CIT v. Reliance Utilities & Power Ltd.

ACIT 14(2)(2), Mumbai vs. Orix Auto Infrastructure Servcies Ltd, Mumbai

In the result, appeal of the Revenue is dismissed

Bench: Shri Amit Shukla, Jm & Shri Ashwani Taneja, Am Acit-14(2)(2), Mumbai Vs. M/S Orix Auto Infrastructure Services Ltd., Plot No. 904, Marol Co-Op Industrial Estate Andheri-Kurla Road, Andheri– East, Mumbai – 400 059 Pan/Gir No. Aaaco2563P Appellant) .. Respondent)

…by not following the decision of Hon'ble Bombay High Court in the case 2 M/s.Orix Infrastructure Services Ltd., of Godrej & Boyce Mfg. Co Ltd & wrongly relying on the judgment of Hon'ble Bombay High Court in the case of CIT Vs Reliance Utilities reported in 313 ITR 340 which was applicable in the context of disallowance of interest u/s. 36(1)(iii) of the Act." 2. "On the facts and in the circumstances of the case, the Ld. CIT (A) erred in deleting the excess claim of depreciation on software license, & ignoring the fact that the Hon'ble ITAT in the case of Sony India Pvt. Ltd. Vs CIT has held that software lice…

Abc Bearing Ltd, Mumbai vs. Addl CIT RG 6(1), Mumbai

In the result, appeal of the Revenue is dismissed

Bench: Shri G.S.Pannu & Shri Ram Lal Negithe Dcit, Cir.6(1), Room No.506, 5Th Floor, Aaykar Bhavan,M.K.Road, Mumbai 400 020 ...... Appellant Vs. M/S.Abc Bearing Ltd. 402-B, Poonam Chambers, Dr. Annie Besant Road, Worli, Mumbai 400018 Pan: Aaact 5018Q .... Respondent M/S.Abc Bearing Ltd. 402-B, Poonam Chambers, Dr. Annie Besant Road, Worli, Mumbai 400018 Pan: Aaact 5018Q .... Appellant Vs. The Acit, Cir.6(1), Room No.511, 5Th Floor, Aaykar Bhavan,M.K.Road, Mumbai 400 020

…nd Free Reserves available with the assessee are substantially more as compared to the total investments as on 31/3/2009 and, therefore, following the ratio of the judgment of the Hon'ble Bombay High Court in the case of CIT v. Reliance Utilities & Power Ltd.,313 ITR 340(Bom), it has to be presumed that the said investments have been made out of interest free funds. It is also pointed out by the assessee that the interest expenditure of Rs.4,83,83,904/- has been incurred on specific loans raised, details of which have also been reproduced by the Assessing Officer in the assessment order. On this basis, it is also…

DCIT Cir 6(1), Mumbai vs. Abc Bearing Ltd, Mumbai

In the result, appeal of the Revenue is dismissed

Bench: Shri G.S.Pannu & Shri Ram Lal Negithe Dcit, Cir.6(1), Room No.506, 5Th Floor, Aaykar Bhavan,M.K.Road, Mumbai 400 020 ...... Appellant Vs. M/S.Abc Bearing Ltd. 402-B, Poonam Chambers, Dr. Annie Besant Road, Worli, Mumbai 400018 Pan: Aaact 5018Q .... Respondent M/S.Abc Bearing Ltd. 402-B, Poonam Chambers, Dr. Annie Besant Road, Worli, Mumbai 400018 Pan: Aaact 5018Q .... Appellant Vs. The Acit, Cir.6(1), Room No.511, 5Th Floor, Aaykar Bhavan,M.K.Road, Mumbai 400 020

…nd Free Reserves available with the assessee are substantially more as compared to the total investments as on 31/3/2009 and, therefore, following the ratio of the judgment of the Hon'ble Bombay High Court in the case of CIT v. Reliance Utilities & Power Ltd.,313 ITR 340(Bom), it has to be presumed that the said investments have been made out of interest free funds. It is also pointed out by the assessee that the interest expenditure of Rs.4,83,83,904/- has been incurred on specific loans raised, details of which have also been reproduced by the Assessing Officer in the assessment order. On this basis, it is also…

Essel Infraprojects Ltd, Mumbai vs. DCIT Cir 7(1), Mumbai

In the result, both the appeals filed by the revenue are dismissed and the appeal of the assessee for AY 2006-07 is treated as allowed

Bench: Shri B.R. Baskaran (Am)& Ramlal Negi (Jm)

…and submitted that the assessee is having own funds of ` 175.93 cores, while investment made in capital work-in-progress is only ` 1.36 crores. Accordingly, he submitted that the ratio laid down by Hon'ble Bombay High Court in the case of Reliance Utilities (313 ITR 340) would squarely apply to the facts of the present case. He submitted that the loan funds have been used to make investments and the capital work-in-progress was met out of internal accruals and own funds. 10. Having heard the rival submissions on this issue, we find merit in the contentions of the assessee. We noticed that the assessee itself ha…

Bhansali Bright Baras P.Ltd, Mumbai vs. ACIT 5(1), Mumbai

The appeal of the assessee is allowed

Bench: Shri Joginder Singh & Shri Ashwani Tanejaassessment Year: 2009-10 M/S Bhansali Bright Bars Pvt. Acit-5(1), Ltd. Mumbai बनाम/ 150, Madhav Bhavan, Vs. Nanubhai Desai Road, Mumbai-400004 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No.Aabcb1544N "नधा"रती क" ओर से / Assessee By Shri Darshak Shah Shri Suman Kumar-Dr राज"व क" ओर से / Revenue By 11/01/2017 सुनवाई क" तार"ख / Date Of Hearing : 11/01/2017 आदेश क" तार"ख /Date Of Order:

…of interest free unsecured loans, therefore, in our view, calculation on proportionate basis, is not justified. The ratio laid down by Hon'ble jurisdictional 6 M/s Bhansali Bright Baras Pvt. Ltd. High Court in CIT vs Reliance Utilities and Power Ltd. (2009) 313 ITR 340 (Bom.) supports our view, wherein, availability of interest free funds was determined by comparing the share capital and reserves against investment. The analysis of the balance sheet as on 31/03/2009 is as under:- Particulars Amount (In Rs.) Share Capital 2,10,40,000 Reserves & Surplus 11,61,33,149 Depreciation Fund 2,17,79,530 Total Interest F…

The West Coast Paper Mills Ltd, Mumbai vs. Addl CIT 1(3), Mumbai

Appeal stands allowed for Statistical Purposes

…allowance only those investments had to be considered from which exempt income was received during the year under consideration, that the disallowance could not exceed the exempt income received by the assessee. He relied upon the cases of Reliance Utilities (313 ITR 340),JM Financials Ltd. (ITA/4521/NUM/2012), ACB India Ltd. (374 ITR 108)and Joint Investments Private Ltd. (Income Tax Appeal Number 117of 2015). He further stated that disallowance of Rs. 65,000/- made by the assessee towards admissible expenses for the year under consideration was in line with the methodology accepted by the Tribunal in assessee’s…

ACIT 10(1), Mumbai vs. Godrej Agrovet Ltd, Mumbai

Bench: S/Sh.Rajendra & Amarjit Singhआयकर अपील सं./I.T.A./6838/Mum/2014,िनधा"रण िनधा"रण वष" वष" /Assessment Year: 2010-11 िनधा"रण िनधा"रण वष" वष" Acit-10(2), M/S. Godrej Agrovet Ltd. 432, Aayakar Bhavan, 4Th Floor Gate No.2, Pirojsha Nagar, M.K. Marg, Mumbai-20. Vs. Eastern Express Highway Vikhroli (E),Mumbai-400 079. Pan:Aaacg 0617 Q (अपीलाथ" /Appellant) (""यथ" / Respondent) ""या"ेप सं./C.O. No.72/Mum/2016 (Arising Out Of आयकर अपील सं./I.T.A./6838/Mum/2014,िनधा"रण िनधा"रण वष" वष" /Assessment Year: 2010-11) िनधा"रण िनधा"रण वष" वष" M/S. Godrej Agrovet Ltd. Vs. Acit-10(2), Mumbai-79. Mumbai-400 020. (""या"ेपक /Cross Objector) (""यथ" / Respondent) राज"व क" ओर से / Revenue By: Shri T.A. Khan-Dr अपीलाथ" क" ओर से /Assessee By:S/Shri Akram Khan & Raunak Vardhan -Ar सुनवाई क" तारीख / Date Of Hearing: 05.12.2016 घोषणा क" तारीख / Date Of Pronouncement: 06/01/2017 आयकर आयकर अिधिनयम आयकर आयकर अिधिनयम अिधिनयम,1961 क" अिधिनयम क" क" धारा क" धारा धारा 254(1)केकेकेके अ"तग"त धारा अ"तग"त अ"तग"त आदेश अ"तग"त आदेश आदेश आदेश Order U/S.254(1)Of The Income-Tax Act,1961(Act) लेखा लेखा सद"य लेखा लेखा सद"य सद"य, राजे"" सद"य राजे"" राजे"" केकेकेके अनुसार राजे"" अनुसार अनुसार/ Per Rajendra A.M.- अनुसार Challenging The Order Dated 14.08.2014 Of Cit(A)-21 Mumbai The Assessing Officer (A.O.) & The Assessee Have Filed Appeal/Cross Objection(Co)For The Year Under Consideration. Assessee-Company,Engaged In The Business Of Manufacturing Of Animal Feeds & Trading Of Agricultural Products Filed Its Return Of Income On 8.10.2010,Declaring Total Income At Rs.15.60 Crores.The Ao Completed Assessment,U/S.143(3) Of The Act,On 06.03.2013 Determin -Ing Its Income At Rs.18.53 Crores.

…आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, मुंबई अिधकरण मुंबई मुंबई “जी मुंबई जी जी खंडपीठ जी खंडपीठ खंडपीठ खंडपीठ Income-tax Appellate Tribunal -“G”Bench Mumbai सव"ी राजे"",लेखा सद"य एवं अमरजीत "सह, "याियक सद"य Before S/Sh.Rajendra,Accountant Member and Amarjit Singh,Judicial Member आयकर अपील सं./I.T.A./6838/Mum/2014,िनधा"रण िनधा"रण वष" वष" /Assessment Year: 2010-11 िनधा"रण िनधा"रण वष" वष" ACIT-10(2), M/s. Godrej Agrovet Ltd. 432, Aayakar Bhavan, 4th Floor Gate No.2, Pirojsha Nagar, M.K. Marg, Mumbai-20. Vs. Eastern Express Highway Vikhroli (E),Mumbai-400 079. PAN:AAACG 0617 Q (अपी…

Piramal Glass Ltd, Mumbai vs. DCIT 7(3)(2), Mumbai

The appeal of the assessee stands partly allowed

Bench: Shri Amit Shukla, Jm & Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./I.T.A. No. 157/Mum/2016 ("नधा"रण वष" / Assessment Year : 2011-2012) M/S Piramal Glass Ltd. Deputy Commissioner Of (Earlier Known As ‘Gujarat Glass Pvt. Ltd.’) Income Tax 7(3)(2) बनाम/ Room No. 669A, 6Th Floor Piramal Tower Ganpatrao Kadam Marg Aaykar Bahwan Vs. Lower Parel M.K.Road, Churchgate Mumbai 400013 Mumbai 400020 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabcg-0093-R (अपीलाथ" /Appellant) (""यथ" / Respondent) :

…ncements:- i. Assessee’s own case for AY 2001-02 ITA No. 9645 & 9498/M/04 order dated 02/03/2016 ii. Assessee’s own case for AY 2006-07 ITA No. 8360/M/10 order dated 16/12/2016 iii. S.A.Builders Vs. CIT [Supreme Court 288 ITR 1] iv. CIT Vs Reliance Utilities [313 ITR 340 Bombay High Court] v. CIT Vs Reliance Communication Infrastructure [207 Taxmann 219 Bombay High Court] vi. CIT Vs. Phil Corp. Ltd [244 CTR 226 Bombay High Court] vii. CIT Vs Shristi Securities [321 ITR 498 Bombay High Court] Per Contra, Ld. DR supported the stand lower authorities. We have heard various contentions and perused relevant material…

Laqshya Media P.Ltd, Mumbai vs. DCIT 10(2)(1), Mumbai

Appeal stand allowed for statistical purposes

Bench: Shri Amit Shukla, Jm & Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./I.T.A. No. 500/Mum/2015 ("नधा"रण वष" / Assessment Year: 2010-2011) M/S Laqshya Media Private Deputy Commissioner Of Ltd. Income Tax 10(2)(1) Laqshya House Room No. 209 बनाम/ Saraswati Baug Aaykar Bahwan Vs. Society Road, Jgeshwari (E) M.K.Road Mumbai 400060 Churchgate Mumbai 400020 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaacl-5004-C (अपीलाथ" /Appellant) (""यथ" / Respondent) :

…ntentions:- i. S.A.Builders Vs. CIT [Supreme Court 288 ITR 1] ii. Hero Cycles Pvt. Ltd. Vs. CIT [Supreme Court] [Civil Appeal No. 514 of 2008] iii. CIT Vs Reliance Communication Infrastructure [207 Taxmann 219 Bombay High Court] iv. CIT Vs Reliance Utilities [313 ITR 340 Bombay High Court] v. CIT Vs Ashok Commercial Enterprises [Bombay High Court] [ITA-L No. 2985 of 2009)] vi. CIT Vs. HDFC Bank Ltd [Bombay High Court][ITA No, 330 of 2012] Per Contra, Ld. DR justified the disallowances made by lower authorities on the ground that deduction thereof could be allowed only if the funds were used wholly and exclusively…

DCIT Cir 3(1), Mumbai vs. Icici Bank Ltd, Mumbai

In the result, Revenue’s appeal and assessee’s appeal are partly allowed for statistical purposes

Bench: Shri Saktijit Dey & Shri Rajesh Kumar

…e far exceeds the investment made in tax free interest income yielding assets, therefore, no disallowance of interest expenditure can be made in view of the decision of the Hon'ble Jurisdictional High Court in CIT v/s Reliance Utilities and Power Ltd., [2009] 313 ITR 340 (Bom.) and CIT v/s HDFC Bank Ltd., [2014] 366 ITR 505 (Bom.). As far as disallowance of administrative expenses is concerned, it is the contention of the assessee that in the preceding assessment year, it has voluntarily disallowed 1% of the administrative expenditure attributable to earning of exempt income. However, we have noted, in assessment…

ACIT 3(1)(1), Mumbai vs. B. Arunkumar Capital & Credit Services P.Ltd, Mumbai

Appeal of the Revenue is dismissed

Bench: Shri G.S.Pannuthe Acit-3(1)(1), Room No.607, 6Th Floor, Aaykar Bhavan,M.K.Road, Mumbai 400 020. ...... Appellant Vs. M/S. B. Arunkumar Capital & Credit Services Pvt. Ltd., 154/C, Mittal Court, Nariman Point, Mumbai 400 021 Pan: Aaacb 2156M .... Respondent

…assessee to cover the investment and, therefore, it has 4 to be presumed that such investments were out of interest free funds following the ratio of the judgment of the Hon'ble Bombay High Court in the case of CIT. Vs. Reliance Utilities And Power Limited., 313 ITR 340 (Bom). Consequently, following the judgments of the Hon'ble Bombay High Court in the case of CIT vs. HDFC Bank Ltd., 366 ITR 505(Bom) and in the case of HDFC Bank Ltd. vs. DCIT,383 ITR 529 (Bom), the interest disallowed in pursuance to Rule 8D(2)(ii) of the Rules has been deleted. Apart there from, the CIT(A) has observed in para – 5.1.6 of his o…

Nipra Financial Services P.Ltd, Mumbai vs. Asst CIT RG 4(2), Mumbai

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

Bench: Shri B.R. Baskaran & Shri Amit Shukla

…orm of „reserves & surplus‟ and share capital. Against the said funds, the investment made is only Rs. 35,77,702/-. Thus, in view of the principle laid down by the Hon‟ble jurisdictional High Court in the cases of CIT vs. Reliance Utilities & Power Ltd [2009] 313 ITR 340; and CIT vs. HDFC Bank Ltd[2014] 366 ITR 505, no disallowance of interest should be made. As regards to the disallowance of indirect expenditure, Ld Counsel submitted that some of the shares were kept as stock-in- trade, which were not for the purpose of investment or for earning of dividend income and therefore same should not be included for th…

DCIT 10(3), Mumbai vs. Aarti Industries Ltd, Mumbai

In the result, appeal filed by the assessee is partly allowed and the appeal filed by the revenue is also partly allowed

Bench: Shri Mahavir Singh () & Shri Ashwani Taneja () I.T.A. No.2421/Mum/2014 (Assessment Year: 2008-09)

…No.2421 & 2633/Mum/2014 investment made in tax free securities; in view of the following judgements: No interest disallowance can be made u/s 14A of the Act since own funds are sufficient to cover up the value of investments - CIT v. Reliance Utilities Ltd [313 ITR 340 (Bom)] - CIT vs. HDFC Bank Ltd [366 ITR 505 (Bom)] - Alchemic Financial Services v Addl.CIT (ITA No. 6349/Mum/2011) - Paresh K Shah v. Dy.CIT (ITA No. 8214/Mum/2011) 5. With regard to the expenses disallowed @0.5% u/r 8D(2)(iii), it was submitted that no satisfaction was recorded by the AO, therefore, AO wrongly applied the said rule to make the…

The Supreme Industries Ltd, Mumbai vs. DCIT Ltu, Mumbai

In the result, the appeals of the assessee are partly allowed and appeals of the Revenue are dismissed

Bench: Shri Mahavir Singh & Shri Ashwani Tanejaassessment Year: 2006-07

…ls by way of cash profits at the relevant points of time when such investments were made, and that the investments were made out of interest-free funds, the decision of the Hon'ble Bombay High Court in the case of Reliance Utilities and Power Ltd. reported in 313 ITR 340(Bom) would be directly applicable in favour of the assessee. Also, in the case of CIT-II Vs. Hero Cycles Ltd. reported in 323 FIR 518( P & H), it has been held by the Hon'ble High Court as follows: "Merely because the assessee has incurred interest expenditure on funds borrowed would not ipso facto invite the disallowance under section 14,4, unle…

The Supreme Industries Ltd, Mumbai vs. Addl CIT Ltu, Mumbai

In the result, the appeals of the assessee are partly allowed and appeals of the Revenue are dismissed

Bench: Shri Mahavir Singh & Shri Ashwani Tanejaassessment Year: 2006-07

…ls by way of cash profits at the relevant points of time when such investments were made, and that the investments were made out of interest-free funds, the decision of the Hon'ble Bombay High Court in the case of Reliance Utilities and Power Ltd. reported in 313 ITR 340(Bom) would be directly applicable in favour of the assessee. Also, in the case of CIT-II Vs. Hero Cycles Ltd. reported in 323 FIR 518( P & H), it has been held by the Hon'ble High Court as follows: "Merely because the assessee has incurred interest expenditure on funds borrowed would not ipso facto invite the disallowance under section 14,4, unle…

The Supreme Industries Ltd, Mumbai vs. Asst CIT Cen Cir 29, Mumbai

In the result, the appeals of the assessee are partly allowed and appeals of the Revenue are dismissed

Bench: Shri Mahavir Singh & Shri Ashwani Tanejaassessment Year: 2006-07

…ls by way of cash profits at the relevant points of time when such investments were made, and that the investments were made out of interest-free funds, the decision of the Hon'ble Bombay High Court in the case of Reliance Utilities and Power Ltd. reported in 313 ITR 340(Bom) would be directly applicable in favour of the assessee. Also, in the case of CIT-II Vs. Hero Cycles Ltd. reported in 323 FIR 518( P & H), it has been held by the Hon'ble High Court as follows: "Merely because the assessee has incurred interest expenditure on funds borrowed would not ipso facto invite the disallowance under section 14,4, unle…

Edelwess Finance & Investments Ltd ( Formerly Known As Cross Border Investments P. Ltd), Mumbai vs. Addl CIT RG 3(1), Mumbai

In the result, appeal of the Revenue is dismissed

Bench: Shri D. Karunakara Rao & Shri Pawan Singh

…the issue of applicability of clause (ii) of Rule 8D(2) relating to interest disallowance. In this regard, CIT (A) held that the case is covered by the judgment of the Hon’ble jurisdictional High Court in the case of CIT vs Reliance Utilities & Power Limited (313 ITR 340) (Bom). Further, CIT (A) also relied on another judgment of the Bombay High Court in the case of HDFC Bank Limited vs. DCIT (383 ITR 529) (Bom) and mentioned that the assessee is having excess interest free funds in such case, no disallowance is called for under clause (ii) of Rule 8D(2) of the Rules. We agree with the said decision of the CIT (A…

Gujarat Glass P. Ltd(Earlier Known As Gujarat Glass P. Ltd ), Mumbai vs. Addl CIT Cir 6(3), Mumbai

In the result, appeal stands partly allowed

Bench: Shri Rajendra & Shri Saktijit Deyआयकर अऩीऱ सं. / Ita No. 8360/Mum./2010 (ननधधारण वषा / Assessment Year : 2006–07) Gujarat Glass Pvt. Ltd. (Now Known As Piramal Glass Ltd.) …….………. अऩीऱधथी / Piramal Tower, G.K. Marg Appellant Lower Parel, Mumbai 400 013 Pan – Aabcg0093R V/S Addl. Commissioner Of Income Tax ..…….………. प्रत्यथी / Circle–6(3), Mumbai Respondent ननधधाररती की ओर से / Assessee By : Shri Yogesh Thar रधजस्व की ओर से / Revenue By : Shri N.K. Chand सुनवधई की तधरीख / आदेश घोषणध की तधरीख / Date Of Hearing – 03.10.2016 Date Of Order – 16.12.2016 आदेश / Order शक्तिजीि दे, न्याययक सदस्य के द्वारा / Per Saktijit Dey, J.M.

…de in subsidiary. Therefore, it has to be presumed that the investment made in subsidiary were out of own interest free funds and not borrowed funds. For such proposition, he relied upon the following decisions:– i) CIT v/s Reliance Utilities and Power Ltd., 313 ITR 340 (Bom.) ii) CIT v/s Reliance Communication Infrastructure, 29 taxmann.com 118 (Bom.); and iii) Kansai Nerolac v/s DCIT, 32 taxmann.com 60 (Mum.). 15. Without prejudice to the aforesaid contention, it was submitted, even assuming that borrowed funds are used for investment in subsidiary, however, since such investment in shares is for controlling…

Shreepati Holding & Finance P. Ltd, Mumbai vs. Addl CIT RG 4(3), Mumbai

In the result, the appeal of the assessee is allowed

Bench: Shri Mahavir Singh & Shri Ashwani Tanejaassessment Year: 2011-12 Shreepati Holding & Finance Addl. Cit Rg 4(2) P. Ltd. बनाम/ Aayakar Bhavan, 6Th 401, 4Th Floor, Mehta Mahal, Floor, Vs. 15Th Mathew Rd. Mumbai- Opera House, Mumbai-400004 (Appellant) (Respondent ) P.A. No.Aaacs8111R Appellant By Shri Dharmesh Shah (Ar) Revenue By Shri T.A Khan (Dr) सुनवाई क" तार"ख/Date Of Hearing: 28/11/2016 15/12/2016 आदेश क" तार"ख /Date Of Order:

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ,E,मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “E”, MUMBAI Before Shri Mahavir Singh, Judicial Member, and Shri Ashwani Taneja, Accountant Member Assessment Year: 2011-12 Shreepati Holding & Finance ADDl. CIT RG 4(2) P. Ltd. बनाम/ Aayakar Bhavan, 6th 401, 4th Floor, Mehta Mahal, Floor, Vs. 15th Mathew Rd. Mumbai- Opera House, Mumbai-400004 (Appellant) (Respondent ) P.A. No.AAACS8111R Appellant by Shri Dharmesh Shah (AR) Revenue by Shri T.A Khan (DR) सुनवाई क" तार"ख/Date of Hearing: 28/11/2016 15/12/2016 आदेश क" तार"ख /Date of Order: आदेश / O R D E R Per Ashwan…