CIT v. United Breweries

DCIT Circle 3(3)(1), Mumbai vs. M/S Reliance Industrial Ivestment & Holdings Ltd, Mumbai

In the result, this appeal is dismissed

…nterest but to further the business interest of the group as a whole. Hence, no infirmity could be found in the conclusion of Ld. CIT(A) that the funds were advanced out of commercial expediency / business exigencies. The case law of CIT V/s United Breweries (89 ITR 17), as referred to by Ld. CIT(A), duly support the said proposition. The same is also supported by the decision of Hon’ble Supreme Court in the case of S.A. Builders V/s CIT (288 ITR 1) wherein it was held that it was enough to show that the money was expanded not out of necessity and with a view to direct and immediate benefit but voluntarily and on…

DCIT Circle- 3 (3)(1), Mumbai vs. M/S Reliance Industrial Investment & Holdings Ltd, Mumbai

The appeal stand dismissed

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am (Hearing Through Video Conferencing Mode) आयकरअपील िं./ I.T.A. No. 37/Mum/2020 (धििाारण वर्ा / Assessment Year: 2013-14) Dcit Circle – 3(3)(1), M/S Reliance Industrial R. No. 609, 6Th Floor बिाम/ Investment & Holdings Ltd. 9Th Floor, Maker Chambers Iv, 222 Aaykar Bhavan, M. K. Road Vs. Mumbai-400 020 Nariman Point, Mumbai-400 021 स्थायीलेखा िं./ जीआइआर िं./ Pan/Gir No. Aaacr-5053-R (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : Revenue By : Shri Vinay Sinha, Ld. Cit-Dr Assessee By : Shri Nimesh Bora, Ld. Ar ुनवाई की तारीख/ : 10/08/2021 Date Of Hearing घोषणा की तारीख / : 01/09/2021 Date Of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeal By Revenue For Assessment Year (Ay) 2013-14 Arises Out Of The Order Of Learned Commissioner Of Income-Tax (Appeals)-8, Mumbai [Cit(A)], Dated 24/10/2019 In The Matter Of Assessment Framed By Ld. Ao U/S 143(3) Of The Act On 29/12/2016. The Ground Raised By The Revenue Read As Under: - 1. Whether On The Facts & In The Circumstances Of The Case & In Law, The Ld.Cit(A) Was Justified In Holding That Amount Has Been Given On Commercial Expediency Without Appreciating That The Assessee Has Not Given Any Credible

…s submissions, concurred that the loans were given out of commercial expediency and out of business exigency, namely to develop a Special Economic Zone in Gurgaon. This was as per the ratio of decision of Hon’ble Mysore High Court in CIT V/s United Breweries (89 ITR 17) which held that business of subsidiary could be regarded as the business of the parent company. Further, in the decision of Hon’ble Supreme Court in the case of S.A. Builders V/s CIT (288 ITR 1), it was held that it was enough to show that the money was expanded not out of necessity and with a view to direct and immediate benefit but voluntarily a…

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)

…rposes of business or profession, the interest on such borrowing is not deductible. Therefore, what is to be seen is "business purpose" and what the sister-concern did with the money advanced the AO has relied upon the order of CIT v/s United Breweries (1973) 89 ITR 17 (Mys) to state that the said interest income was capital in nature and cannot be allowed. The AO has also relied upon the proviso to section 36 (I) (iii) of the IT Act to state that the investment in the shares of the subsidiary would need to be disallowed as interest-bearing loans had been used for advancing Rs.25 crores as share application money…

Taurian Iron & Steel Co. P.Ltd, Mumbai vs. Addl CIT RG 4(3), Mumbai

In the result, appeal of the assessee is partly allowed, in terms indicated hereinabove

…the said reason, on giving of money to the 'WOS' and on use of the said money by the latter, the assessee company in any way. The Ld. A.R in support of his aforesaid contention, therein relied on the following Judgments/orders:- (i). CIT Vs. United Breweries (89 ITR 17)(High Court of Mysore) (ii). Bright Enterprises Ltd. Vs. CIT (381 ITR 107)(P&H) (iii). ITO Vs. Sterling Oil Resources (P) Ltd. (67 taxmann.com 2) 28. The Ld. A.R further in order to fortify his contention that re- characterization of a transaction is permissible in only two situations, as under:- (i). Where the economic substance of a transaction d…

M/S. Tata Industries Ltd, Mumbai vs. The ITO 2(3)(3), Mumbai

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

Bench: Shri G. S. Pannu, Accoutant Member & Shri Sanjay Gargtata Industries Ltd., Vs. The Income Tax Officer, Ward- Bombay House,24,Homi 2 (3) (3), Room No.555, Mody Street, Fort, Mumbai Aayakar Bhavan, Maharshi 400 001 Karve Road, Mumbai 400 020 Pan: Aaact 4058 L Appellant .. Respondent Appellant By Shri Dinesh Vyas, Ar Respondent By Shri Alok Johri, Dr Date Of Hearing 22-06-2016 Date Of Pronouncement 20-07-2016

…larger bench of Hon’ble supreme court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd ( 1997 ) 227 ITR 172 considered the issue of computation of income under various heads. e) Hon’ble HIGH COURT OF MYSORE in the case of United Breweries ([1973] 89 ITR 17) held “It is well-settled that the mere fact that a man holds all the shares in a company does not make the business carried on by that company his business, nor does it make the company his agents for the carrying on of the business. That proposition is just as true if the shareholder is itself a limited company. It is also well-settled that ther…