (ii) CIT vs. Reliance Utilities & Power Ltd [2009] 313 ITR 340 (Bom) (Page 52 to 55) (iii) HDFC Bank Ltd vs. DCIT 383 ITR 529 (Bom. HC) (Page 56 to 68) 8. Alternatively and without prejudice to the above, it is submitted that interest expense of Rs. 1144.02 Lakhs includes interest aggregating to Rs. 1041.99 Lakhs which is in relation to (EPC) Export Packing Credit and Pre Shipment Credit in Foreign Currency…

Lakozy Motors Pvt Ltd, Mumbai vs. National Faceless Appeal Centre, Mumbai

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

ITA 2726/MUM/2023[2013-14]Status: DisposedITAT Mumbai05 Feb 2024AY 2013-14

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Satyaprakash SinghFor Respondent: Shri Manoj Kumar Sinha
Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250

…pital and reserves and surplus of INR 4,35,09,958, which is more than interest-free loan of INR 1,41,49,131, advanced by the assessee to the related parties. We find that the Hon'ble Jurisdictional High Court in CIT v/s Reliance Utilities & Power Ltd., [2009] 313 ITR 340 (Bom.), held that if funds are available with the assessee, which are sufficient to meet the investment, then the presumption would arise that the investment is made out of funds so available with the assessee. Accordingly, we find no basis in the proportionate disallowance of interest Lakozy Motors Pvt. Ltd. ITA no.2726/Mum./2023 expenditure ma…

Yes Bank Ltd., Mumbai vs. DCIT(2)(2)(2), Mumbai

ITA 4278/MUM/2019[2015-16]Status: DisposedITAT Mumbai05 Feb 2024AY 2015-16

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

Section 14ASection 251Section 35DSection 8D(2)

…the Assessing Officer to verify the claim of the assessee of availability of sufficient 'interest-free funds' to cover the investment made, following the decision of the Hon'ble jurisdictional High Court in the case of CIT Vs Reliance Utilities and Power Ltd 313 ITR 340 and CIT vs HDFC bank Ltd 366 ITR 505 (bom). 6.10 Regarding disallowance in terms of Rule 8D(2)(iii) of Rules, the Ld. CIT(A) followed the finding of third member of the Tribunal bench in the case of DH securities Private Limited reported in 41 taxmann.com 352 and upheld the disallowance of ₹ 22,57,50, 010/-being 0.5% of the average value of the i…

ACIT - 2(2)(2), Mumbai vs. Yes Bank Limited, Mumbai

ITA 3017/MUM/2019[2015-16]Status: DisposedITAT Mumbai05 Feb 2024AY 2015-16

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Acit-2(2)(2), Room No. 545, 5Th Floor, Aayakar Bhavan, Mumbai-400020. Appellant Yes Bank Ltd., 15Th Floor, Yes Bank Tower, Ifc 2, Senapati Bapat Marg, Elphistone (West), Mumbai-400013. Pan No. Aaacy 2068 D Appellant Assessee By Revenue By Date Of Hearing Date Of Pronouncement

Section 14ASection 251Section 35DSection 8D(2)

…the Assessing Officer to verify the claim of the assessee of availability of sufficient 'interest-free funds' to cover the investment made, following the decision of the Hon'ble jurisdictional High Court in the case of CIT Vs Reliance Utilities and Power Ltd 313 ITR 340 and CIT vs HDFC bank Ltd 366 ITR 505 (bom). 6.10 Regarding disallowance in terms of Rule 8D(2)(iii) of Rules, the Ld. CIT(A) followed the finding of third member of the Tribunal bench in the case of DH securities Private Limited reported in 41 taxmann.com 352 and upheld the disallowance of ₹ 22,57,50, 010/-being 0.5% of the average value of the i…

DCIT-1(1)(2), Mumbai vs. M/S Hindustan Petroleum Corporation Ltd., Mumbai

ITA 3913/MUM/2019[2014-15]Status: DisposedITAT Mumbai16 Jan 2024AY 2014-15
For Respondent: Date
Section 143(3)Section 14ASection 14A(2)Section 154Section 250

…made from interest free funds as per the judgment of the Hon'ble Bombay High Court Judgment in the case of Commissioner of Income Tax-2, Mumbai Vs. HDFC Bank Limited: [2016] 366 ITR 505 & Commissioner of Income Tax Vs. Reliance Utilities & Power Ltd.: [2009] 313 ITR 340. Further, only investment yielding exempt dividend income are to be considered for the purpose of computing the amount of disallowance as per Rule 8D(2)(ii) of the Act. C. It was also submitted that there was no nexus between the exempt income earned and interest cost incurred. No indirect expenses were incurred. Without prejudice to the aforesai…

Hindustan Petroleum Corp Ltd, Mumbai vs. DCIT 1(1)(2), Mumbai

ITA 3195/MUM/2019[2014-15]Status: DisposedITAT Mumbai16 Jan 2024AY 2014-15

Bench: us. 2.

For Appellant: Shri P.J. PardiwalaFor Respondent: Shri Biswanath Das
Section 143(3)Section 14ASection 14A(2)Section 154Section 250

…made from interest free funds as per the judgment of the Hon‟ble Bombay High Court Judgment in the case of Commissioner of Income Tax-2, Mumbai Vs. HDFC Bank Limited: [2016] 366 ITR 505 & Commissioner of Income Tax Vs. Reliance Utilities & Power Ltd.: [2009] 313 ITR 340. Further, only investment yielding exempt dividend income are to be considered for the purpose of computing the amount of disallowance as per Rule 8D(2)(ii) of the Act. c. It was also submitted that there was no nexus between the exempt income earned and interest cost incurred. No indirect expenses were incurred. Without prejudice to the aforesa…