CIT v. Torrent Power Ltd.

354 ITR 630High Court2013#589 most cited

What is CIT v. Torrent Power Ltd. authority for?

If an assessee possesses sufficient interest-free own funds to cover investments yielding exempt income, it is presumed that such investments are made from these own funds, precluding any disallowance of interest expenditure under Section 14A, even when borrowed funds are also available.

166

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2014 to 2026.

Also referred to as

CIT v. Torrent Power Ltd. · 354 ITR 630 · Section 14A · disallowance under Section 14A · interest expenditure · exempt income · sufficient own funds · interest-free funds · presumption of funds · nexus with borrowed funds · mixed funds · Gujarat High Court

Also reported as

44 Taxmann.com 441

Sections most often in play

Section 14ASection 143(3)Section 250Section 263Section 115JBSection 132(1)Section 139(1)Section 139(5)

Issues it is cited on

written down valuedisallowance under section 14arule of consistencydisallowance u/s 14asection 14asection 36section 37double taxationprevious yearsection 80transfercompany

Judgments citing CIT v. Torrent Power Ltd.

The DCIT(OSD)Range-1, Ahmedabad vs. Dishman Pharmaceuticals & Chemicals Ltd., Ahmedabad

In the result, we allow appeal of the assessee and delete penalty confirmed by the ld

ITA 817/AHD/2011[2006-07]Status: DisposedITAT Ahmedabad23 May 2018AY 2006-07

Bench: Shri Rajpal Yadav & Shri Amarjit Singh

For Respondent: Shri R.P. Maurya, Sr.DR
Section 143(2)Section 143(3)Section 92BSection 92C

….1,203.72 lakhs whereas the assessee has interest free funds available at Rs.17,154.34 lakhs. The assessee has relied upon the judgment of the Hon’ble Gujarat High Court in the case of CIT Vs. Torrent Power Ltd., 363 ITR 474 (Guj), CIT Vs. Suzlon Energy Ltd., 354 ITR 630 (Guj) and judgment of Bombay High Court in the case of CIT Vs. Reliance Utilities & Power ltd., 313 ITR 340. On the other hand, the ld.DR relied upon the order of the Revenue authorities below. 64. As far reliance of the assessee on the judgment of the Hon’ble Gujarat High Court and Hon’ble Bombay High Court are concerned, proposition laid down…

Dishman Pharmaceuticals & Chemicals Ltd., Ahmedabad vs. The ACIT., (OSD)Range-1, Ahmedabad

In the result, we allow appeal of the assessee and delete penalty confirmed by the ld

ITA 773/AHD/2011[2006-07]Status: DisposedITAT Ahmedabad23 May 2018AY 2006-07

Bench: Shri Rajpal Yadav & Shri Amarjit Singh

For Respondent: Shri R.P. Maurya, Sr.DR
Section 143(2)Section 143(3)Section 92BSection 92C

….1,203.72 lakhs whereas the assessee has interest free funds available at Rs.17,154.34 lakhs. The assessee has relied upon the judgment of the Hon’ble Gujarat High Court in the case of CIT Vs. Torrent Power Ltd., 363 ITR 474 (Guj), CIT Vs. Suzlon Energy Ltd., 354 ITR 630 (Guj) and judgment of Bombay High Court in the case of CIT Vs. Reliance Utilities & Power ltd., 313 ITR 340. On the other hand, the ld.DR relied upon the order of the Revenue authorities below. 64. As far reliance of the assessee on the judgment of the Hon’ble Gujarat High Court and Hon’ble Bombay High Court are concerned, proposition laid down…

The DCIT(OSD)Range-1, Ahmedabad vs. Dishman Pharmaceuticals & Chemicals Ltd., Ahmedabad

In the result, we allow appeal of the assessee and delete penalty confirmed by the ld

ITA 692/AHD/2011[2005-06]Status: DisposedITAT Ahmedabad23 May 2018AY 2005-06

Bench: Shri Rajpal Yadav & Shri Amarjit Singh

For Respondent: Shri R.P. Maurya, Sr.DR
Section 143(2)Section 143(3)Section 92BSection 92C

….1,203.72 lakhs whereas the assessee has interest free funds available at Rs.17,154.34 lakhs. The assessee has relied upon the judgment of the Hon’ble Gujarat High Court in the case of CIT Vs. Torrent Power Ltd., 363 ITR 474 (Guj), CIT Vs. Suzlon Energy Ltd., 354 ITR 630 (Guj) and judgment of Bombay High Court in the case of CIT Vs. Reliance Utilities & Power ltd., 313 ITR 340. On the other hand, the ld.DR relied upon the order of the Revenue authorities below. 64. As far reliance of the assessee on the judgment of the Hon’ble Gujarat High Court and Hon’ble Bombay High Court are concerned, proposition laid down…

Rajasthan State Industrial Development & Investment Corp. Ltd., Jaipur vs. ACIT, Jaipur

In the result, both set of cross appeals for the respective assessment years are disposed off with above directions

ITA 380/JPR/2017[2013-14]Status: DisposedITAT Jaipur29 Mar 2018AY 2013-14
For Appellant: Shri P C ParwalFor Respondent: Shri Varindar Mehta (CIT) fu/kZkfjrh dh vksj ls@
Section 115JSection 14ASection 80I

…deduction u/s 80IA. Some of these decisions are as under: - Nirma Industries Ltd. vs. DCIT 283 ITR 402 (Guj) - Phatela Cotgin Industries (P) ltd. vs. CIT 303 ITR 411 (P&H) - CIT v. Indo Matsushita Carbon Co. Ltd. 286 ITR 201 (Mad) - CIT vs. Suzlon Energy Ltd. 354 ITR 630 (Guj.) - Tata Sponge Iron Ltd. v. Commissioner of Income-tax 292 ITR 175 (Ori) 4.7 The AO has not allowed the claim of deduction u/s 80IA on other income. The other income is mainly in respect of the site plan charges, lease Rajasthan State Industries Development & Investment Corp. Ltd. agreement form, road cutting charges, penalty recovered fr…

Major Brands (India) Pvt. Ltd., Mumbai vs. Addl.CIT -5(2), Mumbai

In the result, the appeal filed by the assessee (Ground No

ITA 2153/MUM/2016[2011-12]Status: DisposedITAT Mumbai27 Feb 2018AY 2011-12

Bench: Shri C. N. Prasad, Jm &Dr. A.L.Saini, Am आयकरअपीऱसं./Ita No.2153/M/2016 (निर्धारणवषा / Assessment Year: 2011-12) Major Brands (India) Pvt. Vs. Acit-5(2), Mumbai Ltd. 401,Skyline Icon, Andheri Kurla Aayakarbhavan,M.K. Road,Andheri(East), Mumbai- Road,Mumbai-400020. 400059. स्थायीऱेखासं./ जीआइआरसं./ Pan/Gir No. : Aaccm 4949 B (Appellant) .. (Respondent) Appellant By :Shri Paras S.Savla, Ar Respondent By :Shri V. Vidhyadhar, Dr सुनवाईकीतारीख/ Date Of Hearing : 21/02/2018 घोषणाकीतारीख/Date Of Pronouncement : 27/02/2018 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am:

For Appellant: Shri Paras S.Savla, ARFor Respondent: Shri V. Vidhyadhar, DR
Section 143(3)Section 14A

…R 505 (bom)(HC)  CIT v. Gujarat Narmade Valley Fertilizers Co. Ltd. – 221 Taxman 479 (Guj) (HC)  CIT v. Amod Stamping (P) Ltd. – 223 taxmann 256(GUJ)(HC)  CIT v. Gujarat State Fertilizers & Chemicals Ltd. – 358 ITR 323(Guj) (HC)  CIT v. Torrent Power Ltd. 363 ITR 474(Guj) (HC)  CIT v. Hitachi Home & Life Solutions (I) Ltd. 221 Taxman 109(Guj) (HC) In view of the above,the counsel submitted before us that disallowance u/s 14A r.w.r 8D was not warranted since the assessee had sufficient own funds as compared to the investment made during the previous year 2010-11 relevant to the A.Y 2011-12.Apart from this th…

ACIT, Jaipur vs. Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur

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

ITA 323/JPR/2016[2009-10]Status: DisposedITAT Jaipur23 Feb 2018AY 2009-10
Section 143(3)

…2014 323/JP/2016, CO. No. 07/JP/2016 313& 421/JP/14, 93,207,94& 208/JP/2015 decision of Hon’ble Gujarath high Court in case of Nirma Indistries Ltd. vs DCIT 283 ITR 402 as well as decision of Hon’ble Gujarat High Court in case of CIT vs. Suzlon Engery Ltd. 354 ITR 630 and submitted that the Hon’ble Gujarat High Court has held that the interest received from trade debtors towards late payment of sales consideration is required to be included in the profits of the industrial undertaking for the purpose of deduction u/s 80IB of the Act. The ld. AR has submitted that the Hon’ble Gujarat High Court has delivered…

Rajasthan State Industrial Development & Investment Corp. Ltd., Jaipur vs. ACIT, Jaipur

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

ITA 94/JPR/2015[2012-13]Status: DisposedITAT Jaipur23 Feb 2018AY 2012-13
Section 143(3)

…2014 323/JP/2016, CO. No. 07/JP/2016 313& 421/JP/14, 93,207,94& 208/JP/2015 decision of Hon’ble Gujarath high Court in case of Nirma Indistries Ltd. vs DCIT 283 ITR 402 as well as decision of Hon’ble Gujarat High Court in case of CIT vs. Suzlon Engery Ltd. 354 ITR 630 and submitted that the Hon’ble Gujarat High Court has held that the interest received from trade debtors towards late payment of sales consideration is required to be included in the profits of the industrial undertaking for the purpose of deduction u/s 80IB of the Act. The ld. AR has submitted that the Hon’ble Gujarat High Court has delivered…

Rajasthan State Industrial Development & Investment Corp. Ltd., Jaipur vs. ACIT, Jaipur

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

ITA 93/JPR/2015[2011-12]Status: DisposedITAT Jaipur23 Feb 2018AY 2011-12
Section 143(3)

…2014 323/JP/2016, CO. No. 07/JP/2016 313& 421/JP/14, 93,207,94& 208/JP/2015 decision of Hon’ble Gujarath high Court in case of Nirma Indistries Ltd. vs DCIT 283 ITR 402 as well as decision of Hon’ble Gujarat High Court in case of CIT vs. Suzlon Engery Ltd. 354 ITR 630 and submitted that the Hon’ble Gujarat High Court has held that the interest received from trade debtors towards late payment of sales consideration is required to be included in the profits of the industrial undertaking for the purpose of deduction u/s 80IB of the Act. The ld. AR has submitted that the Hon’ble Gujarat High Court has delivered…

DCIT, Jaipur vs. Rajasthan State Industrial Development & Investment Corportation Ltd., Jaipur

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

ITA 208/JPR/2015[2012-13]Status: DisposedITAT Jaipur23 Feb 2018AY 2012-13
Section 143(3)

…2014 323/JP/2016, CO. No. 07/JP/2016 313& 421/JP/14, 93,207,94& 208/JP/2015 decision of Hon’ble Gujarath high Court in case of Nirma Indistries Ltd. vs DCIT 283 ITR 402 as well as decision of Hon’ble Gujarat High Court in case of CIT vs. Suzlon Engery Ltd. 354 ITR 630 and submitted that the Hon’ble Gujarat High Court has held that the interest received from trade debtors towards late payment of sales consideration is required to be included in the profits of the industrial undertaking for the purpose of deduction u/s 80IB of the Act. The ld. AR has submitted that the Hon’ble Gujarat High Court has delivered…

DCIT, Jaipur vs. Rajasthan State Industrial Development & Investment Corportation Ltd., Jaipur

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

ITA 207/JPR/2015[2011-12]Status: DisposedITAT Jaipur23 Feb 2018AY 2011-12
Section 143(3)

…2014 323/JP/2016, CO. No. 07/JP/2016 313& 421/JP/14, 93,207,94& 208/JP/2015 decision of Hon’ble Gujarath high Court in case of Nirma Indistries Ltd. vs DCIT 283 ITR 402 as well as decision of Hon’ble Gujarat High Court in case of CIT vs. Suzlon Engery Ltd. 354 ITR 630 and submitted that the Hon’ble Gujarat High Court has held that the interest received from trade debtors towards late payment of sales consideration is required to be included in the profits of the industrial undertaking for the purpose of deduction u/s 80IB of the Act. The ld. AR has submitted that the Hon’ble Gujarat High Court has delivered…

ACIT, Jaipur vs. Rajasthan State Industrial Development & Investment Corp., Jaipur

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

ITA 421/JPR/2014[2010-11]Status: DisposedITAT Jaipur23 Feb 2018AY 2010-11
Section 143(3)

…2014 323/JP/2016, CO. No. 07/JP/2016 313& 421/JP/14, 93,207,94& 208/JP/2015 decision of Hon’ble Gujarath high Court in case of Nirma Indistries Ltd. vs DCIT 283 ITR 402 as well as decision of Hon’ble Gujarat High Court in case of CIT vs. Suzlon Engery Ltd. 354 ITR 630 and submitted that the Hon’ble Gujarat High Court has held that the interest received from trade debtors towards late payment of sales consideration is required to be included in the profits of the industrial undertaking for the purpose of deduction u/s 80IB of the Act. The ld. AR has submitted that the Hon’ble Gujarat High Court has delivered…

ACIT, Jaipur vs. Rajasthan State Industrial Development & Investment Corp., Jaipur

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

ITA 420/JPR/2014[2009-10]Status: DisposedITAT Jaipur23 Feb 2018AY 2009-10
Section 143(3)

…2014 323/JP/2016, CO. No. 07/JP/2016 313& 421/JP/14, 93,207,94& 208/JP/2015 decision of Hon’ble Gujarath high Court in case of Nirma Indistries Ltd. vs DCIT 283 ITR 402 as well as decision of Hon’ble Gujarat High Court in case of CIT vs. Suzlon Engery Ltd. 354 ITR 630 and submitted that the Hon’ble Gujarat High Court has held that the interest received from trade debtors towards late payment of sales consideration is required to be included in the profits of the industrial undertaking for the purpose of deduction u/s 80IB of the Act. The ld. AR has submitted that the Hon’ble Gujarat High Court has delivered…

Rajasthan State Industrial Development & Investment Corp. Ltd., Jaipur vs. ACIT, Jaipur

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

ITA 313/JPR/2014[2010-11]Status: DisposedITAT Jaipur23 Feb 2018AY 2010-11
Section 143(3)

…2014 323/JP/2016, CO. No. 07/JP/2016 313& 421/JP/14, 93,207,94& 208/JP/2015 decision of Hon’ble Gujarath high Court in case of Nirma Indistries Ltd. vs DCIT 283 ITR 402 as well as decision of Hon’ble Gujarat High Court in case of CIT vs. Suzlon Engery Ltd. 354 ITR 630 and submitted that the Hon’ble Gujarat High Court has held that the interest received from trade debtors towards late payment of sales consideration is required to be included in the profits of the industrial undertaking for the purpose of deduction u/s 80IB of the Act. The ld. AR has submitted that the Hon’ble Gujarat High Court has delivered…

Rajasthan State Industrial Development & Investment Corp. Ltd., Jaipur vs. DCIT, Jaipur

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

ITA 311/JPR/2014[2009-10]Status: DisposedITAT Jaipur23 Feb 2018AY 2009-10
Section 143(3)

…2014 323/JP/2016, CO. No. 07/JP/2016 313& 421/JP/14, 93,207,94& 208/JP/2015 decision of Hon’ble Gujarath high Court in case of Nirma Indistries Ltd. vs DCIT 283 ITR 402 as well as decision of Hon’ble Gujarat High Court in case of CIT vs. Suzlon Engery Ltd. 354 ITR 630 and submitted that the Hon’ble Gujarat High Court has held that the interest received from trade debtors towards late payment of sales consideration is required to be included in the profits of the industrial undertaking for the purpose of deduction u/s 80IB of the Act. The ld. AR has submitted that the Hon’ble Gujarat High Court has delivered…

The ACIT, Ward-3(1), Ahmedabad vs. M/S. Nirma Credit & Capital P. Ltd., Ahmedabad

ITA 1057/AHD/2016[2010-11]Status: DisposedITAT Ahmedabad13 Feb 2018AY 2010-11
For Appellant: Shri Himanshu Shah, A.RFor Respondent: Shri V. K. Singh, Sr. D.R
Section 143(3)Section 14A

…from this explanation that these investments have not been made out of any borrowed funds. The appellant has placed its reliance on 'the judgment of jurisdictional High Court in the case of UTI Bank Ltd. 32 Taxman.com 370 (Guj.) and CIT vs Suzlon Energy Ltd. 354 ITR 630 (Guj). In both the cases it has been held that where the assessee has sufficient interest free funds to meet its tax free investment yielding exempt income then it can be presumed that the investments were made from interest free funds and not loaned funds .as well as there exist no direct nexus between interest bearing borrowed funds and such in…

M/S Mittal Pharma Pvt. Ltd., Jaipur vs. Income Tax Officer, Ward-1-2, Jaipur

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

ITA 734/JPR/2017[2012-13]Status: DisposedITAT Jaipur23 Nov 2017AY 2012-13
For Appellant: Shri P.C. Parwal (CA)For Respondent: Smt. Poonam Roy (DCIT)
Section 143(3)Section 36(1)(iii)Section 40

…under section 14A read with Rule 8D. It was held that since AO failed to establish direct nexus between borrowed funds and tax free investments, no disallowance could be made towards interest u/s 14A read with Rule 8D. (iii) CIT vs. Suzlon Energy Ltd. (2013) 354 ITR 630 (Guj.) (HC) Where assessee had own interest free funds many times over the investment made in Indian subsidiaries and further, there was no direct nexus between interest bearing borrowed funds and such investment, no disallowance of interest expenditure could be made u/s 14A. (iv) Hon’ble ITAT in case of Vijay Industries for A.Y. 06-07 in ITA N…

Maruti Suzuki India Ltd., New Delhi vs. Addl. CIT, New Delhi

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

ITA 6021/DEL/2012[2008-09]Status: DisposedITAT Delhi09 Nov 2017AY 2008-09

Bench: Shri N.K. Saini & Shri K.N. Charry

Section 143(3)Section 144CSection 144C(5)Section 14ASection 35DSection 43BSection 92C

…as per provisions of Rule 8D, even for assessment years 2008-09 and onwards. He submitted that similar view is taken in CIT v. Metalman Auto P. Ltd.: 336 ITR 434 (P&H) , CIT v. Reliance Utilities and Power Ltd.: 313 ITR 340 (Bom) , CIT v. Torrent Power Ltd.: 363 ITR 474 (Guj). ITA No.-6021/Del/2012 6.3. Reference can also be made to the decisions in Chemical & Mettallurgical Design Co. Ltd : ITA No. 803/2008 (Delhi), CIT Vs Ms. Sushma Kapoor : 319 ITR 299 (Delhi), ACIT v. Eicher Limited: 101 TTJ 369 (Del.) , Maruti Udyog Limited V. DCIT: 92 ITD 119 (Del.), on the aspect of section 14A of the Act, wherein it ha…

Vishal Engineers & Galvanizers, Ahmedabad vs. The ACIT, Circle-6, Ahmedabad

In the result, appeal of the assessee is partly allowed

ITA 1108/AHD/2015[2010-11]Status: DisposedITAT Ahmedabad09 Oct 2017AY 2010-11

Bench: Shri Rajpal Yadav & Shri N.K. Billaiyaआयकर अपील सं./ Ita No.1108/Ahd/2015 "नधा"रण वष"/Asstt. Year: 2010-11

For Appellant: Shri T.P. hemani, ARFor Respondent: Ms.Sonia Kumar, Addl.CIT(DR)
Section 14ASection 36Section 36(1)Section 36(1)(iii)

…th it. Therefore, it cannot be alleged that the assessee has used interest bearing fund for acquiring this asset. In support of the contentions, he relied upon the following decisions: “CIT Vs Torrent Power Ltd., 363 ITR 474 (Guj) CIT Vs. Suzlon Energy Ltd., 354 ITR 630 (Guj) CIT Vs. Gujarat Power Corporation Ltd., 352 ITR 583 (Guj) 3 CIT Vs. Hitachi Home & Life Solutions India ltd., 41 taxmann.com 540 (Guj) CIT Vs. Reliance Utilities & Power Ltd., 313 ITR 340 (Bom) Munjal Sales Corporation Vs. CIT, 298 ITR 298 (SC) 5. The ld.DR on the other hand relied upon the orders of the Revenue authorities. 6. We have d…

The DCIT(OSD) Circle-8, Ahmedabad vs. Voltamp Transformers Ltd., Ahmedabad

In the result appeal filed by the department is dismissed

ITA 2544/AHD/2014[2011-12]Status: DisposedITAT Ahmedabad26 Sept 2017AY 2011-12

Bench: Shri N.K. Billaiya & Shri Mahavir Prasad

For Appellant: Shri Prasoon Kabra, Sr. D.RFor Respondent: Shri Ashwin Shah, C.A
Section 115JSection 145ASection 14ASection 44A

…is an interest free fund on the form of Capital & Reserve is as under: Capital : Rs.10.12 Crore Reserve : Rs.363.50 Crore Investment in Mutual Fund as on 31/03/2011 is 41.08 Crore on Page No.4 of the AO. The assessee is covered by CIT vs. Torrent Power Ltd. 363 ITR 474 (Guj.). The assessee has suo moto added expenditure of Rs.15,45,480/- relating to exempt income under section 14A as per statement of income. 4. So far Ground No.3 is concerned regarding addition u/s.14A of the 51,52,843/- while computing book profit u/s.115JB. Learned AO held that clause (f) of explanation 1 to section 115JB(2) of the act is sq…

Shri Purshottam B. Pitroda, Ahmedabad vs. The ACIT, Range -12, Ahmedabad

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

ITA 351/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad22 Aug 2017AY 2009-10

Bench: Shri N.K. Billaiya & Shri Mahavir Prasad

For Appellant: Shri Tushar P. Hemani, A.RFor Respondent: Shri Mudit Nagpal, Sr. D.R
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 14ASection 22Section 234BSection 271(1)(c)Section 36(1)(iii)Section 44A

…dered view, it would meet the ends of justice if the disallowance is restricted to 1/8th on both the counts. We order accordingly.” Reliance is also further placed on followings: • CIT vs. Torrent Power Ltd. – 363 ITR 474 (Guj.) • CIT vs. Suzlon Energy Ltd. – 354 ITR 630 (Guj.) • CIT vs. Gujarat Power Corporation Ltd. – 352 ITR 583 (Guj) • CIT vs. Hitachi Home & Life solutions (I). Ltd. (2014) 41 taxmann.com 540 (Guj) • CIT vs. Reliance Utilities & Power Ltd. – 313 ITR 340 (Bom) • Munjal Sales Corporation vs. CIT – 298 ITR 298 (SC) Respectfully, following the ITAT order and above judgments no part of the interes…