East India Pharmaceutical Works Ltd. v. CIT

224 ITR 627Supreme Court of India1997#694 most cited

What is East India Pharmaceutical Works Ltd. v. CIT authority for?

Where an assessee has mixed funds (both interest-bearing and interest-free funds) and makes an interest-free advance or investment, it is presumed that the interest-free funds were utilized first if they are sufficient to cover such advances or investments. This prevents disallowance of interest on borrowed funds under Section 36(1)(iii).

146

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2015 to 2026.

Also referred to as

East India Pharmaceutical Works Ltd v CIT · 224 ITR 627 · Section 36(1)(iii) · interest disallowance · mixed fund theory · interest free advances · borrowed funds · commercial expediency · presumption of utilization · interest on borrowed capital

Also reported as

91 Taxmann 185

Sections most often in play

Section 143(1)Section 143(3)Section 1961Section 36(1)(iii)Section 144C(1)Section 144C(5)Section 194JSection 195
Read the full judgment

Issues it is cited on

interest free advancessection 36(1)(iii)advance taxcommercial expediencysection 32section 36(1)section 36section 40(a)capital expendituresection 37(1)section 40section 37

Judgments citing East India Pharmaceutical Works Ltd. v. CIT

Hero Moto Corp Ltd., New Delhi vs. Neac, Delhi

ITA 706/DEL/2021[2016-17]Status: DisposedITAT Delhi26 Nov 2021AY 2016-17

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Surendra Pal
Section 143(3)Section 144BSection 144CSection 144C(13)Section 145Section 1lSection 80ISection 92C

…34 crores only. In such circumstances, it is to be presumed that only interest free funds have been utilized for making investments during the year. Reference, in this regard, is made to the following decisions: i. East India Pharmaceutical Works Ltd. v. CIT: 224 ITR 627 (SC) ii. CIT v. Reliance Industries Ltd.: 410 ITR 466 (SC) iii. CIT v. UTI Bank Ltd.: 215 Taxman 8 - The Supreme Court dismissed the revenue‟s SLP in Civil Appeal No. 468/2014 iv. Woolcombers of India Ltd. v. CIT: 134 ITR 219 (Cal.) v. PCIT v. Basti Sugar Mills Co. Ltd.: ITA No. 205 of 2018 (Del HC) vi. PCIT v. Reebok India Company: [2018] 259 Ta…

DCIT, Circle- 1(1), Gurgaon vs. Dlf Universal Ltd., Gurgaon

In the result, the appeal of the Revenue is dismissed

ITA 2180/DEL/2018[2014-15]Status: DisposedITAT Delhi29 Sept 2021AY 2014-15

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri Satyajeet Goel, CAFor Respondent: Shri J.K. Mishra, CIT-DR
Section 143(3)Section 14ASection 14A(2)

…were from interest free funds and, resultantly, no disallowance of interest can be made. In deleting the disallowance of interest, the Hon’ble Bombay High Court relied on the judgment of Hon’ble Supreme Court in East India Pharmaceutical Works V/s CIT (1997) 224 ITR 627 (SC). It is further notices that the Hon’ble Bombay High Court in CIT V/s HDFC Bank Ltd. (2014) 366 ITR 505 (Bom), has held that where assessee’s capital, profit, and reserves etc. were higher than the investment in tax free securities, it would have to be presumed that the investment made by the assessee would be out of interest free funds avail…

Hero Motocrop Ltd., New Delhi vs. ACIT, Circle- 11(1), New Delhi

The appeal of the assessee is partly allowed

ITA 9187/DEL/2019[2015-16]Status: DisposedITAT Delhi13 Apr 2021AY 2015-16

Bench: Shri Sudhanshu Srivastava & Shri O.P. Kantassessment Year: 2015-16

Section 115JSection 143(3)Section 144CSection 145ASection 80ISection 92C

…vs. ACIT year. In such circumstances, it is to be presumed that only interest free funds have been utilized for making investments during the year. Reference, in this regard, was made to the following decisions: - East India Pharmaceutical Works Ltd. v. CIT: 224 ITR 627 (SC) - CIT v. Reliance Industries Ltd.: 410 ITR 466 (SC) - CIT v. UTI Bank Ltd.: 215 Taxman 8 - The Supreme Court dismissed the revenue’s SLP in Civil Appeal No. 468/2014 - Woolcombers of India Ltd. v. CIT: 134 ITR 219 (Cal.) - PCIT v. Basti Sugar Mills Co. Ltd.: ITA No. 205 of 2018 (Del HC) - PCIT v. Reebok India Company: [2018] 259 Taxman 100 (…

Kalyani Steels Ltd, Pune vs. Deputy Commissioner of Income-Tax, Circle - 14, Pune

In the result, the appeal is partly allowed

ITA 265/PUN/2018[2014-15]Status: DisposedITAT Pune15 Mar 2021AY 2014-15

Bench: Shri R.S. Syal & Shri S.S.Viswanethra Raviआयकर अपील सं. / Ita No.265/Pun/2018 िनधा"रण वष" / Assessment Year 2014-15 Kalyani Steels Ltd., Vs. Dcit, Circle-14, Mundhwa, Pune – 411 036 Pune Pan : Aaack7315D Appellant Respondent

Section 14A

…disallowed on the basis that the investments were made out of interest bearing funds. In reaching this conclusion, the Hon’ble High Court relied on the judgment of the Hon’ble Supreme Court in the case of East India Pharmaceutical Works Ltd. Vs. CIT (1997) 224 ITR 627 (SC). Similar view has been taken by the Hon'ble Dehi High Court in CIT vs. Tin Box Company (2003) 260 ITR 637 (Del), holding that when the capital and interest free unsecured loan with the assessee far exceeded the interest free loan advanced to the sister concern, disallowance of part of interest out of total interest paid by the assessee to…

Poona Constructtion Machinery & Products Pvt.Ltd, Pune vs. Deputy Commissioner of Income Tax, Pune

In the result, the appeal is partly allowed

ITA 493/PUN/2017[2012-13]Status: DisposedITAT Pune06 Oct 2020AY 2012-13

Bench: Shri R.S. Syal & Shri Partha Sarathi Chaudhuryिनधा"रण वष" / Assessment Year : 2012-13

Section 36(1)(iii)

…disallowed on the basis that the investments were made out of interest bearing funds. In reaching this conclusion, the Hon’ble High Court relied on the judgment of the Hon’ble Supreme Court in the case of East India Pharmaceutical Works Ltd. Vs. CIT (1997) 224 ITR 627 (SC). Similar view has been taken by the Hon'ble Dehi High Court in CIT vs. Tin Box Company (2003) 260 ITR 637 (Del), holding that when the capital and interest free unsecured loan with the assessee far exceeded the interest free loan advanced to the sister concern, disallowance of part of interest out of total interest paid by the assessee to…

M/S Aarkay Investments Pvt. Ltd., Kolkata vs. A.C.I.T., Circle-4(1), Kolkata

In the result, the appeal of assessee is allowed

ITA 2091/KOL/2019[2016-17]Status: DisposedITAT Kolkata23 Sept 2020AY 2016-17

Bench: Hon’Ble Shri J.Sudhakar Reddy, Am & Hon’Ble Shri A. T. Varkey, Jm Assessment Year: 2016-17

Section 14Section 14A

…4A of the Act ( read with rule 8D(2)(ii) of I.T Rules, 1962 ) needs to be set aside”. We note that Hon’ble Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. (2009) 313 ITR 340(Bom HC) and in the cases of East India Pharmaceutical Works 224 ITR 627 (SC) & Woolcombers 134 ITR 219 (Cal) have laid the proposition of law that when there are both interest free funds and interest bearing funds, the presumption is that interest free funds were utilized for interest free investment and advances. Thus, we note that factual matrix discussed supra, the assessee had total own funds more than Rs 147 cro…

Unitech Marketing Services, Mumbai vs. ACIT - Circle -17 (3), Mumbai

The appeal of the assessee is allowed for statistical purposes

ITA 5254/MUM/2018[2013-14]Status: DisposedITAT Mumbai24 Aug 2020AY 2013-14

Bench: Shri Pramod Kumar & Shri Amarjit Singhm/S Unitech Marketing Services, Asst. Commissioner Of Income Tax, 511, Plot No. 15, Raheja Plaza, Circle-17(3), Co. Soc. Ltd. Veera Desai Road, Aayakar Bhavan, 1St Floor, Vs. Shah Industrial Estate, Mumbai Mumbai – 400 053

For Appellant: Shri V. P. Kothari, A.RFor Respondent: Shri Padma Ram Mirdha, D.R
Section 143(2)Section 143(3)Section 14A

…sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds available. In our opinion, the Supreme Court in East India Pharmaceutical Works Ltd. v. CIT [1997] 224 ITR 627 had the occasion to consider the decision of the Calcutta High Court in Woolcombers of India Ltd. (1982) 134 ITR 219 where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true M/s Unitech Marketing Services Vs. Asst. Commissioner of Income Tax, Circle-17(3) 5 ITA No.5254/Mu…

The DCIT, Cochin vs. M/S.Aspinwall & Co. Ltd, Cochin

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

ITA 133/COCH/2017[2012-13]Status: DisposedITAT Cochin19 May 2020AY 2012-13

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

Section 14A

…of Section 37 (or other applicable provisions of the Act) could be allowed. I.T.A. Nos. 60&61/Coch/2015 & 128 & 133/Coch/2017 13.2 On appeal, the CIT(A) observed that though the ratio of the Supreme Court in the case of East India Pharmaceutical Works Ltd. (224 ITR 627) related to interest payments on borrowed funds to pay statutory income-tax dues, the situation was Para Materia with the facts in the case of the assessee in as much as that moneys being statutory dues (AIT payments) that needed to be paid in time were retained by the assessee beyond stipulated due dates, thereby causing an increase in its ope…

M/S Aspinwall & Co., Ltd, Cochin vs. The ACIT, Cochin

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

ITA 128/COCH/2017[2012-13]Status: DisposedITAT Cochin19 May 2020AY 2012-13

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

Section 14A

…of Section 37 (or other applicable provisions of the Act) could be allowed. I.T.A. Nos. 60&61/Coch/2015 & 128 & 133/Coch/2017 13.2 On appeal, the CIT(A) observed that though the ratio of the Supreme Court in the case of East India Pharmaceutical Works Ltd. (224 ITR 627) related to interest payments on borrowed funds to pay statutory income-tax dues, the situation was Para Materia with the facts in the case of the assessee in as much as that moneys being statutory dues (AIT payments) that needed to be paid in time were retained by the assessee beyond stipulated due dates, thereby causing an increase in its ope…

Aspinwall & Company Ltd, Cochin vs. The ACIT, Cochin

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

ITA 61/COCH/2015[2006-07]Status: DisposedITAT Cochin19 May 2020AY 2006-07

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

Section 14A

…of Section 37 (or other applicable provisions of the Act) could be allowed. I.T.A. Nos. 60&61/Coch/2015 & 128 & 133/Coch/2017 13.2 On appeal, the CIT(A) observed that though the ratio of the Supreme Court in the case of East India Pharmaceutical Works Ltd. (224 ITR 627) related to interest payments on borrowed funds to pay statutory income-tax dues, the situation was Para Materia with the facts in the case of the assessee in as much as that moneys being statutory dues (AIT payments) that needed to be paid in time were retained by the assessee beyond stipulated due dates, thereby causing an increase in its ope…

Aspinwall & Company Ltd, Cochin vs. The ACIT, Cochin

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

ITA 60/COCH/2015[2006-07]Status: DisposedITAT Cochin19 May 2020AY 2006-07

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

Section 14A

…of Section 37 (or other applicable provisions of the Act) could be allowed. I.T.A. Nos. 60&61/Coch/2015 & 128 & 133/Coch/2017 13.2 On appeal, the CIT(A) observed that though the ratio of the Supreme Court in the case of East India Pharmaceutical Works Ltd. (224 ITR 627) related to interest payments on borrowed funds to pay statutory income-tax dues, the situation was Para Materia with the facts in the case of the assessee in as much as that moneys being statutory dues (AIT payments) that needed to be paid in time were retained by the assessee beyond stipulated due dates, thereby causing an increase in its ope…

M/S Punjab State Industrial Development Corporatin Ltd., Chandigarh vs. ACIT, C-2(1), Chandigarh

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

ITA 1293/CHANDI/2018[2014-15]Status: DisposedITAT Chandigarh28 Apr 2020AY 2014-15
For Appellant: Shri Atul Goyal, CAFor Respondent: Dr. Gulshan Raj, CIT (DR)
Section 10(34)Section 14ASection 250(6)Section 43BSection 56

…s were from interest free funds and, resultantly, no disallowance of interest can be made. In deleting the disallowance of interest, the Hon'ble Bombay High Court relied on the judgment of Hon'ble Supreme Court in East India Pharmaceutical Works VS CIT (1997) 224 ITR 627 (SC). It is further noticed that the Hon'ble Bombay High Court in CIT vs. HDFC Bank Ltd. (2014) 366ITR 505 (Bom), has held that where assessee's capital, profit, and reserves etc. were higher than the investment in tax free securities, it would have to be presumed that the investment made by the assessee would be out of interest free funds availa…

Pinakin Laxmichand Shah, Mumbai vs. ACIT - 19 (2), Mumbai

In the result, assessee’s appeals are partly allowed for statistical purposes

ITA 6112/MUM/2018[2013-14]Status: DisposedITAT Mumbai13 Mar 2020AY 2013-14

Bench: Shri Saktijit Dey & Shri S. Rifaur Rahman

For Appellant: Shri S.C. Tiwari a/wFor Respondent: Shri Kumar Padmapani Bora
Section 36Section 57

…IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA no.6112/Mum./2018 (Assessment Year : 2013–14) ITA no.6113/Mum./2018 (Assessment Year : 2014–15) Shri Pinakin Laxmichand Shah 212, Shreeji Chambers ……………. Appellant Opera House, Mumbai 400 004 PAN – AACPS7747Q v/s Asstt. Commissioner of Income Tax ……………. Respondent Circle–19(2), Mumbai Assessee by : Shri S.C. Tiwari a/w Ms. Rutuja Pawar Revenue by : Shri Kumar Padmapani Bora Date of Hearing – 16.12.2020 Date of Order – 13.03.2020 O R D E R PER SAKTIJIT DEY. J.M. T…

State Bank of India, Mumbai vs. Addl CIT RG 2(2), Mumbai

In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed, as indicated above

ITA 3644/MUM/2016[2008-09]Status: DisposedITAT Mumbai03 Feb 2020AY 2008-09

Bench: Sri Mahavir Singh, Vp & Sri G Manjunatha, Am आयकर अपील सुं./ Ita No. 3644/Mum/2016 (ननर्ाारण वर्ा / Assessment Year 2008-09) State Bank Of India The Dy. Commissioner Of 3Rd Floor, Corporate Centre Income Tax, Circle -2(2)(1) बनाम/ Madam Cama Road Mumbai Vs. Nariman Point Mumbai-400021 (अपीलार्थी / Appellant) (प्रत्यर्थी/ Respondent) स्र्थायी लेखा सुं./Pan No. Aaacs8577K

For Appellant: Shri P.J. Pardiwalla &For Respondent: Shri Anadi Varma, CIT-DR&
Section 143(3)Section 147

…आयकर अपीलीय अधिकरण “A” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI श्री महावीर स िंह, उपाध्यक्ष एविं श्री जी. मिंजुनाथ लेखा दस्य के मक्ष । BEFORE SRI MAHAVIR SINGH, VP AND SRI G MANJUNATHA, AM आयकर अपील सुं./ ITA No. 3644/Mum/2016 (ननर्ाारण वर्ा / Assessment Year 2008-09) State Bank of India The Dy. Commissioner of 3rd Floor, Corporate Centre Income Tax, Circle -2(2)(1) बनाम/ Madam Cama Road Mumbai Vs. Nariman Point Mumbai-400021 (अपीलार्थी / Appellant) (प्रत्यर्थी/ Respondent) स्र्थायी लेखा सुं./PAN No. AAACS8577K आयकर अपील सुं./ ITA No. 4563/Mum/2016 (ननर्ाारण वर्ा / Assessmen…

Nik-San Engineering Co. Ltd., Mumbai vs. The Dy. CIT, Circle - 2(1)(1), Baroda

In the result, appeal of the assessee in ITA No

ITA 2787/AHD/2017[2014-15]Status: DisposedITAT Ahmedabad20 Nov 2019AY 2014-15

Bench: Shri Mahavir Prasad & Shri Waseem Ahmed1. आयकर अपील सं./Ita No.2786/Ahd/2017 2. आयकर अपील सं./Ita No.2787/Ahd/2017 ("नधा"रण वष"/Assessment Years : 2013-14 & 2014-15 Res Pe Ctiv Ely) 1-2. Nik-San Engineering 1-2. The Dcit बनाम/ Co.Ltd. Cicle-2(1)(1) Vs. 201, 204, Vikas Chambers Aayakar Bhavan Jn. Of Link & Marve Road Baroda Malad West, Mumbai "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabcn 8963 D .. (अपीलाथ"/Appellant) (""यथ" / Respondent) अपीलाथ" ओर से/ Appellant By : Written Submission ""यथ" क" ओर से/Respondent By: Shri L.P. Jain, Sr.Dr

For Appellant: Written submissionFor Respondent: Shri L.P. Jain, Sr.DR
Section 139(1)

…se of Woolcombers of India Ltd. vs. Commissioner of Income-tax 134 ITR 219. It was further submitted that the view taken by the Calcultta High Court had found approval by the Supreme Court in East India Pharmaceutical Works Ltd. vs. Commissioner of Income-Tax 224 ITR 627 (S.C.).” ITA Nos.2786 & 2787/Ahd/2017 Nik-san Engineering Co.Ltd. vs. DCIT Asst.Years – 2013-14 & 2014-15 5. The Ld. Assessing Officer was not agreed with the contention of the assessee and made addition of Rs.33,37,941/- holding that assessee had diverted its business money for other than business purposes, therefore same are not allowable.…

Tata Capital Ltd, Mumbai vs. Asst CIT 2(3), Mumbai

The appeal of the revenue is dismissed

ITA 1175/MUM/2013[2009-10]Status: DisposedITAT Mumbai20 Sept 2019AY 2009-10

Bench: Mr. M. Balaganesh & Mr. Ravish Soodtata Capital Limited Asst. Commissioner Of One Forbes, Income Tax -2(3), Vs. Dr. V.B. Gandhi Marg, Fort, 552, 5Th Floor, Aayakar Bhavan, Mumbai – 1 Mumbai – 400 020 Pan – Aadcp9147P (Appellant) (Respondent) Dcit-2(3)(1), M/S Tata Capital Ltd. R. No. 552, 5Th Floor, 11Th Floor, Tower A, Aayakar Bhavan, M.K. Road, Peninsula Business Park, Vs. Mumbai – 400 020 Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400 013

For Appellant: Mr. Niraj Sheth, Mr. Jayesh Desai &For Respondent: Mr. R. Manjunatha Swamy &
Section 115JSection 143(1)Section 143(2)Section 143(3)Section 14A

…sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds available. In our opinion, the Supreme Court in East India Pharmaceutical Works Ltd. v. CIT (1997) 224 ITR 627 had the occasion to consider the decision of the Calcutta High Court in Woolcombers of India Ltd. (1982) 134 ITR 219 where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true character the taxes were paid out of the profits of the relevant year and not out of the overdraft…

M/S Suprajit Engineering Ltd, Bangalore vs. Assistant Commissioner of Income Tax Ltu, Bangalore

In the result, the assessee’s appeal is treated as allowed for statistical purposes

ITA 2143/BANG/2017[2009-10]Status: DisposedITAT Bangalore06 Sept 2019AY 2009-10

Bench: Shri A.K. Garodia & Shri Pavan Kumar Gadalem/S. Suprajit Engineering Ltd., No.100, Bommasandra Industrial Area, Bengaluru-560099. … Appellant Pan:Aadcs 1638L Vs. Asst. Commissioner Of Income-Tax, Ltu, Bengaluru. … Respondent Appellant By : Shri V.Srinivasan, Advocate. Respondent By : Shri M.Rajasekhar, Addl.Cit(Dr) Date Of Hearing: 18/07/2019 Date Of Pronouncement: 06/09/2019 O R D E R Per Pavan Kumar Gadale, Jm:

For Appellant: Shri V.Srinivasan, AdvocateFor Respondent: Shri M.Rajasekhar, Addl.CIT(DR)
Section 10(34)Section 14Section 143(2)Section 143(3)Section 14ASection 234

…sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds available. In our opinion, the Supreme Court in East India Pharmaceutical Works Ltd. v. CIT [1997] 224 ITR 627 had the occasion to consider the decision of the Calcutta High Court in Woolcombers of India Ltd. [1982) 134 ITR 219 where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true character the taxes were paid out of the profits of the relevant year and not out of the overdraft…

M/S. Gupta Bros. (India), New Delhi vs. ACIT, New Delhi

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

ITA 1111/DEL/2015[2011-12]Status: DisposedITAT Delhi20 Aug 2019AY 2011-12

Bench: Sh. H. S. Sidhudr. B. R. R. Kumarita No. 1110/Del/2015 : Asstt. Year : 2010-11 Ita No. 1111/Del/2015 : Asstt. Year : 2011-12 M/S Gupta Bros. (India), Vs Acit, 232, Jor Bagh, Circle-38(1), New Delhi-110003 New Delhi (Appellant) (Respondent) Pan No. Aaafg4325Q Assessee By : Sh. S. Krishna & V. Raj Kumar, Adv. Revenue By : Sh. Amit Katoch, Sr. Dr Date Of Hearing: 31.07.2019 Date Of Pronouncement: 20.08.2019 Order Per Dr. B. R. R. Kumar: Brief Facts Of The Case Are That The Assessee Is A Civil Construction Contractor Engaged In The Business Of Repairs Of Civil Works. During The Year The Assessee Has Incurred Labour Expenses Of Rs.11.39 Crores Against The Total Work Executed Of Rs.62.81 Crores. The Assessing Officer Held That The 18.14% Of The Labour Expenses Over The Turnover Is Far More Excessive Than The Labour Expenses In The Earlier Years Of 15.22% To 16.99%. He Further Held That The Labour Payments Been Made In The Months February & March Are To The Tune Of Rs.1.29 Crores & The Gross Turnover For The March Month Is Rs.9.97 Crores & The Percentage Of Labour Is About 13.26%. Based On Comparison Of The Payments Of The Ita Nos. 1110 & 1111/Del/2015 2 Gupta Bros. (India) Earlier Years, The Assessing Officer Has Disallowed Rs.25 Lacs On Account Of Labour Payment.

For Appellant: Sh. S. Krishna & V. Raj Kumar, AdvFor Respondent: Sh. Amit Katoch, Sr. DR

…he tax of the party which had been paid by assessee. In the case of Shree Saras Spices & Food P. Limited Vs. DCIT after due consideration of Bharat Commerce & Industries Ltd. v. CIT (198) 230 ITR 733 (SC) and East India Pharmaceutical Works Ltd. v. CIT (1997) 224 ITR 627 (SC)held that no deduction is allowable for the interest paid on late deposit of the TDS. The legislature does not envisage utilization of the tax deducted on behalf of the State to be utilized by the deductor for personal gains and pay interest on the same and then to claim deduction on such interest. Hence, we hereby uphold the disallowance mad…

M/S. Gupta Bros. (India), New Delhi vs. ACIT, New Delhi

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

ITA 1110/DEL/2015[2010-11]Status: DisposedITAT Delhi20 Aug 2019AY 2010-11

Bench: Sh. H. S. Sidhudr. B. R. R. Kumarita No. 1110/Del/2015 : Asstt. Year : 2010-11 Ita No. 1111/Del/2015 : Asstt. Year : 2011-12 M/S Gupta Bros. (India), Vs Acit, 232, Jor Bagh, Circle-38(1), New Delhi-110003 New Delhi (Appellant) (Respondent) Pan No. Aaafg4325Q Assessee By : Sh. S. Krishna & V. Raj Kumar, Adv. Revenue By : Sh. Amit Katoch, Sr. Dr Date Of Hearing: 31.07.2019 Date Of Pronouncement: 20.08.2019 Order Per Dr. B. R. R. Kumar: Brief Facts Of The Case Are That The Assessee Is A Civil Construction Contractor Engaged In The Business Of Repairs Of Civil Works. During The Year The Assessee Has Incurred Labour Expenses Of Rs.11.39 Crores Against The Total Work Executed Of Rs.62.81 Crores. The Assessing Officer Held That The 18.14% Of The Labour Expenses Over The Turnover Is Far More Excessive Than The Labour Expenses In The Earlier Years Of 15.22% To 16.99%. He Further Held That The Labour Payments Been Made In The Months February & March Are To The Tune Of Rs.1.29 Crores & The Gross Turnover For The March Month Is Rs.9.97 Crores & The Percentage Of Labour Is About 13.26%. Based On Comparison Of The Payments Of The Ita Nos. 1110 & 1111/Del/2015 2 Gupta Bros. (India) Earlier Years, The Assessing Officer Has Disallowed Rs.25 Lacs On Account Of Labour Payment.

For Appellant: Sh. S. Krishna & V. Raj Kumar, AdvFor Respondent: Sh. Amit Katoch, Sr. DR

…he tax of the party which had been paid by assessee. In the case of Shree Saras Spices & Food P. Limited Vs. DCIT after due consideration of Bharat Commerce & Industries Ltd. v. CIT (198) 230 ITR 733 (SC) and East India Pharmaceutical Works Ltd. v. CIT (1997) 224 ITR 627 (SC)held that no deduction is allowable for the interest paid on late deposit of the TDS. The legislature does not envisage utilization of the tax deducted on behalf of the State to be utilized by the deductor for personal gains and pay interest on the same and then to claim deduction on such interest. Hence, we hereby uphold the disallowance mad…

DCIT, New Delhi vs. M/S. Indus Towers Ltd., New Delhi

Appeal is allowed

ITA 2242/DEL/2014[2009-10]Status: DisposedITAT Delhi07 Jun 2019AY 2009-10

Bench: Shri G. D. Agrawal & Ms Suchitra Kamble

Section 133(6)Section 143(1)Section 143(2)Section 37(1)Section 44A

…DELHI BENCH: ‘C’ NEW DELHI BEFORE SHRI G. D. AGRAWAL, VICE PRESIDENT AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No.2242/DEL/2014 (A.Y 2009-10) DCIT Vs Indus Towers Ltd. Circle-11(1) Bharti Cresent-1 New Delhi Nelson Mandela Road, Vassant Kunj, Phase-2 New Delhi AABC17776B (APPELLANT) (RESPONDENT) I.T.A. No.1040/DEL/2014 (A.Y 2009-10) Indus Towers Ltd. Vs Addl. CIT(A) Building No. 10, Tower A, Range11 4th Floor, DLF Cyber City, Phase-II New Delhi Gurgaon AABC17776B (APPELLANT) (RESPONDENT) Appellant by Sh. Ajay Vohra, Sr. Adv Respondent by Sh. Ravi Sharma, Adv., Ms. Poonam Ahuja, CA Date of Hearing…