CIT v. Reliance Utilities & Power Ltd.

S. Mansukhlal & Co., Mumbai vs. DCIT - 14(2), Mumbai

In the result, appeal filed by assessee is allowed

…he assessee has sufficient interest free fund available in its Account. Thus, no interest disallowance was attracted against the assessee as per the decisions of Hon’ble Bombay High Court in HDFC Bank Ltd. (365 ITR 505) and in Reliance Utilities & Power Ltd ( 313 ITR 340). Considering the facts that the AO has to pass the order for giving effect within statutory period and the same has been passed on 17.02.2011. The order was passed by AO during the pendency of application of the assessee u/s154 before Ld CIT(A). Hence, we direct the AO to pass the order afresh after considering the decisions of Hon’ble Bombay Hi…

Bayer Cropscience Ltd, Thane vs. Asst CIT 15(1)(2), Mumbai

In the result the appeal filed by the assessee is hereby Partly

Bench: Shri D. Karunakara Rao, Am & Shri Amarjit Singh, Jm आयकरअपीलसं/I.T.A. No.2248/Mum/2015 (िनधा"रणवष" / Assessment Year: 2002-03) Bayer Cropscience Limited बनाम/ Asst. Commissioner Of Bayer House, Income Tax 15(1)(2) Vs. Central Avenue, Aaykar Bhavan, M.K.Road, Hiranandani Estate, Mumbai - 400020 Thane(W) - 400607 "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacb9651K (अपीलाथ"/Appellant) .. (""थ" /Respondent)

…tances the investment to earn the exempt income was required to be treated from its own fund, hence no expenditure of any kind is required to be deducted in view of the law settled in Hon’ble Bombay High Court in the case of Reliance Utilities and Power Ltd. (313 ITR 340). On the other hand, the learned departmental representative has refuted the said contentions. In view of the argument advanced by the learned representative of the parties and perusing the record carefully, it came into the notice that the assessee received dividend income to the tune of Rs.33,62,664/- from domestic companies and dividend of Rs.…

Aarti Drugs Ltd, Mumbai vs. Addl CIT RG 6(1), Mumbai

Bench: S/Shri Rajendra, A.M. & Sanjay Garg,J.M. आयकर अपील अपील संसंसंसं./Ita No. 6783-84/Mum/2014,िनधा" रण वष" वष" /Assessment Year: 2010-11 & 2011-12 आयकर िनधा"रण आयकर आयकर अपील अपील िनधा" िनधा" रण रण वष" वष" Aarti Drugs Limited Addl. Cit, Range-6(1) Plot No.109, ‘D’ 3Rd Floor, Mahendra Aayakar Bhavan, Mumbai. Vs. Indl Estate.Sion(E), Mumbai-400 022. Pan: Aaaca 4410 D (अपीलाथ" /Appellant) (""यथ" / Respondent) Revenue By: Shri Rajesh Kumar Yadav Assessee By: Shri Anuj Kisnadwala सुनवाई क" तारीख / Date Of Hearing: 18.01.2017 घोषणा क" तारीख / Date Of Pronouncement: 10 .02.2017 आयकर अिधिनयम अिधिनयम,1961 क" क" धारा धारा 254(1)केकेकेके अ"तग"त अ"तग"त आदेश आदेश आयकर आयकर आयकर अिधिनयम अिधिनयम क" क" धारा धारा अ"तग"त अ"तग"त आदेश आदेश Order U/S.254(1)Of The Income-Tax Act,1961(Act)

…आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण “ए” "यायपीठ "यायपीठ मुंबई मुंबई म"। म"। आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण "यायपीठ "यायपीठ मुंबई मुंबई म"। म"। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI सव"ी राजे"", लेखा सद"य एवं संजय गग" ,"याियक सद"य Before S/Shri Rajendra, A.M. and Sanjay Garg,J.M. आयकर अपील अपील संसंसंसं./ITA No. 6783-84/Mum/2014,िनधा" रण वष" वष" /Assessment Year: 2010-11 & 2011-12 आयकर िनधा"रण आयकर आयकर अपील अपील िनधा" िनधा" रण रण वष" वष" Aarti Drugs Limited Addl. CIT, Range-6(1) Plot No.109, ‘D’ 3rd Floor, Mahendra Aayakar Bhavan, Mumbai. Vs. Indl Estate.Sion(E), Mumbai-400 022. PAN: AAA…

Jsw Steel (Salav ) Ltd, Mumbai vs. DCIT Cen Cir 22, Mumbai

Appeal of the AO is allowed

Bench: S/Sh.Rajendra & Amarjit Singhआयकर अपील सं./I.T.A./69/Mum/2015,िनधा"रण िनधा"रण वष" वष" /Assessment Year: 2010-11 िनधा"रण िनधा"रण वष" वष" आयकर अपील सं./I.T.A./70/Mum/2015,िनधा"रण िनधा"रण िनधा"रण वष" िनधा"रण वष" वष" /Assessment Year: 2011-12 वष" M/S. Jsw Steel (Salav) Limited Dcit, Central Circle-22 (Formerly Known As M/S. Welspun Maxsteel Ltd.) R.No.465, 4Th Floor, Aayakar Bhavan Welspun House, 7Th Floor Mumbai-400 020. Vs. Kamala City, Senapati Bapat Marg Lower Parel, Mumbai-400 013. Pan:Aaccv 7689 R (अपीलाथ" /Appellant) (""यथ" / Respondent) आयकर अपील सं./I.T.A./394/Mum/2015,िनधा"रण िनधा"रण िनधा"रण वष" िनधा"रण वष" वष" /Assessment Year: 2011-12 वष" Dcit, Central Circle-22 Vs. M/S. Jsw Steel (Salav) Limited Mumbai-400 020. Mumbai-400 013. (अपीलाथ" /Appellant) (""यथ" / Respondent) राज"व क" ओर से / Revenue By: Ms. Vidisha Kalra-Cit-Dr अपीलाथ" क" ओर से /Assessee By: Shri Mitesh Shah -Ar सुनवाई क" तारीख / Date Of Hearing: 14.12.2016 घोषणा क" तारीख / Date Of Pronouncement: 08/02/2017 आयकर अिधिनयम आयकर अिधिनयम,1961 क" क" धारा धारा 254(1)केकेकेके अ"तग"त अ"तग"त आदेश आदेश आयकर आयकर अिधिनयम अिधिनयम क" क" धारा धारा अ"तग"त अ"तग"त आदेश आदेश Order U/S.254(1)Of The Income-Tax Act,1961(Act) लेखा सद"य लेखा सद"य, राजे"" राजे"" केकेकेके अनुसार अनुसार/ Per Rajendra A.M.- लेखा लेखा सद"य सद"य राजे"" राजे"" अनुसार अनुसार Challenging The Order,Dated 07/10/2014,Of The Cit(A)-39,Mumbai The Assessing Officer (Ao)And The Assessee Have Filed Cross Appeals For The Ay.2011-12.The Assessee Has Also Filed Appeal For The Ay.2010-11.As Most Of The Issues In These Appeals Are Common,So,We Are Adjudicating Them By Passing A Single Order.

…rovisions of Rule 8D of the Rules,he made a disallowance of Rs. 21.80 lakhs. 2.2.Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority(FAA).Before him,it relied upon the case of Reliance Utility and Power Ltd.(313 ITR 340)and made submissions. After considering the available material,the FAA held that the assessee had received tax-free dividend income of Rs.7.97lakhs,that it had claimed that no expenditure was incurred for earning the exempt income,that it had made investment of Rs. 2.99 crores in shares and had submitted that investment was made for strategic pur…

DCIT Cir 6(1), Mumbai vs. Aegis Ltd, Mumbai

In the result, whereas appeal of the assessee is partly allowed, that of the Revenue is dismissed

Bench: Shri G.S.Pannu & Shri Sandeep Gosainaegis Limited, Essar Techno Park, Old Swan Mill Compound, Lbs Marg, Kurla (W), Mumbai 400 070 Pan:Aaace 8354Q ...... Appellant

…or the assessee has made various submissions on this aspect. Firstly, it is pointed out that assessee had sufficient own funds and, therefore, following the ratio of the judgment of the Hon'ble Bombay High Court in the case of Reliance Utilities & Power Ltd., 313 ITR 340(Bom), it has to be presumed that the loans and advances to the subsidiaries/sister concerns have made out of non-interest bearing funds. It has also been pointed out before us that the advances made to the subsidiaries/sister concerns are for their business consideration, which amounts to commercial under section 36(1)(iii) of the Act. It is poin…

Aegis Ltd, Mumbai vs. DCIT RG 5(1), Mumbai

In the result, whereas appeal of the assessee is partly allowed, that of the Revenue is dismissed

Bench: Shri G.S.Pannu & Shri Sandeep Gosainaegis Limited, Essar Techno Park, Old Swan Mill Compound, Lbs Marg, Kurla (W), Mumbai 400 070 Pan:Aaace 8354Q ...... Appellant

…or the assessee has made various submissions on this aspect. Firstly, it is pointed out that assessee had sufficient own funds and, therefore, following the ratio of the judgment of the Hon'ble Bombay High Court in the case of Reliance Utilities & Power Ltd., 313 ITR 340(Bom), it has to be presumed that the loans and advances to the subsidiaries/sister concerns have made out of non-interest bearing funds. It has also been pointed out before us that the advances made to the subsidiaries/sister concerns are for their business consideration, which amounts to commercial under section 36(1)(iii) of the Act. It is poin…

Addl CIT 10(1), Mumbai vs. L & T Infrastruture Finance Co. Ltd, Mumbai

Bench: Shri R.C. Sharma, Am & Shri Ravish Sood, Jm आयकर अपील सं./I.T.A. No.1357/Mum/2013 (निर्धारण वर्ा / Assessment Year: 2009-10) Dcit-10(1), Mumbai L & T Infrastructure Finance Co. Ltd. बिधम/ 455, 4Th Floor, Aayakar Bhavan, 3 –B, Laxmi Towers, 2Nd Floor, Vs. 4Th Floor, M.K Marg, Bandra Kurla Complex, Bandra (E) Mumbai - 400020 Mumbai 400051 स्थायीलेखासं./जीआइआरसं./Pan/Gir No. Aabcl2283L (अपीलाथी /Appellant) (प्रत्यथी / Respondent) :

…P a g e | 1 IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI R.C. SHARMA, AM AND SHRI RAVISH SOOD, JM आयकर अपील सं./I.T.A. No.1357/Mum/2013 (निर्धारण वर्ा / Assessment Year: 2009-10) DCIT-10(1), Mumbai L & T Infrastructure Finance Co. Ltd. बिधम/ 455, 4th Floor, Aayakar Bhavan, 3 –B, Laxmi Towers, 2nd floor, Vs. 4th floor, M.K Marg, Bandra Kurla Complex, Bandra (E) Mumbai - 400020 Mumbai 400051 स्थायीलेखासं./जीआइआरसं./PAN/GIR No. AABCL2283L (अपीलाथी /Appellant) (प्रत्यथी / Respondent) : अपीलाथी की ओर से / Appellant by : Shri Tufail A. Khan प्रत्यथी की ओर से/Respondentby : Ms. Heena Doshi…

DCIT CC 6(1), Mumbai vs. Vvf Ltd, Mumbai

In the result the appeal of the revenue is dismissed

Bench: Shri Mahavir Singh, Jm & Shri Rajesh Kumar, Am आमकय अऩीर सं./I.T.A. 3137/Mum/2015 (ननधधायण वषा / Assessment Year: 2008-09)

…before us that the assessee has not made any investments out of the borrowings which were for specific purposes and prayed before us that in view of the decision of the Jurisdictional High Court in the case of CIT V/s RELIANCE UTILITIES AND POWER LTD. [2009] 313 ITR 340 (Bom) and the decision in the case of CIT V/s HDFC BANK LTD. [2014] 366 ITR 505 (Bom), the deletion of disallowance under rule 8D(2)(ii) Rs.1,38,73,150/- was rightly made by the FAA and should be upheld in view of the facts of the case and ratio laid down in the above decisions. In our opinion the ld. CIT(A) has taken a correct view as per law an…

DCIT 3(1), Mumbai vs. Bajaj Auto Holding P..Ltd, Pune

The appeals stand partly allowed

Bench: Shri C.N. Prasad, Jm & Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./I.T.A. No. 556/Mum/2013 & C.O. No. 57/Mum/2014

…hereupon was accrued in terms of RBI norms for income recognition and hence, the very basis of making this disallowance was vitiated. Further, he strongly placed reliance on the judgment of Hon’ble Bombay High Court in CIT Vs. Reliance Utilities & Power Ltd. [313 ITR 340] to contend that as on the last date of the relevant financial year, the company’s owned funds in the shape of equity capital and reserves were adequate enough to cover the exempt income earning investments and hence, no interest disallowance could be sustained in such a situation. 4. We have heard the rival contentions and perused relevant mater…

DCIT RG. 3(1), Mumbai vs. M/S. I.C.I.C.I. Ltd., Mumbai

In the result, assessee’s appeals as well as Revenue’s appeals, all are allowed partly for statistical purposes as indicated above

Bench: Sri Mahavir Singh, Jm & Sri Rajesh Kumar, Am Icici Bank Ltd, (Erstwhile Icici Ltd.), Vs. D.C.I.T, Range 3 (1), Icici Bank Towers, Bandra Kurla Aayakar Bhavan, Mumbai-20 Complex, Bandra (East), Mumbai -51 Pan: Aaact 1398K Appellant .. Respondent D.C.I.T, Range 3 (1), Vs. Icici Bank Ltd, (Erstwhile Icici Aayakar Bhavan, Mumbai-20 Ltd.), Icici Bank Towers, Bandra Kurla Complex, Bandra (East), Mumbai -51. Pan: Aaact 1398K Appellant .. Respondent

…made out of assessee’s own funds. For this, the learned Counsel for the assessee relied upon the decision of the Hon’ble Bombay High Court in the case of CIT Vs. HDFC Bank Ltd. 366 ITR 505 (Bom.) and also in the case of CIT Vs. Reliance Utilities & Power Ltd. 313 ITR 314 (Bom.). It was contended by the learned Counsel for the assessee that the entire interest expenses are to be allowed as expenses and no interest expenses to be allocated as the investment is made out of assessee’s own funds. She referred to the Tribunal’s decision in assessee’s own case in assessment year 1997-98 in ITA Page 9 of 34 ITA No.4657…

Icici Bank Ltd vs. DCIT Range 3(1)

In the result, assessee’s appeals as well as Revenue’s appeals, all are allowed partly for statistical purposes as indicated above

Bench: Sri Mahavir Singh, Jm & Sri Rajesh Kumar, Am Icici Bank Ltd, (Erstwhile Icici Ltd.), Vs. D.C.I.T, Range 3 (1), Icici Bank Towers, Bandra Kurla Aayakar Bhavan, Mumbai-20 Complex, Bandra (East), Mumbai -51 Pan: Aaact 1398K Appellant .. Respondent D.C.I.T, Range 3 (1), Vs. Icici Bank Ltd, (Erstwhile Icici Aayakar Bhavan, Mumbai-20 Ltd.), Icici Bank Towers, Bandra Kurla Complex, Bandra (East), Mumbai -51. Pan: Aaact 1398K Appellant .. Respondent

…made out of assessee’s own funds. For this, the learned Counsel for the assessee relied upon the decision of the Hon’ble Bombay High Court in the case of CIT Vs. HDFC Bank Ltd. 366 ITR 505 (Bom.) and also in the case of CIT Vs. Reliance Utilities & Power Ltd. 313 ITR 314 (Bom.). It was contended by the learned Counsel for the assessee that the entire interest expenses are to be allowed as expenses and no interest expenses to be allocated as the investment is made out of assessee’s own funds. She referred to the Tribunal’s decision in assessee’s own case in assessment year 1997-98 in ITA Page 9 of 34 ITA No.4657…

Mutha Founders P. Ltd, Mumbai vs. Addl CIT RG 4(2), Mumbai

In the result appeal filed by the assessee is hereby ordered to be Allowed and appeal filed by the revenue is hereby ordered to be Dismissed

Bench: Shri G.S.Pannu, Am & Shri Amarjit Singh, Jm आयकरअपीलसं/I.T.A. No.2385/Mum/2012 (िनधा"रणवष" / Assessment Year: 2008-09) Mutha Founders Pvt. Ltd. The Addl. Commissioner Of बनाम/ C/O. G.P.Mehta & Co., Cas., Income Tax Range 4(2) Vs. 807, Tulsiani Chambers, Aayakar Bhavan, 6Th Floor, 212, Nariman Point, M.K.Road, Mumbai – 400021 Mumbai - 400020

…7,294/-, therefore total non interest bearing funds was available with the appellant company to the tune of Rs.7,38,88,105/-, hence in view of the law settled in the decision of Hon’ble Bombay High Court in the case of CIT Vs. Reliance Utilities & Power Ltd., 313 ITR 340, no disallowance is required u/s.14A of the Act. On the other hand, the learned representative of the department has relied upon the order passed by the CIT(A) in question. It is not in dispute that the dividend income is to the tune of Rs.25,254/- whereas disallowance u/s.14A of the Act has been made to the tune of Rs.10,81,498/-. No disallowanc…

Addl CIT RG 4(2), Mumbai vs. Mutha Founders P.Ltd, Mumbai

In the result appeal filed by the assessee is hereby ordered to be Allowed and appeal filed by the revenue is hereby ordered to be Dismissed

Bench: Shri G.S.Pannu, Am & Shri Amarjit Singh, Jm आयकरअपीलसं/I.T.A. No.2385/Mum/2012 (िनधा"रणवष" / Assessment Year: 2008-09) Mutha Founders Pvt. Ltd. The Addl. Commissioner Of बनाम/ C/O. G.P.Mehta & Co., Cas., Income Tax Range 4(2) Vs. 807, Tulsiani Chambers, Aayakar Bhavan, 6Th Floor, 212, Nariman Point, M.K.Road, Mumbai – 400021 Mumbai - 400020

…7,294/-, therefore total non interest bearing funds was available with the appellant company to the tune of Rs.7,38,88,105/-, hence in view of the law settled in the decision of Hon’ble Bombay High Court in the case of CIT Vs. Reliance Utilities & Power Ltd., 313 ITR 340, no disallowance is required u/s.14A of the Act. On the other hand, the learned representative of the department has relied upon the order passed by the CIT(A) in question. It is not in dispute that the dividend income is to the tune of Rs.25,254/- whereas disallowance u/s.14A of the Act has been made to the tune of Rs.10,81,498/-. No disallowanc…

Uni Deritend Ltd., Mumbai vs. DCIT 1(3)(2), Mumbai

In the result, appeal of the assessee is allowed for statistical purposes

Bench: Shri D. Karunakara Rao & Shri Amarjit Singhm/S. Uni Deritend Limited, फनाभ/ Dcit-1(3)(2), 3Rd Floor, Liberty Building, Aayakar Bhavan, Vs. Sir Vithaldas Thackersey Marg, M.K. Road, Mumbai – 020. New Marine Line, Mumbai-020. स्थामी रेखा सं./ Pan : Aaacu0028K (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) अऩीराथी की ओय से / Appellant By : Shri Sanjay R. Parikh प्रत्मथी की ओय से/ Respondent By : Shri M.C. Omi Ningshen, Dr

…icient interest free funds and also failed to comply with the judgment of the Hon‟ble jurisdictional High Court in the case of CIT vs. HDFC Bank Ltd (2014) 366 ITR 505 (Bom.) and also the judgment in the case of CIT vs. Reliance Utilities and Power Ltd (2009) 313 ITR 340 (Bom.) despite the same were referred by the assessee before the first appellate authority. 5. After hearing both the parties and on perusal of the orders of the Revenue Authorities as well as the cited precedents (supra), we find that the CIT (A) confirmed the addition despite the said binding judgment without giving any reasons. The contents of…

West Pioneer Properties (India) P.Ltd, Mumbai vs. DCIT Cir 5(3)(1), Mumbai

In the result, the assessee’s appeals for assessment years 2010-11

Bench: Shri Jason P. Boaz & Shri Ram Lal Negi

…10 and in its order in ITA No. 3879/Mum/2014 dated 05.01.2016, the Coordinate Bench held in favour of the assessee and deleted the disallowance, following the decisions of the Hon'ble Bombay 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). 9.2.1 We have heard the rival contentions and perused and carefully considered the material on record; including the judicial pronouncements cited. We find from the material on record that the assessee earned exempt income of `8,06,800/- (i.e. dividends from Mutual Funds) and had made a suo moto disallow…

Smita Conductors Ltd, Mumbai vs. DCIT Cir 3(3), Mumbai

In the result this ground of appeal is allowed in favour of assessee

Bench: S/Sh. Rajendra & Pawan Singhआयकर अपील सं/.Ita No.158/Mum/2013,"नधा"रण वष"/Assessment Year-2008-09

…r book before the Tribunal. The copy of statement of account and the balance sheet is also placed on record showing the interest free funds available with the assessee. The ld. and AR of the assessee relied upon the decision of CIT versus reliance utility Ltd 313 ITR 340(Bombay), CIT versus HDFC bank Ltd 366 ITR 505(Bombay) on the ratio that no interest disallows can be made under section 14A of the assessee own sufficient funds to cover up the value of investment. On the decision of DCIT versus REI Agro Ltd (Calcutta), M/s Global Calcium Private Limited in ITA No.2255/Mds/2013 he propound to the ratio that Asses…

DCIT Cir 6(1), Mumbai vs. India Fashions Ltd, Mumbai

The appeal of the Revenue is dismissed, the Cross Objection of the assessee is partly allowed, as above

Bench: Shri G.S.Pannu & Shri Amarjit Singhdcit, Cir.6(1), Room No.506, 5Th Floor, Aaykar Bhavan, Mk Road, Mumbai 400 020 ...... Appellant Vs. M/S. India Fashions Ltd., A2/369 Shah & Nahar Indl.Estate, Lower Parel(W), Mumbai 400 013 Pan:Aabci 4292A .... Respondent C.No.68/Mum/2016 (Arising Out Of Ita No.6574/Mum/2014, Assessment Year - 2010-11)

…n the earlier two assessment years no disallowance has been made out of interest expenditure. Under these circumstances, it is canvassed that having regard to the judgment of the Hon'ble Bombay High Court in the case of CIT v. Reliance Utilities & Power Ltd., 313 ITR 340(Bom), it is to be presumed that the investments are out of interest free funds and that such proposition is applicable even in the context of section 14A of the Act, as held by the Hon'ble Bombay High Court in the cases of CIT vs. HDFC Bank Ltd., 366 ITR 505(Bom) and HDFC Bank Ltd. vs. DCIT,383 ITR 529 (Bom). 6.1 The aforesaid factual aspects em…