CIT v. V.I. Baby & Co.

254 ITR 248High Court2002#2929 most cited

What is CIT v. V.I. Baby & Co. authority for?

Where an assessee claims that investments were made from their own non-interest bearing funds, the onus is on them to establish this, particularly when funds are mixed.

40

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2015 to 2025.

Also referred to as

CIT v. V.I. Baby & Co. · 254 ITR 248 · business expediency · mixed funds · own funds · non-interest bearing funds · investment in shares · common pool of funds · Section 36(1)(iii) · Section 37(1)

Sections most often in play

Section 36(1)(iii)Section 143(3)Section 153A(1)(b)Section 195Section 35DSection 37(1)Section 40(a)(ia)Section 40A(2)(b)

Issues it is cited on

section 5(2)(b)interest free advancessection 211section 5(2)section 35dcarry forward of lossesmaximum marginal ratesection 40a(2)(b)section 40a(2)section 36(1)(iii)business expediencywritten down value

Judgments citing CIT v. V.I. Baby & Co.

M/S.Muthoot Bankers, Cochin vs. The ACIT, Cochin

In the result, the appeals of the assessee are partly allowed for statistical

ITA 93/COCH/2015[2011-12]Status: DisposedITAT Cochin19 Nov 2019AY 2011-12

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

Section 10Section 14A

…d utilized for his personal use. Therefore, the Assessing Officer made proportionate disallowance of interest bearing fund. For this purpose, the Assessing Officer relied on the judgment of the Jurisdictional High Court in the case of CIT vs. V.I. Baby & Co. 254 ITR 248 and the judgment of the Allahabad High Court in the case of Marolia & Sons vs. CIT 129 ITR 475. Section 36(1)(iii) of the I.T. Act deals with the deduction on the amount of interest paid in respect of capita borrowed for the purposes of business or profession. It would be found from clause (iii) of sub-section (1) of section 36 of the Act that th…

M/S.Muthoot Bankers, Cochin vs. The ACIT, Cochin

In the result, the appeals of the assessee are partly allowed for statistical

ITA 92/COCH/2015[2010-11]Status: DisposedITAT Cochin19 Nov 2019AY 2010-11

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

Section 10Section 14A

…d utilized for his personal use. Therefore, the Assessing Officer made proportionate disallowance of interest bearing fund. For this purpose, the Assessing Officer relied on the judgment of the Jurisdictional High Court in the case of CIT vs. V.I. Baby & Co. 254 ITR 248 and the judgment of the Allahabad High Court in the case of Marolia & Sons vs. CIT 129 ITR 475. Section 36(1)(iii) of the I.T. Act deals with the deduction on the amount of interest paid in respect of capita borrowed for the purposes of business or profession. It would be found from clause (iii) of sub-section (1) of section 36 of the Act that th…

M/S Vistaar Financial Services Pvt Ltd, Bangalore vs. The Assistant Commissioner of Income Tax Circle-7(1)(2), Bangalore

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

ITA 684/BANG/2019[2014-15]Status: DisposedITAT Bangalore22 Jul 2019AY 2014-15

Bench: Shri B.R. Baskaran & Shri Pavan Kumar Gadale

For Appellant: Shri Tata Krishna, AdvocateFor Respondent: Shri R.N. Siddappaji, Addl. CIT
Section 143(2)Section 143(3)Section 36(1)(iii)

…and utilization certificate required to be submitted to lending banks which are duly certified by the CA to the effect that the term loans raised were utilized for the purpose of its portfolio lending business”. Further in the case of CIT Vs. V I Baby & Co. 254 ITR 248 (Ker) at para 4 read as under : “ 4. We, are inclined to accept the argument raised by counsel for the Revenue, because the advances to the partners, their relatives and the sister concerns are not for business purposes and the assessee has not derived any benefit out of the same. Admittedly, no interest was charged on these advances. The Tribun…

DCIT, Alappuzha vs. M/S Aceelerated Freeze Drying Co, Ltd, Alappuzha

In the result, the appeal of the Revenue is allowed and the appeal of the

ITA 714/COCH/2008[2002-03]Status: DisposedITAT Cochin28 Jun 2019AY 2002-03

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

Section 143(3)Section 2Section 2(14)Section 42Section 50BSection 50B(1)

…The AO held that proportionate interest on money advanced without charging interest should be disallowed. He worked out the proportionate disallowance at Rs.1,03,50,000/-. He also relied on the decision of the Kerala High Court in the case of VI Baby & Co. (254 ITR 248). The contention of the assessee is that the interest was paid for specific advance like term loan, export packing credit and export bill discounting charges. It is the contention of the assessee that interest bearing funds were not diverted to the sister concerns as the assessee had sufficient resources. 9.1 On appeal, the CIT(A) observed that…

Aceelerated Freeze Drying Co.Ltd, Alappuzha vs. DCIT, Alappuzha

In the result, the appeal of the Revenue is allowed and the appeal of the

ITA 1286/COCH/2005[2002-03]Status: DisposedITAT Cochin28 Jun 2019AY 2002-03

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

Section 143(3)Section 2Section 2(14)Section 42Section 50BSection 50B(1)

…The AO held that proportionate interest on money advanced without charging interest should be disallowed. He worked out the proportionate disallowance at Rs.1,03,50,000/-. He also relied on the decision of the Kerala High Court in the case of VI Baby & Co. (254 ITR 248). The contention of the assessee is that the interest was paid for specific advance like term loan, export packing credit and export bill discounting charges. It is the contention of the assessee that interest bearing funds were not diverted to the sister concerns as the assessee had sufficient resources. 9.1 On appeal, the CIT(A) observed that…

Philip Anil Cherian, Pathanamthitta vs. ACIT, Thiruvalla

In the result, the appeals of the assessee are partly allowed for statistical

ITA 77/COCH/2018[2008-09]Status: DisposedITAT Cochin05 Feb 2019AY 2008-09

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

Section 36(1)(iii)

…es for non production of full vouchers. 3. Regarding Ground Nos. 1 & 2, the facts of the case are that the Assessing Officer disallowed the proportionate interest expenditure by relying on the decision of High Court of Kerala in the case of V.I. Baby & Co. (254 ITR 248) . The Assessing Officer rejected the claim of the assessee that sufficient interest funds were available and therefore, disallowance cannot be made. According7 to the Assessing Officer even if cash balances were available with the proprietor, I.T.A. Nos.77 & 412/Coch/2018 since he availed interest bearing loans and at the same time gave inte…

Sri.Philip Anil Cherian, Pathanamthitta vs. The DCIT, Cir-1, Thiruvalla

In the result, the appeals of the assessee are partly allowed for statistical

ITA 412/COCH/2018[2011-12]Status: DisposedITAT Cochin05 Feb 2019AY 2011-12

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

Section 36(1)(iii)

…es for non production of full vouchers. 3. Regarding Ground Nos. 1 & 2, the facts of the case are that the Assessing Officer disallowed the proportionate interest expenditure by relying on the decision of High Court of Kerala in the case of V.I. Baby & Co. (254 ITR 248) . The Assessing Officer rejected the claim of the assessee that sufficient interest funds were available and therefore, disallowance cannot be made. According7 to the Assessing Officer even if cash balances were available with the proprietor, I.T.A. Nos.77 & 412/Coch/2018 since he availed interest bearing loans and at the same time gave inte…

Khandwala Securities Ltd, Mumbai vs. ITO 4(3)(2), Mumbai

ITA 3100/MUM/2011[2006-07]Status: DisposedITAT Mumbai03 Aug 2018AY 2006-07

Bench: Shri R. C. Sharma, Am & Shri Sandeep Gosain, Jm आयकरअपीलसं./ I.T.A. No. 3100/Mum/2011 (निर्धारणवर्ा / Assessment Year: 2006-07)

For Appellant: Shri V. M. Chavda, ARFor Respondent: Shri V. Justin, DR
Section 143(1)Section 143(3)Section 36

…seewould not have given the advance to the party, it could have reduced borrowing to that extant. Therefore, it is imperative to disallow the interest expense in proportion of interest payment attributable to advance. Further in the case of CIT Vrs. Baby & Co 254 ITR 248(Ker) if was held that the .AO was justified in disallowing interest in proportion to the interest free advance. 1.3.2. In view of above facts, the disallowance of proportionate interest relating to loss ofRs. 3.50 crore given M/s. Vimpson Investment Pvt Ltd is upheld and disallowance of notional proportionate interest on loan of Rs. 1.80 crore g…

Income-Tax Officer vs. M/S. Bharat Glass Tube Ltd

In the result, the appeal of the Revenue is dismissed

ITA 1816/PUN/2016[2012-13]Status: DisposedITAT Pune18 Jul 2018AY 2012-13

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm आयकर अपील सं आयकर अपील सं. / Ita No. 1816/Pun/2016 आयकर अपील सं आयकर अपील सं िनधा"रण वष" िनधा"रण वष" / Assessment Year : 2012-13 िनधा"रण वष" िनधा"रण वष"

For Appellant: Shri Pramod ShingteFor Respondent: Dr. Vivek Aggarwal

…nvestments. Thus as per the principle of precedent, it is the latest authority and needs to be followed. The ld. A.R. has correctly pointed out that the ratio of the contrary judgement of the Hon. Kerala High Court in the case of CIT Vs.V.I. Baby & Co. (2002) 254 ITR 248 (Ker.) is not applicable on the facts of the appellant's case. This is because of two reasons. Firstly, the said decision pronounced in 2001 is earlier and the decision of the Reliance Utilities and Power Ltd. is pronounced in 2009 is later and secondly, the decision of Reliance Utilities and Power Ltd. is by the Jurisdictional High Court, hence…

Asst CIT 11(3)(2), Mumbai vs. Vinca Developers P.Ltd, Mumbai

In the result both the appeals filed by the assessee is partly allowed and

ITA 649/MUM/2016[2011-12]Status: DisposedITAT Mumbai30 May 2018AY 2011-12

Bench: Shri R.C. Sharma & Shri Pawan Singhacit-11(3)(2), M/S Vinca Developers Pvt. Ltd. 6Th Floor, Akruti Trade Centre, Room No. 427, Aayakar Bhavan, M.K. Road, Road No. 07, Marol Midc, Vs. Mumbai-400020. Andheri (East), Mumbai-400072 Pan:Aaccv8042J (Appellant) (Respondent) Cross Objection No. 33/Mum/2016 (Ita No. 649/Mum/16 (A.Y- 2011-12) M/S Vinca Developers Pvt. Ltd. Acit-11(3)(2), 6Th Floor, Akruti Trade Centre, Room No. 427, Aayakar Road No. 07, Marol Midc, Bhavan, M.K. Road, Vs. Mumbai-400020. Andheri (East), Mumbai-400072 Pan:Aaccv8042J (Appellant) (Respondent) Ita No. (Tp)A 1854/Mum/2016 (Assessment Year- 2011-12) M/S Vinca Developers Pvt. Ltd. Acit-11(3)(2), 6Th Floor, Akruti Trade Centre, Room No. 427, Aayakar Road No. 07, Marol Midc, Bhavan, M.K. Road, Vs. Andheri (East), Mumbai-400020. Mumbai-400072 Pan:Aaccv8042J (Appellant) (Respondent)

For Appellant: Shri Vijay Mehta (AR)For Respondent: Shri V. Jenardhanan (DR)
Section 143(3)Section 144C(13)Section 254(1)Section 36(1)(iii)Section 92C

…n M/s. Akruti City Limited.?" 4 "Whether on the facts and in the circumstances of the case and in law, the Hon'ble DRP erred in not following the ratio laid down by the Hon'ble High Court of Kerala in the case of Commissioner of Income-tax Vs V I Baby & Co. [254 ITR 248] wherein the Hon'ble High Court held that the assessee with liquidity cannot claim that it can give interest free advances to the partners & others and then borrow funds from the bank on interest for business purpose.?" 5 The appellant prays that the order of the Hon'ble DRP-II, Mumbai on the above ground be set aside and that of the A.O. be res…

M/S. Liberty Marketers, Ernakulam vs. The ACIT, Cochin

In the result, the appeals of the assessee are dismissed

ITA 86/COCH/2016[2011-12]Status: DisposedITAT Cochin30 Mar 2018AY 2011-12

Bench: S/Shri Chandra Poojari , Am & George George K., Jm

Section 36(1)(iii)

…wance made by the Assessing Officer u/s. 36(1)(iii) of the Act and confirmation of the same by the CIT(A). He relied on the following judgments: I.T.A. Nos. 409/C/2014 & 85&86/Coch/2016 i) Madhav Prasad Jatia vs. CIT (118 ITR 200 (SC) ii) CIT vs. V.I. Baby (254 ITR 248 (Ker.) iii) Somasundaram & Brothers vs. CIT (239 ITR 795) (Mds.) 7.1 The Ld. DR distinguished the judgments relied upon by the assessee. The Ld. DR submitted that the facts in the case of CIT vs. Hotel Savera (supra) are that the advance was made with assessee-firm’s own funds and interest paid on borrowed capital was deductible. Similarly, acco…

M/S. Liberty Marketers, Ernakulam vs. The ACIT, Cochin

In the result, the appeals of the assessee are dismissed

ITA 85/COCH/2016[2010-11]Status: DisposedITAT Cochin30 Mar 2018AY 2010-11

Bench: S/Shri Chandra Poojari , Am & George George K., Jm

Section 36(1)(iii)

…wance made by the Assessing Officer u/s. 36(1)(iii) of the Act and confirmation of the same by the CIT(A). He relied on the following judgments: I.T.A. Nos. 409/C/2014 & 85&86/Coch/2016 i) Madhav Prasad Jatia vs. CIT (118 ITR 200 (SC) ii) CIT vs. V.I. Baby (254 ITR 248 (Ker.) iii) Somasundaram & Brothers vs. CIT (239 ITR 795) (Mds.) 7.1 The Ld. DR distinguished the judgments relied upon by the assessee. The Ld. DR submitted that the facts in the case of CIT vs. Hotel Savera (supra) are that the advance was made with assessee-firm’s own funds and interest paid on borrowed capital was deductible. Similarly, acco…

M/S.Liberty Marketers, Ernakulam vs. The ACIT, Cochin

In the result, the appeals of the assessee are dismissed

ITA 409/COCH/2014[2009-10]Status: DisposedITAT Cochin30 Mar 2018AY 2009-10

Bench: S/Shri Chandra Poojari , Am & George George K., Jm

Section 36(1)(iii)

…wance made by the Assessing Officer u/s. 36(1)(iii) of the Act and confirmation of the same by the CIT(A). He relied on the following judgments: I.T.A. Nos. 409/C/2014 & 85&86/Coch/2016 i) Madhav Prasad Jatia vs. CIT (118 ITR 200 (SC) ii) CIT vs. V.I. Baby (254 ITR 248 (Ker.) iii) Somasundaram & Brothers vs. CIT (239 ITR 795) (Mds.) 7.1 The Ld. DR distinguished the judgments relied upon by the assessee. The Ld. DR submitted that the facts in the case of CIT vs. Hotel Savera (supra) are that the advance was made with assessee-firm’s own funds and interest paid on borrowed capital was deductible. Similarly, acco…

M/S.Muthoot Chitty Fund, Kozhencherry vs. The DCIT, Thiruvalla

In the result, this appeal filed by the assessee stands dismissed

ITA 496/COCH/2017[2001-02]Status: DisposedITAT Cochin08 Nov 2017AY 2001-02

Bench: Shri George George K

For Appellant: Sri. R.SreenivasanFor Respondent: Sri. A.Dhanaraj, Sr.DR
Section 143(3)Section 147

…he Assessing Officer in making the disallowance was that the assessee had diverted interest bearing funds for non-business purposes. The Assessing Officer had relied on the judgment of the Hon’ble Kerala High Court in the case of CIT v. V.I.Baby & Co. [(2002) 254 ITR 248 (Ker.)], judgment of the Hon’ble Madras High Court in the case of K.Somasundaram & Brothers v. CIT [(1999) 238 ITR 939 (Mad.)] and the judgment of the Hon’ble Punjab & Haryana High Court in the case of CIT v. Abhishek Industries Ltd. [(2006) 286 ITR 01 (P&H)]. 3.2 Aggrieved by the order of the CIT(A), assessee preferred appeal to the first appel…

Kuloday Technopack P. Ltd, Mumbai vs. ITO 8(2)(2), Mumbai

In the result, appeal of the assessee in ITA No

ITA 3300/MUM/2013[2009-10]Status: DisposedITAT Mumbai29 Sept 2017AY 2009-10

Bench: Shri Joginder Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No. 3300/Mum/2013 (नििाारण वर्ा / Assessment Year : 2009-10 ) आयकर अपीऱ सं./I.T.A. No. 2423/Mum/2014 (नििाारण वर्ा / Assessment Year : 2010-11)

For Appellant: Shri. M. SubramanianFor Respondent: Shri Rajesh Kumar Yadav,DR
Section 143(3)Section 154Section 172Section 172(1)Section 194CSection 195Section 40

…153 CTR (Mad) 153: (1999) 238 ITR 939 (Mad), CIT vs. M.S. Venkateswaran (1997) 141 CTR (Mad) 510 : (1996) 222 ITR 163 (Mad), CIT vs. P. Ganu Rao & Sons (1989) 77 CTR (Mad) 28 : (1990) 185 ITR 324 (Mad), CIT vs V.I. Baby & Co. (2002) 174 CTR (Ker) 164 : (2002) 254 ITR 248 (Ker), CIT vs, Motor General Finance Ltd. (2002) 173 CTR (Del) 123 : (2002) 254 ITR 449 (Del), CIT vs. H.R. Sugar Factory (P) Ltd. (1990) 87 CTR (All) 132 : (1991) 187 ITR 363 (All), Indian Metals and Ferro Alloys Ltd. vs. CIT (1992) 193 ITR 344 (Ori), CIT vs. H.R. Sugar Factory (1991) 190 ITR 349 (All), S.A. Builders Ltd. vs. CIT & Anr. (2004) 2…

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

…putation. Support for picking this disallowance under section 36(1)(iii) is derived from the decision of the honourable Supreme Court given in the case of SA Builders Ltd. reported in 288 ITR 1(SC). Further reliance is also placed on the decisions reported in 254 ITR 248 (Ker) and 318 ITR 210 (Ker.) and on 25 TTJ (Coch.) 131. The assessee has not raised any material to fulfil the criteria of commercial expediency.” 5.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of the assessee and having considered the same, the CIT(A) granted partial relief, which…

DCIT, Chennai vs. Mustang Trading & Investments Pvt. Ltd., Chennai

In the result, the appeal of the Revenue is dismissed

ITA 3309/CHNY/2016[2012-13]Status: DisposedITAT Chennai12 Apr 2017AY 2012-13

Bench: Shri N.R.S. Ganesan & Shri D.S.Sunder Singh

For Appellant: Mr.G.Gireesh, CAFor Respondent: 22.02.2017
Section 32Section 36(1)(iii)

…ies was made as a measure of commercial expediency as held in the case of CIT vs S.A.Builders (288 ITR 1). 3.3 Having regard to the decision of Hon’ble High Courts in the cases of CIT v. Abhishek Industries Ltd. (286 ITR 1)(P & H) and CIT v. V.I. Baby & Co. (254 ITR 248)(Ker.), the CIT(A) ought to have upheld the impugned disallowance made u/s.36(1)(iii). 4. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored. Delay: The revenue has filed the appeal with delay of two days and the A…

Shapoorji Pallanji and Company P.Ltd, Mumbai vs. Addl CIT RG 3(3), Mumbai

The appeal of the assessee is partly allowed

ITA 3053/MUM/2015[2011-12]Status: DisposedITAT Mumbai03 Mar 2017AY 2011-12

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwalassessment Year: 2011-12 M/S Shapoorji Pallonji & Co. Dcit, Ltd. Circle-3(3), बनाम/ Shapporji Pallonji Centre, Room No.609, 6Th Floor, Vs. 41/44 Minoo Desai Marg, Aayakar Bhavan, M.K.Road, Colaba Mumbai-400020 Mumbai-400005 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aaacs6994C

Section 143(3)Section 14A

…t the assessee had given loans and advances of Rs. 2988.98 crores to its subsidiaries as on 3110312002, out its own funds and internal accruals except to the extent of relying upon the decision of Hon'ble Kerala High Court in the case of V.I. Baby &: Company, 254 ITR 248 and decision of the Hon'ble Bombay High Court in the case of Phalton Sugar Works Lid, 208 ITR 989 disallowed the said interest of Rs. 11,19,382/-. Being aggrieved the assessee filed appeal before the first appellate authority. 5.2 It was contended on behalf of the assessee that assessee's own funds were far in excess of the interest free loans gi…

Asstcit (OSD) 8(3), Mumbai vs. Vicna Developers P.Ltd, Mumbai

In the result, the revenue’s appeal is dismissed

ITA 6171/MUM/2014[2010-11]Status: DisposedITAT Mumbai25 May 2016AY 2010-11

Bench: Shri Jason P Boaz, Am & Shri Sandeep Gosain, Jm आयकर अपील सं./ I.T.A. No. 6171/Mum/2014 ("नधा"रण वष" / Assessment Year: 2010-11) M/S. Vinca Developers Pvt. Ltd. 6Th Asst. Commissioner Of Income Tax (O.S.D)- 8(3), Room No.217,Aayakar Floor, Ackruti Trade Centre, बनाम/ Bhavan, M.K. Marg, Road No.7, Marol Midc, Vs. Mumbai-400 020. Andheri (E), Mumbai-400 093. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaccv 8042J (अपीलाथ" /Appellant) (""यथ" / Respondent) :

For Appellant: Shri Pavan Ved
Section 143(3)Section 36(1)(iiia)

…IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI JASON P BOAZ, AM AND SHRI SANDEEP GOSAIN, JM आयकर अपील सं./ I.T.A. No. 6171/Mum/2014 ("नधा"रण वष" / Assessment Year: 2010-11) M/s. Vinca Developers Pvt. Ltd. 6th Asst. Commissioner of Income Tax (O.S.D)- 8(3), Room No.217,Aayakar floor, Ackruti Trade Centre, बनाम/ Bhavan, M.K. Marg, Road No.7, Marol MIDC, Vs. Mumbai-400 020. Andheri (E), Mumbai-400 093. "थायी लेखा सं./जीआइआर सं./PAN/GIR No. AACCV 8042J (अपीलाथ" /Appellant) (""यथ" / Respondent) : : Shri G M Doss अपीलाथ" क" ओर से / Appellant by : Shri Pavan Ved ""यथ" क" ओर से/Respondent by सुनवाई क…

P.Sundararajan, Avanashi vs. DCIT, Tiruppur

In the result, the appeal of the assessee in ITA No

ITA 1666/CHNY/2013[2006-07]Status: DisposedITAT Chennai25 Jun 2015AY 2006-07

Bench: Shri Chandra Poojari & Shri V. Durga Raoआयकर अपील सं./ I.T.A. No.1666/Mds/2013 ("नधा"रण वष" / Assessment Year : 2006-2007)

For Appellant: Shri. G. Baskar, AdvocateFor Respondent: Shri. N. Madhavan, IRS, JCIT
Section 143(3)Section 147Section 148Section 36

…(Mad), interest on borrowed capital to the extent the same was utilised for non- business purposes was disallowed under Section 36(1)(viii) of the Act. I.T.A.No.1666/Mds/2013. :- 22 -: 14.3 In the case of Commissioner of Income-Tax v. V.I. Baby and Co., 254 ITR 248, the Kerala High Court, while reversing the order of the Tribunal, held as under (Page 250): ‘’We are inclined to accept the argument raised by counsel for the Revenue, because the advances to the partners, their relatives and the sister concerns are not for business purposes and the assessee has not derived any benefit out of the same. Admitted…