CIT v. Reliance Utilities & Power Ltd.

Aegis Logistics Ltd, Mumbai vs. Addl CIT RG 1(1), Mumbai

Appeal is allowed in favour of the assessee,in part

Bench: S/Sh.Rajendra & C. N. Prasadआयकर अपील सं./Ita/2671/Mum/2011,िनधा"रण वष" /Assessment Year:2006-07 Aegis Logistics Limited Acit, Circle-1(1) 403, Peninsula Chambers, Morarjee Mills Mumbai. Compound,G.K. Marg, Lower Parel(W) Vs. Mumbai-400 013. Pan:Aaaca 3302 N (अपीलाथ" /Appellant) (""यथ" / Respondent) राज"व क" ओर से / Revenue By: Shri S.K. Mishra-Dr अपीलाथ" क" ओर से /Assessee By: Shri Percy Pardiwala/Ms. Vasanti Patel सुनवाई क" तारीख / Date Of Hearing: 09/02/2017 घोषणा क" तारीख / Date Of Pronouncement: 15/03/2017 लेखा सद"य सद"य, राजे"" राजे"" केकेकेके अनु सार/ Per Rajendra A.M.- लेखा अनुसार लेखा लेखा सद"य सद"य राजे"" राजे"" अनु अनु सार सार Challenging The Order,Dated 15/12/2010, Of The Cit (A)-1 Mumbai The Assessee Has Filed The Present Appeal.Assessee-Company,Engaged In The Business Of Manufacturing Of Chemicals,Filed Its Return Of Income On 28/11/2006,Disclosing A Total Income Of Rs. 14.75 Crores.A Revised Return Was Filed On 28/03/2008 Reducing The Long-Term Capital Loss From The Returned Income.The Assessing Officer(Ao)Completed The Assessment,U/S.143(3)Of The Act On 29/12/2008, Determin - Ing Its Income At Rs. 14. 85 Crores.

…(Pg.4 of the PB)therefore,there was no justification for upholding the interest disallowance. We find that during the year under consideration the assessee had sufficient own funds for making investment. Therefore,following the judgment of Reliance Utilities,(313 ITR 340),we hold that the FAA had wrongly upheld the disallowance under the head interest expenditure.We find that the assessee, on its own,had made disallowance of 1%. The Hon’ble Bombay High Court in the case of Godrej Agrovet had held that disallowance of 5% in the earlier years i.e. up to the AY. 2007-08 was reasonable.Respectfully following the abov…

DCIT Cen Cir 4(4) Cen RG 4, Mumbai vs. Uma Polymers Ltd, Mumbai

In the result, appeal of the Revenue is dismissed whereas appeal of the assessee is allowed in part

…e of Rs.28,23,07,012/-. In the case of CIT v. HDFC Ltd,(ITA No. 330 of 2012) Order dated 23/07/2014,the Hon'ble Bombay High Court held that in view of the factual position as per the judgement in the case of Cl'F v. Reliance Utilities' and Power Ltd. :(2009) "313 ITR 340 [Bom], it would have to be presumed that the investment made by the assessee would be out of the interest free funds available with, the assessee. In: the relevant years, the assessee churned that no disallowance of interest be made u/s. 14A of the LT. Act, 1961 in view of the fact that the assessee had interest free funds available more than the…

Uma Polymers Ltd, Mumbai vs. DCIT Cir 3(3), Mumbai

In the result, appeal of the Revenue is dismissed whereas appeal of the assessee is allowed in part

…e of Rs.28,23,07,012/-. In the case of CIT v. HDFC Ltd,(ITA No. 330 of 2012) Order dated 23/07/2014,the Hon'ble Bombay High Court held that in view of the factual position as per the judgement in the case of Cl'F v. Reliance Utilities' and Power Ltd. :(2009) "313 ITR 340 [Bom], it would have to be presumed that the investment made by the assessee would be out of the interest free funds available with, the assessee. In: the relevant years, the assessee churned that no disallowance of interest be made u/s. 14A of the LT. Act, 1961 in view of the fact that the assessee had interest free funds available more than the…

Shapoorji Pallanji and Company P.Ltd, Mumbai vs. Addl CIT RG 3(3), Mumbai

The appeal of the assessee is partly allowed

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwalassessment Year: 2011-12 M/S Shapoorji Pallonji & Co. Dcit, Ltd. Circle-3(3), बनाम/ Shapporji Pallonji Centre, Room No.609, 6Th Floor, Vs. 41/44 Minoo Desai Marg, Aayakar Bhavan, M.K.Road, Colaba Mumbai-400020 Mumbai-400005 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aaacs6994C

…appeal of the Revenue, considering the decision of Hon'ble Calcutta High Court in the case of Dhanuka & Sons (339 ITR 319), relied upon by the Revenue. The decision from Hon'ble jurisdictional High Court in the case of Reliance Utilities and Power Ltd. (2009) 313 ITR 340 was also considered and then reached to a conclusion, upholding the stand of the Ld. CIT(A) by rejecting the appeal of the Revenue. Identically, for Assessment Year 2009-10 (ITA No.202 and 207/Mum/2013), the Tribunal, vide order dated 27/03/2015, on the issue of disallowance made under rule-8D(2)(iii) of the Rules, considered the decisions from H…

Satish Kumar Mehra, Mumbai vs. ITO WD 8(3)(2), Mumbai

Appeal is allowed

Bench: Shri B.R. Baskaran & Shri Pawan Singhsatish Kumar Mehra, Income Tax Officer -8(3)(2) 6,Ravi Kiran Estate , Mumbai-400020 Andheri (W) Vs. Mumbai-400053 Pan: Akkpm1432G (Appellant) (Respondent)

…ssee as on 31.03.2009 the assessee owned as sum of Rs. 8,593,837.90/- in his Capital Account , the assessee has invested only as sum of Rs.47,76,278/- in share and securities. Thus, as per the decision of Hon’ble Bombay High Court in CIT Vs Reliance Utilities 313 ITR 340(Bom) , where an assessee has his own funds as well as borrowed funds, a presumption can be made that the advances for non-business purposes have been made out of the own funds and that the borrowed funds have not been used for this purpose. Accordingly, the disallowance of the interest on the borrowed funds is not justified. Hence , this ground o…

Elkay Chemical P.Ltd, Mumbai vs. ITO 6(2)(3), Mumbai

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

Bench: Shri G.S. Pannu & Shri Ram Lal Negi: A.Y : 2012-13 M/S. Elkay Chemical Pvt. Ltd., Vs. Ito-6(2)(3), 4, Vinay Kunj, Shivaji Park, Mumbai (Respondent) Dadar (W), Mumbai 400 028 Pan : Aaace5989K (Appellant)

…s enough own non-interest bearing funds to cover the impugned investments in the partnership firm and, therefore, no interest can be attributable to such investments following the ratio of judgment of Hon'ble Bombay High Court in the case of Reliance Utility, 313 ITR 340 (Bom). 4. On the other hand, the ld. DR appearing for the Revenue has defended the orders of the authorities below and pointed out that post Assessment Year 2008-09, the application of Rule 8D of the Rules to compute the disallowance u/s 14A of the Act cannot be disputed. Accordingly, she has justified the application of Rule 8D of the Rules in…

Apcotex Industries Ltd., Raigad vs. DCIT (OSD) - 10(3), Mumbai

In the result this appeal by the assessee stands allowed for statistical purposes

Bench: Shri Shamim Yahya & Shri Sanjay Garg

…company and hence no disallowances is warranted on account of interest u/s 14A. The appellant company places reliance on the judgment rendered by Jurisdictional Hon’ble Bombay High court in case of HDFC Bank Ltd, 366 ITR 505 and Reliance Utilities& Power Ltd, 313 ITR 340 (Bom), where in it has been held that; Apcotex Industries Ltd. ITA no.3031/Mum./2016 "the presumption needs to be drawn that interest free funds have been utilized for the purpose of investments and therefore there could not have been any disallowance. "where own funds are more than the invested funds, no disallowance of interest is warranted."…

Videocon Industries Ltd, Mumbai vs. DCIT RG 3(3)(2), Mumbai

In the result assessee’s appeal is partly allowed

Bench: Shri R.C. Sharma & Shri Amit Shuklaassessment Year: 2011-12

…s.83,13,23,39,997/- which amount is more than our investments. 13 M/s. Videcon Industries Ltd. Hence, it is submitted that provisions of Sec. 14A of the I. T. Act, 1961, are not applicable in our case as held by B'bay H.C. in Reliance Utilities & Power Ltd., 313 ITR 340 (Bom) & followed in Godrej & Boyce Ltd., ITAT, Mum, No. 1629/MUM/09. We have inadvertently not claimed exemption u/s 10(34) of the Act, in respect of Dividend Income of Rs. 49,14,724/- included in accounts of our Investment Division. You are requested kindly allow the same and oblige.” However, the Assessing Officer rejected the assessee’s conte…

K Girdharilal International Ltd, Mumbai vs. DCIT RG 5(2), Mumbai

In the result, appeal of the assessee is allowed for statistical purpose and appeal of Revenue is partly allowed

Bench: Shri D.Karunakara Rao & Shri Pawan Singh

…to the assessee, the assessee was having sufficient interest free funds available with it, hence, no interest disallowance was warranted. To substantiate his submission, the ld. AR of assessee relied upon the decision of CIT Vs Reliance Utility and Power Ltd. 313 ITR 340 (Bom) and CIT vs. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom). The ld. AR of assessee further submitted that the similar disallowance was made for AY 2008-09. On appeal before the ld. CIT(A), ld. CIT(A) directed the AO to complete the disallowance by only net interest against the interest expenses. Aggrieved by the order of ld. CIT(A), the Revenue fi…

Bank of Baroda, Mumbai vs. ACIT Cir 2(1), Mumbai

In the result of appeal by the assessee is partly allowed for the statistical purposes and the appeal of the revenue stands allowed

Bench: Shri Shamim Yahya & Shri Ravish Sood

…rise since the interest free funds held by the appellant far exceed the amount of investments in assets earning tax free income. The CIT(A) ought to have followed the ratio laid down by Jurisdictional High Court in the case of Reliance Utilities and Power Ltd 313 ITR 340 and held that no disallowance of interest as contemplated in rule 8D was warranted. vi) The CIT (A) ought to have allowed the appellants claim in respect of exclusion of income of foreign branches situated in countries where there is a Double tax Avoidance Agreement based on Article 7 of the respective agreements which provides that the business…