DCIT v. S.G. Investments & Industries Ltd.

89 ITD 44Income Tax Appellate Tribunal2004#4077 most cited

What is DCIT v. S.G. Investments & Industries Ltd. authority for?

All expenses connected with exempt income must be disallowed, irrespective of their nature (direct, indirect, fixed, variable, managerial, or financial).

29

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2015 to 2024.

Also referred to as

S.G. Investments & Industries Ltd. · 89 ITD 44 · ITAT · Section 14A · exempt income · disallowance of expenses · connected with exempt income · managerial expenses · financial expenses

Sections most often in play

Section 1961Section 10(34) of the Income Tax ActSection 10(38) of the Income Tax ActSection 143(1) of the Income Tax ActSection 143(3) of the Income Tax ActSection 144 of the Income Tax ActSection 14ASection 14A of the Income Tax Act

Issues it is cited on

section 80lasection 86section 80ib(4)section 80lsection 80ia(4)(i)section 167bsection 80msection 167clarificatory amendmentsection 80ia(4)period of holdinginfrastructure facility

Judgments citing DCIT v. S.G. Investments & Industries Ltd.

ITO, WD-12(1), Kolkata vs. M/S Bonanza Trading Co. Pvt. Ltd., Kolkata

In the result, the appeal filed by the Revenue (ITA No

ITA 174/KOL/2016[2010-2011]Status: DisposedITAT Kolkata10 Jan 2018AY 2010-2011

Bench: Shri A. T. Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.172, 173 & 174/Kol/2016 (िनधा"रणवष" / Assessment Years: 2008-09, 2009-10 & 2010-11) Vs. M/S Bonanza Trading Ito, Wd-12(1), Kolkata Company (P) Ltd. Aayakar Bhawan, P-7, Chowringhee Square, Kolkata – B-103, Rai Enclave, 7/1A, 700 069. Sunny Park, Kolkata – 700 019. "थायीलेखासं./जीआइआरसं./Pan/Gir No. : Aabcb 0175 D (Appellant) .. (Respondent) Appellantby :Shrisaurabh Kumar, Addl. Cit(Dr) Respondent By :Shri Asim Choudhury, Advocate. सुनवाईकीतारीख/ Date Of Hearing : 13/11/2017 घोषणाकीतारीख/Date Of Pronouncement : 10/01/2018 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Three Appeals Filed By The Revenue, Pertaining To Assessment Years2008-09, 2009-10 & 2010-11, Are Directed Against The Orders Passed By The Ld. Commissioner Of Income Tax (Appeals)-9, Kolkata,In Appeal Nos. 588/589/ & 590/Cit(A)-9/Wd-12(1)/2014-15/Kol, Which In Turn Arise Out Of Assessment Orders Passed By The Assessing Officer U/S.143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As The ‘Act’). 2.Since, These Three Appeals Relate To Same Assessee, Different Assessment Years, Identical Issues Are Involved, Therefore, These Have Been Clubbed & Heard Together & A Consolidated Order Is Being Passed For The Sake Of Convenience & Brevity. Revenue’S Appeal In Ita No.172/Kol/2016, Assessment Year 2008-09, Is Taken As The Lead Case.

For Appellant: ShriSaurabh Kumar, Addl. CIT(DR)For Respondent: Shri Asim Choudhury, Advocate
Section 10Section 10(38)Section 143(3)Section 14ASection 40

…me but nothing had been stated about indirect expenses in theform of Administrative and other expenses incurred by the assessee, so was the case withexpenditures incurred as interest. The AO noted that in the case of S.G. Investment & industries Ltd, Vs. DCIT 89 ITD 44, Hon'ble ITAT, Kolkata had opined that the word " in relationto" is of much wider import and not only encompasses direct & indirect expenditure but alsothose expenditures which are proximate to any income not chargeable to tax.Hence, expenditures relating to exempt income are liable to be disallowed. Actually, the assessee had disallowed certain ex…

ITO, WD-12(1), Kolkata vs. M/S Bonanza Trading Co. Pvt. Ltd., Kolkata

In the result, the appeal filed by the Revenue (ITA No

ITA 173/KOL/2016[2009-2010]Status: DisposedITAT Kolkata10 Jan 2018AY 2009-2010

Bench: Shri A. T. Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.172, 173 & 174/Kol/2016 (िनधा"रणवष" / Assessment Years: 2008-09, 2009-10 & 2010-11) Vs. M/S Bonanza Trading Ito, Wd-12(1), Kolkata Company (P) Ltd. Aayakar Bhawan, P-7, Chowringhee Square, Kolkata – B-103, Rai Enclave, 7/1A, 700 069. Sunny Park, Kolkata – 700 019. "थायीलेखासं./जीआइआरसं./Pan/Gir No. : Aabcb 0175 D (Appellant) .. (Respondent) Appellantby :Shrisaurabh Kumar, Addl. Cit(Dr) Respondent By :Shri Asim Choudhury, Advocate. सुनवाईकीतारीख/ Date Of Hearing : 13/11/2017 घोषणाकीतारीख/Date Of Pronouncement : 10/01/2018 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Three Appeals Filed By The Revenue, Pertaining To Assessment Years2008-09, 2009-10 & 2010-11, Are Directed Against The Orders Passed By The Ld. Commissioner Of Income Tax (Appeals)-9, Kolkata,In Appeal Nos. 588/589/ & 590/Cit(A)-9/Wd-12(1)/2014-15/Kol, Which In Turn Arise Out Of Assessment Orders Passed By The Assessing Officer U/S.143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As The ‘Act’). 2.Since, These Three Appeals Relate To Same Assessee, Different Assessment Years, Identical Issues Are Involved, Therefore, These Have Been Clubbed & Heard Together & A Consolidated Order Is Being Passed For The Sake Of Convenience & Brevity. Revenue’S Appeal In Ita No.172/Kol/2016, Assessment Year 2008-09, Is Taken As The Lead Case.

For Appellant: ShriSaurabh Kumar, Addl. CIT(DR)For Respondent: Shri Asim Choudhury, Advocate
Section 10Section 10(38)Section 143(3)Section 14ASection 40

…me but nothing had been stated about indirect expenses in theform of Administrative and other expenses incurred by the assessee, so was the case withexpenditures incurred as interest. The AO noted that in the case of S.G. Investment & industries Ltd, Vs. DCIT 89 ITD 44, Hon'ble ITAT, Kolkata had opined that the word " in relationto" is of much wider import and not only encompasses direct & indirect expenditure but alsothose expenditures which are proximate to any income not chargeable to tax.Hence, expenditures relating to exempt income are liable to be disallowed. Actually, the assessee had disallowed certain ex…

ITO, WD-12(1), Kolkata vs. M/S Bonanza Trading Co. Pvt. Ltd., Kolkata

In the result, the appeal filed by the Revenue (ITA No

ITA 172/KOL/2016[2008-09]Status: DisposedITAT Kolkata10 Jan 2018AY 2008-09

Bench: Shri A. T. Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.172, 173 & 174/Kol/2016 (िनधा"रणवष" / Assessment Years: 2008-09, 2009-10 & 2010-11) Vs. M/S Bonanza Trading Ito, Wd-12(1), Kolkata Company (P) Ltd. Aayakar Bhawan, P-7, Chowringhee Square, Kolkata – B-103, Rai Enclave, 7/1A, 700 069. Sunny Park, Kolkata – 700 019. "थायीलेखासं./जीआइआरसं./Pan/Gir No. : Aabcb 0175 D (Appellant) .. (Respondent) Appellantby :Shrisaurabh Kumar, Addl. Cit(Dr) Respondent By :Shri Asim Choudhury, Advocate. सुनवाईकीतारीख/ Date Of Hearing : 13/11/2017 घोषणाकीतारीख/Date Of Pronouncement : 10/01/2018 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Three Appeals Filed By The Revenue, Pertaining To Assessment Years2008-09, 2009-10 & 2010-11, Are Directed Against The Orders Passed By The Ld. Commissioner Of Income Tax (Appeals)-9, Kolkata,In Appeal Nos. 588/589/ & 590/Cit(A)-9/Wd-12(1)/2014-15/Kol, Which In Turn Arise Out Of Assessment Orders Passed By The Assessing Officer U/S.143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As The ‘Act’). 2.Since, These Three Appeals Relate To Same Assessee, Different Assessment Years, Identical Issues Are Involved, Therefore, These Have Been Clubbed & Heard Together & A Consolidated Order Is Being Passed For The Sake Of Convenience & Brevity. Revenue’S Appeal In Ita No.172/Kol/2016, Assessment Year 2008-09, Is Taken As The Lead Case.

For Appellant: ShriSaurabh Kumar, Addl. CIT(DR)For Respondent: Shri Asim Choudhury, Advocate
Section 10Section 10(38)Section 143(3)Section 14ASection 40

…me but nothing had been stated about indirect expenses in theform of Administrative and other expenses incurred by the assessee, so was the case withexpenditures incurred as interest. The AO noted that in the case of S.G. Investment & industries Ltd, Vs. DCIT 89 ITD 44, Hon'ble ITAT, Kolkata had opined that the word " in relationto" is of much wider import and not only encompasses direct & indirect expenditure but alsothose expenditures which are proximate to any income not chargeable to tax.Hence, expenditures relating to exempt income are liable to be disallowed. Actually, the assessee had disallowed certain ex…

Investrick Securities P (I) P.Ltd, Mumbai vs. ITO 2(2)(1), Mumbai

In the result, appeals of the assessee in ITA No

ITA 539/MUM/2013[2008-09]Status: DisposedITAT Mumbai24 Feb 2017AY 2008-09

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.538/Mum/2013 ("नधा"रण वष" / Assessment Year : 2007-08) आयकर अपील सं./I.T.A. No.539/Mum/2013 ("नधा"रण वष" / Assessment Year : 2008-09) Investrick Securities (India) Dy. Commissioner Of बनाम/ Pvt. Ltd., Income Tax 2(2), V. 608, Dalamal House, Aayakar Bhavan, Nariman Point, M.K. Marg, Mumbai – 400 021. Mumbai - 400020. "थायी लेखा सं./Pan : Aaaci5005J (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

For Appellant: NoneFor Respondent: Mr. SaurabhKumar Rai, DR
Section 10(34)Section 143(3)Section 14A

…s involved-Said decision –making process is very complicated and requires very careful analysis – Thus, proportionate management expenses are required to be deducted while computing the dividend income. ii) DCIT v. S. G. Investments and Industries Ltd (2004) 89 ITD 44 (Cal), Held, expenditure incurred by the assessee in relation to income which does not form part of the total income as mentioned in Sec.14A has to be given a wider meaning and would include both direct and indirect relationship between the expenditure and exempt income. iii) ACIT v. Premier Consolidated Capital Trust (I) Ltd,(2004) 83 TTJ (Mumbai…

Investrick Securities P (I) P.Ltd, Mumbai vs. DCIT 2(2), Mumbai

In the result, appeals of the assessee in ITA No

ITA 538/MUM/2013[2007-08]Status: DisposedITAT Mumbai24 Feb 2017AY 2007-08

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.538/Mum/2013 ("नधा"रण वष" / Assessment Year : 2007-08) आयकर अपील सं./I.T.A. No.539/Mum/2013 ("नधा"रण वष" / Assessment Year : 2008-09) Investrick Securities (India) Dy. Commissioner Of बनाम/ Pvt. Ltd., Income Tax 2(2), V. 608, Dalamal House, Aayakar Bhavan, Nariman Point, M.K. Marg, Mumbai – 400 021. Mumbai - 400020. "थायी लेखा सं./Pan : Aaaci5005J (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

For Appellant: NoneFor Respondent: Mr. SaurabhKumar Rai, DR
Section 10(34)Section 143(3)Section 14A

…s involved-Said decision –making process is very complicated and requires very careful analysis – Thus, proportionate management expenses are required to be deducted while computing the dividend income. ii) DCIT v. S. G. Investments and Industries Ltd (2004) 89 ITD 44 (Cal), Held, expenditure incurred by the assessee in relation to income which does not form part of the total income as mentioned in Sec.14A has to be given a wider meaning and would include both direct and indirect relationship between the expenditure and exempt income. iii) ACIT v. Premier Consolidated Capital Trust (I) Ltd,(2004) 83 TTJ (Mumbai…

Sonphankhi Shares & Securities P.Ltd, Mumbai vs. ITO WD 4(2)(2), Mumbai

In the result, assessee company appeal in ITA No 7068/Mum/2012 for assessment year 2009-10 is partly allowed

ITA 7068/MUM/2012[2009-10]Status: DisposedITAT Mumbai03 Aug 2016AY 2009-10

Bench: Shri Saktijit Dey & Shri Ramit Kochar

For Respondent: Dr. Suman Ratnam Darsi
Section 143(2)Section 143(3)Section 14ASection 234ASection 271(1)(c)Section 73

…at, the dividend income being exempt under section 10(33), the interest on capital borrowed for acquisition of relevant shares yielding such dividend cannot be allowed deduction by operation of section 14A. In Dy. CIT v. SG Investments &Industries Ltd. (2004) 89 ITD 44 (Cal.), the Calcutta Bench of this Tribunal has laid down two propositions: one, in view of section 14A inserted in the Income Tax Act with retrospective effect from 1-4-1962, pro rata expenses on account of interest relatable to investment in shares for earning exempt income from dividend are to be disallowed against taxable income and only the ne…

Saurashtra Fuels P.Ltd, Mumbai vs. DCIT Cir 3(3), Mumbai

In the result, assessee appeal in ITA No 7274/Mum/2012 for assessment year 2009-10 is partly allowed

ITA 7273/MUM/2012[2007-08]Status: DisposedITAT Mumbai06 Jun 2016AY 2007-08

Bench: Shri Saktijit Dey & Shri Ramit Kochar

For Respondent: Shri Ritesh Mishra(D.R.)
Section 143(2)Section 143(3)Section 14ASection 80M

…at, the dividend income being exempt under section 10(33), the interest on capital borrowed for acquisition of relevant shares yielding such dividend cannot be allowed deduction by operation of section 14A. In Dy. CIT v. SG Investments &Industries Ltd. (2004) 89 ITD 44 (Cal.), the Calcutta Bench of this Tribunal has laid down two propositions: one, in view ITA 7273-74/Mum/2012 20 of section 14A inserted in the Income Tax Act with retrospective effect from 1-4-1962, pro rata expenses on account of interest relatable to investment in shares for earning exempt income from dividend are to be disallowed against tax…

DCIT, Circle - 8, Kolkata vs. M/S. Newdeal Finance & Investment Limited, Kolkata

In the result, Revenue’s appeal is allowed for statistical purpose

ITA 1558/KOL/2011[2007-08]Status: DisposedITAT Kolkata11 Mar 2016AY 2007-08

Bench: Shri Mahavir Singh & Shri Waseem Ahmedassessment Year :2007-08

Section 143(2)Section 143(3)Section 14ASection 36(1)(iii)

…or chargeable at concessional rate of tax. Ld. DR submitted the case laws in support of his contentions and he relied on the order of AO. 1) CIT Thrissur v. Smt. Leena Ramachandran (2011) 10 taxman.com 109 (Ker) 2) DCIT V. S.G. Investment & Industries (2004) 89 ITD 44 (Kol) 3) Dhanuka & Sons v. CIT (2011) 12 taxmann.com 227 (Cal) 4) CIT, Thiruvananthapuram v. State Bank of Travancore (2011) 16 taxmann.com 289 (Ker) 5) Mohan T. Advani Finance (P) Ltd. v. ITO (2006) 9 SOT 675 (Mum) 6) Mohanlal M. Shah v. DCTI, (2007) 105 ITD 669 (Mum) Pradeep Kar v. ACIT (2009) 319 ITR 416 (Kar) ITO v. Sanatan Textrade Ltd. (2010)…

Asst CIT Cen Cir 25, Mumbai vs. Patel Engineering Ltd, Mumbai

In the result, appeal of revenue is dismissed, whereas cross objection of the assessee is allowed in part, in terms indicated hereinabove

ITA 6605/MUM/2013[2005-06]Status: DisposedITAT Mumbai18 Nov 2015AY 2005-06
For Appellant: Shri Mayur KisnadwalaFor Respondent: Shri Deepkant Prasad
Section 115Section 115JSection 143(3)Section 14ASection 234BSection 234DSection 80Section 80ISection 80l

…t the facts of following decisions are distinguishable from the facts of the appellant's case: & CO No.9/15 • ACIT v. Citicorp Finance (India) Ltd. 108 ITD 457 • Everplus Securities & Finance Ltd. v. DCIT 101 ITD 151 • DCIT v. SG Investments & industries Ltd. 89 ITD 44 17. We have considered rival contentions and found that a clear finding has been given by the CIT(A) to the effect that amount was receivable on account of hire charges on machinery from JV or on account of assessee’s share in the JV firm. The question of disallowance of interest u/s.14A arises only when the funds have been given to JV/sister conce…