CIT v. Tin Box Company

260 ITR 637High Court2003#1417 most cited

What is CIT v. Tin Box Company authority for?

When an assessee possesses sufficient interest-free funds, it is presumed that any interest-free advances or investments made are from these funds, preventing disallowance of interest under Section 36(1)(iii). This principle applies if own capital and interest-free loans exceed the interest-free advances given.

80

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2010 to 2026.

Also referred to as

CIT v. Tin Box Company · 260 ITR 637 · Section 36(1)(iii) · interest free advances · disallowance of interest · borrowed capital · presumption of own funds · commercial expediency · mixed funds · availability of interest-free capital · Section 14A disallowance · Delhi High Court

Sections most often in play

Section 36(1)(iii)Section 143(3)Section 14ASection 143(1)Section 264Section 56(2)(viib)Section 142(1)Section 36(1)(viia)

Issues it is cited on

nav methodinterest free advancesdcf methodsection 288section 36(1)(iii)accumulated profitssection 56(2)(viib)valuation of sharescommercial expediencysection 264section 33advance tax

Judgments citing CIT v. Tin Box Company

DCIT (Ltu), New Delhi vs. M/S Whirlpool of India Ltd., New Delhi

The appeals of the Revenue are dismissed

ITA 2285/DEL/2009[2001-02]Status: DisposedITAT Delhi20 Feb 2017AY 2001-02

Bench: Shri N. K. Saini & Ms Suchitra Kamble

Section 14ASection 36(1)

…diary company in an earlier year. The CIT(A) observed that the A.O nowhere suggested that the assessee used any interest bearing loan funds to make this payment. Thus, the CIT(A) followed the decision of the Delhi High Court in the case of CIT vs. Tin Box Co. 260 ITR 637, by directing deletion of disallowance of Rs.53,5000/-. 14. The Ld. DR submitted that the loan of Rs.5.35 lacs cannot be said to be advance for business purposes. The assessee company has advanced an interest free loan to its 100% subsidiary. However, it is for its business purpose, the assessee has borrowed funds from banks through commercial p…

M/S. State Bank of India, Mumbai vs. Jt. CIT. Spl. RG. - 27, Mumbai

ITA 3823/MUM/2005[1997-1998]Status: DisposedITAT Mumbai29 Apr 2016AY 1997-1998

Bench: S/Sh.Rajendra & Amit Shuklaआयकर अपील सं./I.T.A. No.3823-24/Mum/2005 िनधा"रण िनधा"रण िनधा"रण वष" िनधा"रण वष" वष" /Ay.S.1997-98, 1998-99 वष" State Bank Of India Addl. Cit- Range-2(2) Accounts & Compliance Deptt. Mumbai. Corporate Centre,Madam Cama Road Vs. Mumbai-400 021. Pan:Aaacs 8577 K (अपीलाथ" /Appellant) (""थ" / Respondent) Revenue By: Shri Rajeshwar Yadav Assessee By:Shri Girish Dave सुनवाई की तारीख / Date Of Hearing :02.03.2016 घोषणा की तारीख / Date Of Pronouncement: 29.04.2016 आयकर अिधिनयम,1961 की धारा 254(1)के अ"ग"त आदेश Order U/S.254(1)Of The Income-Tax Act,1961(Act) खंडपीठ के अनुसार Per Bench: Challenging The Orders Dated 24.3.2005 & 28.3.2005 The Asssessee Has Filed The Appeals For Above Mentioned Two Ay.S Raising Various Grounds Of Appeal. It Has Also Filed Additional Grounds Of Appeal For The Ay 1997-98.Assessee,A Public Sector Bank Is Engaged In The Business Of Banking.The Details Of Filing Of Returns, Returned Income Etc., For Both The Years Can Be Summarised As Under : A.Y. Roi Filed Returned Assessment Assessed Dt. Of Orders On Income(Rs.) Dt. Income(Rs.) Of Cit(A) 1997-98 28.11.1997 2086,56,04,580/- 27.03.2000 2433,18,77,427/- 24.3.2005 1998-99 30.11.1998 2816,41,01,920/- 14.02.2001 3558,87,03,620/- 28.3.2005

For Appellant: Shri Girish DaveFor Respondent: Shri Rajeshwar Yadav
Section 254(1)

…3823-24/M/05-SBI आयकर अपीलीय अिधकरण, मुंबई “ए” खंडपीठ Income-tax Appellate Tribunal -“A”Bench Mumbai सव"ी राजे",लेखा सद" एवं अिमत शु" "ाियक सद" Before S/Sh.Rajendra,Accountant Member and Amit Shukla,Judicial Member आयकर अपील सं./I.T.A. No.3823-24/Mum/2005 िनधा"रण िनधा"रण िनधा"रण वष" िनधा"रण वष" वष" /AY.s.1997-98, 1998-99 वष" State Bank of India Addl. CIT- Range-2(2) Accounts & Compliance Deptt. Mumbai. Corporate Centre,Madam Cama Road Vs. Mumbai-400 021. PAN:AAACS 8577 K (अपीलाथ" /Appellant) (""थ" / Respondent) Revenue by: Shri Rajeshwar Yadav Assessee by:Shri Girish Dave सुनवाई की तारीख / Date of Hearing :…

ACIT, New Delhi vs. Shri Atul Kumar Mittal, New Delhi

In the result, the appeal of the revenue is dismissed

ITA 5619/DEL/2013[2008-09]Status: DisposedITAT Delhi04 Mar 2016AY 2008-09

Bench: Shri J.S. Reddy & Shri A.T. Varkey

For Appellant: Shri Ved Jain, AdvocateFor Respondent: Shri Anil Jain, CIT DR
Section 143Section 2(22)(e)

…was made out of the assessee’s own fund and that the borrowed capital was not siphoned out.” The ld. AR therefore submitted that the aforesaid principle has been reiterated by the Hon’ble jurisdictional High Court in the case of Tin Box Company reported in 260 ITR 637 as well as Hon’ble Madras High Court in the case of 6 ITA No.5619/Del./2013 Hotel Savera reported in 239 ITR 795 and Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. – 318 ITR 333 (Bom.). Ld. AR reiterated that it is not a case where the assessee has borrowed money from Mr. Abhinav Kumar Mittal who in turn has borrowed m…

Shri. Parasmal Dhanraj, Bangalore vs. ITO, Bangalore

In the result, the appeal is allowed for statistical purposes

ITA 357/BANG/2014[2008-09]Status: DisposedITAT Bangalore14 Jan 2016AY 2008-09

Bench: Smt. Asha Vijayaraghavanassessment Year : 2008-09

For Appellant: Shri K. Kiran Kumar, AdvocateFor Respondent: Dr. P.K. Srihari, Addl. CIT(DR)
Section 143(1)Section 143(3)Section 194ASection 40

…ilised for the said loan of Rs.7,90,914. Therefore, the disallowance of interest to the extent of Rs.1,14,687 being proportionate interest on the aforesaid loan of Rs.7,90,914 was unjustified. The assessee relied on the decisions of CIT v. Tin Box Co. (2003) 260 ITR 637 (Del) and CIT v. Bharati Televenture Ltd. (2011) 331 ITR 582 (Del). 9. Without prejudice to the above contentions, the assessee submitted that interest was not charged on the above loans, since its recovery was doubtful and there was no accrual of interest income and relied on the decision of DIT v. Brahamputra Capital Financial Services Ltd. […

DCIT, New Delhi vs. M/S Vic Enterprises Pvt. Ltd., New Delhi

ITA 2863/DEL/2010[2006-07]Status: DisposedITAT Delhi22 Dec 2015AY 2006-07

Bench: Shri I.C. Sudhir & Shri L.P. Sahu Assessment Year: 2006-07 Deputy Cit, Vs. Vic Enterprises Pvt. Ltd., 4Th Floor, Punjabi Bhawan, Circle-17(1), New Delhi. 10-Rouse Avenue, New Delhi. (Pan: Aaacv0132B) (Appellant) (Respondent) Assessment Year: 2008-09 Asstt. Cit, Vs. Vic Enterprises Pvt. Ltd., 4Th Floor, Punjabi Bhawan, Circle-17(1), New Delhi. 10-Rouse Avenue, New Delhi. (Pan: Aaacv0132B) (Appellant) (Respondent)

For Appellant: Shri MP Rastogi, AdvFor Respondent: Shri Sumit Chandra Sharma, CIT- DR
Section 111ASection 143(3)Section 14A

…The Learned AR on the other hand submitted that the assessee was having sufficient fund available and discussing the same, the Learned CIT(Appeals) has rightly deleted the disallowance. He placed reliance on the following decision: i) CIT vs. Tin Box Co. – 260 ITR 637 (Del.); ii) CIT vs. Doctor & Co. – 180 ITR 627 (Bom.); iii) Sanghvi Swiss Refills Pvt. Ltd. vs. ITO – 85 ITD 59 (Mum); 50. Having gone through the orders of the authorities below, we find that the Learned CIT(Appeals) has deleted the disallowance mainly on the basis that as per balance sheet as on 31.3.2008, the assessee was having huge reserve…

Majestic Hotels Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result appeal of the assessee for Ay 2010-11 is allowed

ITA 6260/DEL/2013[2010-11]Status: DisposedITAT Delhi06 Nov 2015AY 2010-11

Bench: Sh. C.M.Garg, Jm & Sh. Prashant Maharishi, Am A Y: 2008-09

For Appellant: Rajeev Mango, C.AFor Respondent: Sh. P. Dam Kanunjna, Sr. DR

…bhishek Industries Ltd. [2006] 286 ITR 1/ 156 Taxman 257 (Punj. & Har.) [Para 2] impliedly overruled by the decision of honourable Supreme court in case of CIT v Munjal Sales Corporations 298 ITR 298. Further honourable Delhi High court in CIT V Tin Box Co in 260 ITR 637 has held that “9. While noticing that the Department had not been able to controvert or disprove the facts that the assessee had substantial capital and interest-free funds available with it, not only in the preceding years but also in the years under consideration, which far exceeded the interest-free advances to the sister concern, the Tribunal…

DCIT, Bangalore vs. M/S Grameen Financial Services Pvt. Ltd., Bangalore

In the result, the appeal by the Revenue is dismissed

ITA 949/BANG/2015[2011-12]Status: DisposedITAT Bangalore06 Nov 2015AY 2011-12

Bench: Smt. Asha Vijayaraghavan & Shri Jason P. Boazassessment Year : 2011-12

For Appellant: Ms. Neera Malhotra, CIT(DR)For Respondent: Shri Shesadri, CA
Section 143(3)Section 14A

…3. Aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the CIT(Appeals). 4. In the submissions before the CIT(Appeals), the assessee relied on the decision of the Hon’ble Delhi High Court in the case of CIT v. Tin Box Co. (260 ITR 637) and CIT v. Hotel Savera (239 ITR 795, 796). 5. The brief facts are that the AO noted that a loan of Rs.2,26,07,88,659 has been taken from various concerns, out of which Rs.68,35,95,390 has been diverted for other than business purpose. The AO stated that Rs.31,55,47,240 has been invested in mutual funds and Rs.36,80,48,150 has been deposited in…

ACIT, Bangalore vs. Telco Construction Equipments Co. Ltd., Bangalore

In the result, appeal of the Revenue is partly allowed

ITA 667/BANG/2014[2008-09]Status: DisposedITAT Bangalore23 Sept 2015AY 2008-09

Bench: Smt. Asha Vijayaraghavan & Shri. Abraham P. George

For Appellant: Shri. S. Anantha, CAFor Respondent: Shri. G. R. Reddy, CIT – DR-I

…ITA.667/Bang/2014 Page - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A', BANGALORE BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A No.667/Bang/2014 (Assessment Year : 2008-09) Asst. Commissioner of Income-tax, Circle -12 (4), Bangalore ..Appellant v. Telco Construction Co. Ltd, 45, Jubilee Building, Museum Road, Bangalore 560 025 ..Respondent PAN : AAACT9077B Assessee by : Shri. S. Anantha, CA Revenue by : Shri. G. R. Reddy, CIT – DR-I Heard on : 03.09.2015 Pronounced on : 23.09.2015 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : In this…

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

ITA - 518 / 2013HC Delhi13 Mar 2015
Section 36

…s 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 the question whether the purpose for which the loan was given, i.e., to book 40,000 sq.…

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

ITA - 516 / 2013HC Delhi13 Mar 2015
Section 36

…s 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 the question whether the purpose for which the loan was given, i.e., to book 40,000 sq.…

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

ITA - 512 / 2013HC Delhi13 Mar 2015
Section 36

…s 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 the question whether the purpose for which the loan was given, i.e., to book 40,000 sq.…

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

ITA/518/2013HC Delhi13 Mar 2015
Section 36

…s 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 the question whether the purpose for which the loan was given, i.e., to book 40,000 sq.…

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

ITA/516/2013HC Delhi13 Mar 2015
Section 36

…s 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 the question whether the purpose for which the loan was given, i.e., to book 40,000 sq.…

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

ITA/519/2013HC Delhi13 Mar 2015
Section 36

…s 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 the question whether the purpose for which the loan was given, i.e., to book 40,000 sq.…

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

ITA/526/2013HC Delhi13 Mar 2015
Section 36

…s 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 the question whether the purpose for which the loan was given, i.e., to book 40,000 sq.…

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

ITA/517/2013HC Delhi13 Mar 2015
Section 36

…s 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 the question whether the purpose for which the loan was given, i.e., to book 40,000 sq.…

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

ITA/512/2013HC Delhi13 Mar 2015
Section 36

…s 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 the question whether the purpose for which the loan was given, i.e., to book 40,000 sq.…

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

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

…t [Rs.] 53.79 crore at the end of the year. Thus, it is evident that the amount invested in such shares or securities is far in excess of share holders' funds.‖ 9. Reference was made to the decision of the Delhi High Court in CIT vs. Tin 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 w…

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

ITTA/526/2013HC Telangana30 Oct 2013

Punjab Stainless Steel Industries vs. Commissioner of Income Tax Delhi VII & Anr

ITA/47/2008HC Delhi14 May 2010

Bench: HON'BLE MR. JUSTICE BADAR DURREZ AHMED,HON'BLE MR. JUSTICE V.K. JAIN

For Appellant: Mr Satyen Sethi, Mr Johnson Bara & Mr A T PandaFor Respondent: Ms Prem Lata Bansal

…t of any credit balance available with the assessee firm at that time. Therefore, this judgment is of no help to the appellant. 14. The learned counsel for the appellant has also referred to Commissioner of Income Tax & Another v. Tin Box Co : (2003) 260 ITR 637 (Del). We find that in the case of Tin Box Company(supra) the capital of the firm and interest free unsecured loans available with the appellant far exceeded the amount advanced to the sister concern in all the years under appeal. The question as to whether the loans to the sister concern were extended for commercial expediency or not…