CIT v. VGR Foundations

RENAULT NISSAN AUTOMOTIVE INDIA PRIVATE LIMITED,KANCHEEPURAM vs. ACIT, CHENNAI

In the result, the appeal filed by the assessee is allowed for statistical purposes

Bench: Shri V. Durga Rao & Shri Manjunatha, G.आयकर अपील सं./I.T.A. No.2218/Chny/2015 िनधा"रण वष"/Assessment Year: 2009-10 M/S. Renault Nissan Automotive Vs. The Assistant Commissioner Of India Private Limited, Income Tax, Plot No. 1, Sipcot Industrial Park, Company Circle V(3), Sriperumbudur, Kanchipuram District, Chennai 600 034. Tamil Nadu 602 105. [Pan:Aadcr7965B] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri N. V. Balaji, Advocate ""थ" की ओर से/Respondent By : Shri P. Dhivahar, Cit सुनवाई की तारीख/ Date Of Hearing : 23.08.2023 घोषणा की तारीख /Date Of Pronouncement : 30.08.2023 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 3, Chennai, Dated 02.09.2015 Relevant To The Assessment Year 2009-10. 2. Brief Facts Of The Case Are That The Assessee Has Filed Its Return Of Income On 23.09.2009 For The Assessment Year 2009-10 Declaring Taxable Income Of Nil. The Case Was Selected For Scrutiny By Issue Of 2

…s Fertilizers Ltd v. CIT, 227 ITR 172. In doing so, the Assessing Officer has rejected the plea of the assessee that the impugned interest was not taxable, being a capital receipt in terms of ratio relied upon by the appellant in CIT V. VGR Foundations (2007) 298 ITR 132 and Indian Oil Panipat Power Consortium Ltd v. ITO 315 ITR 255. 6. Before the ld. CIT(A), by reiterating the submissions made before the Assessing Officer the assessee has submitted that the decision relied on by the Assessing Officer in the case of Tuticorin Alkali Chemicals and Fertilizers v. CIT (supra) does not apply to the assessee’s fact pa…

IL&FS TAMILNADU POWER CO. LTD.,,CHENNAI vs. DCIT, COMPANY CIRCLE - 2 92),, CHENNAI

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.:2018/Chny/2019 िनधा"रण वष" /Assessment Year: 2013-14 The Jcit (Osd), Il & Fs Tamilnadu Power Corporate Circle -2(2), Vs. Company Ltd., Chennai – 34. New No.2, (Old No.21), 4Th Floor, Kpr Tower, 1St Street, Subba Rao Avenue, College Road, Chennai – 600 006. Pan: Aabcf 1176A (अपीलाथ"/Appellant) (""यथ"/Respondent) & आयकर अपील सं./Ita Nos.:1989, 1990 & 3217/Chny/2019 िनधा"रण वष" /Assessment Years: 2012-13, 2013-14 & 2014-15 The Jcit (Osd), Il & Fs Tamilnadu Power Corporate Circle -2(2), Company Ltd., Vs. Chennai – 34. New No.2, (Old No.21), 4Th Floor, Kpr Tower, 1St Street, Subba Rao Avenue, College Road, Chennai – 600 006. Pan: Aabcf 1176A (अपीलाथ"/Appellant) (""यथ"/Respondent) "नधा"रती क" ओर से/Assessee By : Shri Raghunath, Ca राज" की ओर से /Revenue By : Shri Ar.V. Sreenivasan, Addl.Cit सुनवाई क" तार"ख/Date Of Hearing : 03.08.2022 घोषणा क" तार"ख/Date Of Pronouncement : 03.08.2022

…the submissions made with reference to case laws cited, I am of the considered opinion, all those case laws cited by the AR are not applicable to the facts of the appellant's case as the judgement of jurisdictional High Court in the case of VGR Foundation in 298 ITR 132 is rendered in the context of share- application money, not falling under the category of borrowed fund. But, in the appellant's case, the funds are borrowed from banks which carry interest-cost. Similarly, FCCDs issued by the appellant are debt instruments. Therefore, the appellant has deployed interest bearing funds in fixed deposits with the b…

JCIT (OSD) CORPORATE CIRCLE-2(2), CHENNAI vs. IL & FS TAMIL NADU POWER COMPANY LIMITED, CHENNAI

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.:2018/Chny/2019 िनधा"रण वष" /Assessment Year: 2013-14 The Jcit (Osd), Il & Fs Tamilnadu Power Corporate Circle -2(2), Vs. Company Ltd., Chennai – 34. New No.2, (Old No.21), 4Th Floor, Kpr Tower, 1St Street, Subba Rao Avenue, College Road, Chennai – 600 006. Pan: Aabcf 1176A (अपीलाथ"/Appellant) (""यथ"/Respondent) & आयकर अपील सं./Ita Nos.:1989, 1990 & 3217/Chny/2019 िनधा"रण वष" /Assessment Years: 2012-13, 2013-14 & 2014-15 The Jcit (Osd), Il & Fs Tamilnadu Power Corporate Circle -2(2), Company Ltd., Vs. Chennai – 34. New No.2, (Old No.21), 4Th Floor, Kpr Tower, 1St Street, Subba Rao Avenue, College Road, Chennai – 600 006. Pan: Aabcf 1176A (अपीलाथ"/Appellant) (""यथ"/Respondent) "नधा"रती क" ओर से/Assessee By : Shri Raghunath, Ca राज" की ओर से /Revenue By : Shri Ar.V. Sreenivasan, Addl.Cit सुनवाई क" तार"ख/Date Of Hearing : 03.08.2022 घोषणा क" तार"ख/Date Of Pronouncement : 03.08.2022

…the submissions made with reference to case laws cited, I am of the considered opinion, all those case laws cited by the AR are not applicable to the facts of the appellant's case as the judgement of jurisdictional High Court in the case of VGR Foundation in 298 ITR 132 is rendered in the context of share- application money, not falling under the category of borrowed fund. But, in the appellant's case, the funds are borrowed from banks which carry interest-cost. Similarly, FCCDs issued by the appellant are debt instruments. Therefore, the appellant has deployed interest bearing funds in fixed deposits with the b…

IL & FS TAMIL NADU POWER COMPANY LIMITED,CHENNAI vs. JCIT CORPORATE CIRCLE-2(2), CHENNAI

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.:2018/Chny/2019 िनधा"रण वष" /Assessment Year: 2013-14 The Jcit (Osd), Il & Fs Tamilnadu Power Corporate Circle -2(2), Vs. Company Ltd., Chennai – 34. New No.2, (Old No.21), 4Th Floor, Kpr Tower, 1St Street, Subba Rao Avenue, College Road, Chennai – 600 006. Pan: Aabcf 1176A (अपीलाथ"/Appellant) (""यथ"/Respondent) & आयकर अपील सं./Ita Nos.:1989, 1990 & 3217/Chny/2019 िनधा"रण वष" /Assessment Years: 2012-13, 2013-14 & 2014-15 The Jcit (Osd), Il & Fs Tamilnadu Power Corporate Circle -2(2), Company Ltd., Vs. Chennai – 34. New No.2, (Old No.21), 4Th Floor, Kpr Tower, 1St Street, Subba Rao Avenue, College Road, Chennai – 600 006. Pan: Aabcf 1176A (अपीलाथ"/Appellant) (""यथ"/Respondent) "नधा"रती क" ओर से/Assessee By : Shri Raghunath, Ca राज" की ओर से /Revenue By : Shri Ar.V. Sreenivasan, Addl.Cit सुनवाई क" तार"ख/Date Of Hearing : 03.08.2022 घोषणा क" तार"ख/Date Of Pronouncement : 03.08.2022

…the submissions made with reference to case laws cited, I am of the considered opinion, all those case laws cited by the AR are not applicable to the facts of the appellant's case as the judgement of jurisdictional High Court in the case of VGR Foundation in 298 ITR 132 is rendered in the context of share- application money, not falling under the category of borrowed fund. But, in the appellant's case, the funds are borrowed from banks which carry interest-cost. Similarly, FCCDs issued by the appellant are debt instruments. Therefore, the appellant has deployed interest bearing funds in fixed deposits with the b…

IL & FS TAMIL NADU POWER COMPANY LIMITED,CHENNAI vs. JCIT CORPORATE CIRCLE-2(2), CHENNAI

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.:2018/Chny/2019 िनधा"रण वष" /Assessment Year: 2013-14 The Jcit (Osd), Il & Fs Tamilnadu Power Corporate Circle -2(2), Vs. Company Ltd., Chennai – 34. New No.2, (Old No.21), 4Th Floor, Kpr Tower, 1St Street, Subba Rao Avenue, College Road, Chennai – 600 006. Pan: Aabcf 1176A (अपीलाथ"/Appellant) (""यथ"/Respondent) & आयकर अपील सं./Ita Nos.:1989, 1990 & 3217/Chny/2019 िनधा"रण वष" /Assessment Years: 2012-13, 2013-14 & 2014-15 The Jcit (Osd), Il & Fs Tamilnadu Power Corporate Circle -2(2), Company Ltd., Vs. Chennai – 34. New No.2, (Old No.21), 4Th Floor, Kpr Tower, 1St Street, Subba Rao Avenue, College Road, Chennai – 600 006. Pan: Aabcf 1176A (अपीलाथ"/Appellant) (""यथ"/Respondent) "नधा"रती क" ओर से/Assessee By : Shri Raghunath, Ca राज" की ओर से /Revenue By : Shri Ar.V. Sreenivasan, Addl.Cit सुनवाई क" तार"ख/Date Of Hearing : 03.08.2022 घोषणा क" तार"ख/Date Of Pronouncement : 03.08.2022

…the submissions made with reference to case laws cited, I am of the considered opinion, all those case laws cited by the AR are not applicable to the facts of the appellant's case as the judgement of jurisdictional High Court in the case of VGR Foundation in 298 ITR 132 is rendered in the context of share- application money, not falling under the category of borrowed fund. But, in the appellant's case, the funds are borrowed from banks which carry interest-cost. Similarly, FCCDs issued by the appellant are debt instruments. Therefore, the appellant has deployed interest bearing funds in fixed deposits with the b…

DCIT CORPORATE CIRCLE 1(2), CHENNAI vs. CHENNAI METRO RAIL LIMITED, CHENNAI

In the result, both the appeals filed by the Revenue are dismissed

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. Nos.2180 & 2181/Chny/2018 िनधा"रण वष"/Assessment Years: 2013-14 & 2014-15 The Deputy Commissioner Of Vs. M/S. Chennai Metro Rail Limited, Income Tax, Administrative Building, Chennai Metro Corporate Circle 1(2), Rail Depot, P.H. Road, Opp. To Daniel Chennai 600 034. Thomas School, Koyambedu, Chennai 600 107. [Pan: Aadcc2233K] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri M. Rajan, Cit ""थ" की ओर से/Respondent By : Shri G. Baskar, Advocate सुनवाई की तारीख/ Date Of Hearing : 10.05.2022 घोषणा की तारीख /Date Of Pronouncement : 24.06.2022 आदेश /O R D E R Per V. Durga Rao: Both The Appeals Filed By The Revenue Are Directed Against The Common Order Of The Ld. Commissioner Of Income Tax (Appeals) 4, Chennai Dated 14.05.2018 Relevant To The Assessment Years 2013-14 & 2014-15. Since Common Ground Involved, Both The Appeals Were Heard & Being Disposed Of By This Common Order For The Sake Of Convenience. The Only Common Ground Raised In Both The Appeals Relates To Deletion Of Addition Made Towards Interest Income.

…late order. 6.2 Before us, besides strongly supporting the order of the ld. CIT(A), 10 I.T.A. Nos.2180 & 2181/Chny/18 the ld. Counsel for the assessee has relied on the decision of the Hon’ble Jurisdictional High Court in the case of CIT v. VGR Foundations 298 ITR 132, wherein, by following the decisions of the Hon’ble Supreme Court in the cases of CIT v. Bokaro Steel Ltd. (supra) and CIT v. Karnaaka Power Corporation (supra), the Hon’ble High Court has concluded that the interest on moneys borrowed for the period prior to commencement of business is allowable as deduction under section 57 against interest inc…

DCIT CORPORATE CIRCLE 1(2), CHENNAI vs. CHENNAI METRO RAIL LIMITED, CHENNAI

In the result, both the appeals filed by the Revenue are dismissed

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. Nos.2180 & 2181/Chny/2018 िनधा"रण वष"/Assessment Years: 2013-14 & 2014-15 The Deputy Commissioner Of Vs. M/S. Chennai Metro Rail Limited, Income Tax, Administrative Building, Chennai Metro Corporate Circle 1(2), Rail Depot, P.H. Road, Opp. To Daniel Chennai 600 034. Thomas School, Koyambedu, Chennai 600 107. [Pan: Aadcc2233K] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri M. Rajan, Cit ""थ" की ओर से/Respondent By : Shri G. Baskar, Advocate सुनवाई की तारीख/ Date Of Hearing : 10.05.2022 घोषणा की तारीख /Date Of Pronouncement : 24.06.2022 आदेश /O R D E R Per V. Durga Rao: Both The Appeals Filed By The Revenue Are Directed Against The Common Order Of The Ld. Commissioner Of Income Tax (Appeals) 4, Chennai Dated 14.05.2018 Relevant To The Assessment Years 2013-14 & 2014-15. Since Common Ground Involved, Both The Appeals Were Heard & Being Disposed Of By This Common Order For The Sake Of Convenience. The Only Common Ground Raised In Both The Appeals Relates To Deletion Of Addition Made Towards Interest Income.

…late order. 6.2 Before us, besides strongly supporting the order of the ld. CIT(A), 10 I.T.A. Nos.2180 & 2181/Chny/18 the ld. Counsel for the assessee has relied on the decision of the Hon’ble Jurisdictional High Court in the case of CIT v. VGR Foundations 298 ITR 132, wherein, by following the decisions of the Hon’ble Supreme Court in the cases of CIT v. Bokaro Steel Ltd. (supra) and CIT v. Karnaaka Power Corporation (supra), the Hon’ble High Court has concluded that the interest on moneys borrowed for the period prior to commencement of business is allowable as deduction under section 57 against interest inc…

INDIA METAL ONE STEEL PLATE PROCESSING PRIVATE LTD.,CHENNAI vs. DCIT, CHENNAI

In the result, the assessee’s appeal is dismissed

Bench: Shri George Mathan & Shri S. Jayaramanआयकर अपील सं/.I.T.A. No. 3497/Chny/2016 "नधा"रण वष"/Assessment Year : 2012-13 M/S. India Metal One Steel Plate The Deputy Commissioner Of Income Processing Pvt. Ltd., Vs. Tax, Prestige Palladium Bayan, Corporate Circle – 2(2), 6Th Floor, Door No. 129 To 140 121, Mahatma Gandhi Road, Greams Road, Chennai – 600 006. Nungambakkam, Chennai – 600 034. [Pan: Aacci 5959F] (अपीलाथ"/Appellant) (%&यथ'/Respondent)

…r whatsoever all or any of the foregoing grounds of appeal at or before the hearing of the appeal.” 4. The Ld. AR presented the case on the lines of grounds of appeal and relied on the Jurisdictional High Court decision in the case of CIT vs VGR Foundations 298 ITR 132. Per contra, the Ld. DR supported elaborately the order of the Ld. CIT(A). 5. We heard the rival submissions and gone through the relevant material. The assessee’s financials disclose that out of share capital of Rs. 1,227,000,000/- as on 31.03.2012, the assessee kept Rs. 230,500,000/- in deposit accounts. On which, it earned interest incom…