How many judgments cite Eastern Investments Ltd. v. CIT?

346 judgments on BharatTax cite Eastern Investments Ltd. v. CIT (38 ITR 601), spanning 2006 to 2026.

Which sections of the Income Tax Act does Eastern Investments Ltd. v. CIT come up under?

It is most often cited in judgments turning on Section 143(3), Section 147, Section 148, Section 14A, Section 37, Section 234B.

Eastern Investments Ltd. v. CIT

38 ITR 601Supreme Court of India1960#222 most cited

What is Eastern Investments Ltd. v. CIT authority for?

Expenditure must be commercially expedient for carrying on the business, and it is not for revenue authorities to dictate how an assessee should conduct its business. The court will not question the business expediency of a transaction, even if a third party also benefits.

346

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2006 to 2026.

Also referred to as

Eastern Investments Ltd. v. CIT · 38 ITR 601 · commercial expediency · business expediency · related party transaction · enduring benefit · business expenditure · prudent businessman · disallowance of interest expenditure

Sections most often in play

Section 143(3)Section 147 Section 148 Section 14A Section 37 Section 234B Section 40A(2)(b)Section 37(1)

Issues it is cited on

interest on interest accumulated profits section 40a(2)(b)commercial expediency related party transaction business expediency section 194j enduring benefit section 40a(2)section 14a(2)disallowance of interest expenditure section 36(1)(vii)

Judgments citing Eastern Investments Ltd. v. CIT

Ahlstrom Fiber Composites (I) P. Ltd., Mundra (Kutch) vs. The Asstt. Commr. of Income Tax, Gandhidham Circle, Gandhidham

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

ITA 287/RJT/2017[2013-14]Status: DisposedITAT Rajkot04 Aug 2023AY 2013-14

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyalit(Tp)A No.85& 287/Rjt/2017 Assessment Year :2012-13 & 2013-14

For Appellant: Shri S.N. Soparkar, ld.ARFor Respondent: Shri Shramdeep Sinha, ld.CIT-DR

Section 143(3)Section 144C(13)Section 92C

…RJT/2016 and 2 Others 17 required or not is a matter of business prudence. In this regard, he drew our attention to the following decisions: i) Atherton Vs. British Insulated & Helsby Cables Ltd., (1925) 10 TC 155; ii) Eastern Investments Ltd. Vs. CIT (1951) 20 ITR 1 (SC) iii) CIT Vs. Microsoft Corporation of India P.Ltd., (2008) 220 CTR 410 (Delhi); iv) Ravi Marketing P.Ltd. Vs. CIT (2006) 280 ITR 519 (Cal); v) Sassoon J. David & Co. P.Ltd. Vs. CIT (1979) 1 taxman 485 (SC); vi) Jamna Auto industries Vs. CIT, (2008) 167 TAXMAN 192 (P&H HC) Finally, he contended that the TPO had categorically held that no advers…

Ahlstrom Fibercomposites India Pvt. Ltd., Mundra (Kutch) vs. The Dy. Commr. of Income Tax, Gandhidham Circle, Gandhidham

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

ITA 97/RJT/2016[2011-12]Status: DisposedITAT Rajkot04 Aug 2023AY 2011-12

Bench: Smt.Annapurna Gupta & Shri Siddhartha Nautiyalit(Tp)A No.85& 287/Rjt/2017 Assessment Year :2012-13 & 2013-14

For Appellant: Shri S.N. Soparkar, ld.ARFor Respondent: Shri Shramdeep Sinha, ld.CIT-DR

Section 143(3)Section 144C(13)Section 92C

M/S. United Breweries Limited, Bangalore vs. Joint Commissioner of Income Tax, Special Range-7, Bangalore

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

ITA 2532/BANG/2019[2015-16]Status: DisposedITAT Bangalore19 May 2023AY 2015-16

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Ankur Pai for Shri K.R. VasudevanFor Respondent: Shri Sankar Ganesh K., D.R

Section 143(3)Section 144C(13)Section 14ASection 37Section 92C

…person or entity cannot be a bar for allowance of expenditure under section 37 of the Act, as per the settled position of law. Reference in this regard was made to the decisions of the Hon'ble Supreme Court of India in CIT vs. Chandulal Keshavlal & Co. [1960] 38 ITR 601 (SC), Sasson J. David and Co. P. Ltd vs. CIT 118 ITR 261(SC) and SA Builders Ltd. vs. CIT 288 ITR 1(SC). He further IT(TP)A No.2532/Bang/2019 United Brewries Ltd., Bangalore Page 45 of 70 submitted that the Revenue cannot step into the shoes of an assessee to determine the commercial expediency of an expenditure incurred by it. 90. On the other…

M/S Herbalife International India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-11(4), Bangalore

In the result, the appeal filed by the assessee stands allowed

ITA 440/BANG/2022[2017-18]Status: DisposedITAT Bangalore17 May 2023AY 2017-18

Bench: Smt. Beena Pillai & Ms. Padmavathy Sit(Tp)A No. 440/Bang/2022 Assessment Year : 2017-18 M/S. Herbalife International India The Deputy Pvt. Ltd., Commissioner Of Rmz Pinnacle, No. 15, Income Tax, Commissariat Road, Circle – 3(1)(1), Bengaluru – 560 025. Bangalore. Vs. Pan: Aaach8025R Appellant Respondent : Shri Percy Pardiwala, Assessee By Sr. Counsel Revenue By : Shri D.K. Mishra, Cit (Dr) Date Of Hearing : 28-03-2023 Date Of Pronouncement : 17-05-2023 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Final Assessment Order Dated 26.03.2022 Passed By The National Faceless Assessment Centre, Delhi On Following Grounds Of Appeal:

For Respondent: Shri Percy Pardiwala

…hire Brewery Ltd. vs. Bruce reported in 6 TC 399 (HL) d) Campa Beverages (P) Ltd. vs. IAC reported in 34 ITD 241 (ITAT Delhi) e) Star India (P) Ltd. vs. Addl. CIT reported in (2006) 103 ITD 73, 104 TTJ1 (ITAT Mumbai) f) CIT vs. Chandulal Keshavlal reported in 38 ITR 601 (SC) g) Maruti Country Auto Financial Services Pvt. Ltd. in ITA Nos. 2181 to 2183/Del/2010 h) Honda Siel Power Products Ltd. reported in TS-631-SC-2016- TP Page 20 IT(TP)A No. 440/Bang/2022 i) Mattel Toys (India) Pvt. Ltd. reported in TS-466-ITAT-2016 (Mum)-TP in ITA No. 4415/Mum/2014 j) Heinz India Pvt. Ltd. reported in TS-194-ITAT-2016 (Mum)-TP…

M/S. Tata Power Solar Systems Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 7(1)(1), Bangalore

In the result, the appeal of the assessee stands allowed

ITA 2396/BANG/2019[2004-05]Status: DisposedITAT Bangalore17 May 2023AY 2004-05

Bench: Shri George George K & Shri Laxmi Prasad Sahuassessment Year : 2004-05 M/S. Tata Power Solar Systems Limited, Acit, No.78, Hosur Road, Circle – 7(1)(1), Electronic City, Vs. Bengaluru. Bengaluru – 560 100. Pan : Aaact 4660 J Appellant Respondent Assessee By : Shri. Vikram Udupa, Advocate Revenue By : Shri. Sunil Kumar Singh, Cit-2(Dr)(Itat), Bengaluru Date Of Hearing : 08.05.2023 Date Of Pronouncement : 17.05.2023

For Appellant: Shri. Vikram Udupa, AdvocateFor Respondent: Shri. Sunil Kumar Singh, CIT-2(DR)(ITAT), Bengaluru

Section 143(3)Section 250Section 40Section 92C

…prudence. The Hon'ble Court held that it is well settled that the revenue cannot dictate to the assessee as to how he should conduct his business and it is not for them to tell the assessee as to what expenditure the assessee can incur (Eastern Investment Ltd 20 ITR 1 (SC), Walchand & Co 65 ITR 381 (SC) followed). Even Rule 10B(1)(a) does not authorise disallowance of expenditure on the ground that it was not necessary or prudent for the assessee to have incurred the same. In light of the aforesaid decisions, we are of the view that the stand taken by the assessee in this regard deserves Page 11 of 15 to be acce…

Kalburgi Cement Private Limited, Hyderabad vs. DCIT Circle -2(1), Hyderabad

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

ITA 573/HYD/2022[2018-19]Status: DisposedITAT Hyderabad15 May 2023AY 2018-19

Bench: Shri Rama Kanta Panda & Shri Laliet Kumar

For Appellant: Sri Kalyanasundaram, C.AFor Respondent: Sri Jeevan Lal Lavidiya

Section 142(1)Section 143(2)Section 143(3)Section 144BSection 263Section 270ASection 92C

…that the TPO cannot determine ALP at nil by holding that there was no need to incur such expenditure. While coming to this conclusion, the Hon'ble High Court has referred to the judgment of the Apex Court in the case of Eastern Investments Ltd. v. CIT [1957] 20 ITR 1 (SC) and CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 (SC). It has been held by the Hon'ble High Court that: 'It has been held by our courts that it is not for the revenue authorities to dictate to the assessee as to how he should conduct his business and it is not for them to tell the assessee as to what expenditure the assessee can incur. We ma…

Dhawani Nainesh Pastagia, Surat vs. Income Tax Officer Ward 1(3)(6), Surat

In the result, the appeal of the assessee is allowed

ITA 324/SRT/2022[2016-17]Status: DisposedITAT Surat28 Apr 2023AY 2016-17

Bench: Shri Pawan Singh(Physical Hearing) Dhwani Nainesh Pastagia, I.T.O., 55, Mitrali Co-Op Housing Society, Anand Ward-1(3)(6), Vs. Mahal Road, Adajan, Surat-395009. Surat. Pan No. Arzpp 3649 Q Appellant/ Assessee Respondent/ Revenue

Section 133(6)Section 254(1)

…n with procurement of business of providing loans. Commission was incurred wholly and exclusively for the purpose of business and fully deductible/allowable. To support her contention, the assessee relied on decision in CIT Vs Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC) on disallowance of employees cost. It was also stated that the assessee furnished complete details consisting name, PAN number and address alongwith the amount of sale deed. The Assessing Officer abruptly and without cogent reason, disallowed the expenses of Rs. 5,16,000/-. The 3 Dhwani Nainesh Pastagia Vs ITO expenses of employees cost/salar…

Asuda Holdings Private Limited, Mumbai vs. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 2854/MUM/2022[2014-2015]Status: DisposedITAT Mumbai03 Apr 2023AY 2014-2015

Bench: Shri Kuldip Singh, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 36(1)(iii)Section 50(1)Section 50(2)

…and in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case (Supra) has been approved by this Court in several decisions e.g. Eastern Investments Ltd. VS CIT(1951) 20 ITR 1, CIT Vs Chandulal Keshavlal & CO. (1960) 38 ITR 601 etc. b) The expression "commercial expediency" is an expression of wide import and Includes such expenditure as prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet is allowable as a business expenditure if it was incurred on grounds of commercial expediency. 12) Thu…

M/S. Rmz Hotels Private Limited, Bangalore vs. National E-Assessment Centre, Delhi

In the result, the appeal of the assessee is allowed

ITA 954/BANG/2022[2018-19]Status: DisposedITAT Bangalore22 Feb 2023AY 2018-19

Bench: Shri Chandra Poojariassessment Year: 2018-19

For Appellant: Shri V. Srinivasan, A.RFor Respondent: Shri Ganesh R. Ghale, Standing Counsel for Department

Section 234Section 255Section 255(3)Section 36

…d in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case (supra) has been approved by this Court in several decisions e.g. Eastern Investments Ltd. vs. CIT (1951) 20 ITR 1, CIT vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 etc. In our opinion, the High Court as well as the Tribunal and other Income Tax authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest free loan was given to the sister company (whic…

DCIT, Corporate Circle-1(1), Bhubaneswar vs. Gridco Limited, Bhubaneswar

In the result, appeal of the revenue stands dismissed

ITA 36/CTK/2018[2014-15]Status: DisposedITAT Cuttack20 Feb 2023AY 2014-15

Bench: Before S/Shri George Mathan, Judicial & Arun Khodpia & Arun Khodpia & Arun Khodpiaassessment Year : 2013-14 Assessment Year : 2014-15 Dcit, Dcit, Corporate Circle Corporate Circle - Vs. Grid Corporation Of O Grid Corporation Of Orissa 1(1), Bhubaneswar. 1(1), Bhubaneswar. Ltd., Ltd., Janapath, Janapath, Bhubanesw Bhubaneswar. Pan/Gir No. Pan/Gir No.Aabcg 5398 P (Appellant (Appellant) .. ( Respondent Respondent) Assessee By : S/Shri Ved Jain/P. Venugopal Rao, Ars Venugopal Rao, Ars Revenue By : Shri M.K.Gautam, M.K.Gautam, Cit Dr Date Of Hearing : 20/0 02/2023 Date Of Pronouncement : 20/0 /02/2023 O R D E R Per Bench

For Appellant: S/Shri Ved Jain/P. Venugopal Rao, ARsFor Respondent: Shri M.K.Gautam

…IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE BEFORE S/SHRI GEORGE MATHAN, JUDICIAL JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER Assessment Year : 2013-14 Assessment Year : 2014-15 DCIT, DCIT, Corporate Circle Corporate Circle - Vs. GRID Corporation of O GRID Corporation of Orissa 1(1), Bhubaneswar. 1(1), Bhubaneswar. Ltd., Ltd., Janapath, Janapath, Bhubanesw Bhubaneswar. PAN/GIR No. PAN/GIR No.AABCG 5398 P (Appellant (Appellant) .. ( Res…

DCIT, Corporate Circle-1(1), Bhubaneswar vs. M/S. Gridco Limited, Bhubaneswar

In the result, appeal of the revenue stands dismissed

ITA 346/CTK/2017[2013-14]Status: DisposedITAT Cuttack20 Feb 2023AY 2013-14

For Appellant: S/Shri Ved Jain/P. Venugopal Rao, ARsFor Respondent: Shri M.K.Gautam

Grameen Impact Investment India Pvt Ltd, Mumbai vs. National -E Assessment Centre, Delhi

In the result, all the three appeals of the assessee are allowed

ITA 2375/MUM/2022[2018-19]Status: DisposedITAT Mumbai29 Dec 2022AY 2018-19

Bench: Shri Aby T Varkey () & Shri Om Prakash Kant () Assessment Year: 2018-19 Grameen Impact Investments India National-E-Assessment Pvt. Ltd., Centre, 306, 3Rd Floor, A Wing, Devroop Vs. New Delhi-110 001. Building, 36, Turner Road, Bandra West, Mumbai-400050. Pan No. Aaacr 9005 R Appellant Respondent Assessee By : Mr. K. Shivaram & Mr. Shashi Bekal, Ars : Revenue By Mr. Satyapal Kumar, Dr Date Of Hearing : 19/12/2022 Assessment Year: 2015-16 & Assessment Year: 2016-17 Grameen Impact Investments India Dy. Cit-13(3)(1), Pvt. Ltd., Room No. 229, Aayakar 306, 3Rd Floor, A Wing, Devroop Vs. Bhavan, M.K. Road, Building, 36, Turner Road, Bandra Mumbai-400050. West, Mumbai-400050. Pan No. Aaacr 9005 R Appellant Respondent

For Appellant: Mr. K. Shivaram & Mr. Shashi

Section 56

…same person as well as related the company are the same person as well as related the company are the same person as well as related person. 7C. Regarding case law Eastern Investment Co. Ltd. v. Eastern Investment Co. Ltd. v. 7C. Regarding case law CIT[1951] 20 ITR 1 (SC) 20 ITR 1 (SC) The above-mentioned case law is not applicable in this mentioned case law is not applicable in this mentioned case law is not applicable in this case as the Hon'ble Supreme Court Judgement was on the case as the Hon'ble Supreme Court Judgement was on the case as the Hon'ble Supreme Court Judgement was on the issue regarding the a…

Thrivei Earthmovers Pvt. Ltd., Salem vs. ACIT, Central Circle (I/C), Salem

In the result, the appeal filed by the assessee is partly allowed

ITA 674/CHNY/2020[2013-14]Status: DisposedITAT Chennai23 Dec 2022AY 2013-14

For Appellant: Shri T. Banusekar, CAFor Respondent: Shri R. Mohan Reddy, CIT

Section 142(1)Section 143(3)Section 147Section 263

…transaction is properly entered into as a part of the assessee's legitimate commercial undertaking in order to facilitate the carrying on of its business ; and it is immaterial that a third party also benefits thereby — [Eastern Investments Ltd. v. CIT [1951] 20 ITR 1 (SC)]. But in every case it is a question of fact whether the expenditure was expended wholly and exclusively for the purpose of trade or business of the assessee." The issue in the present case is required to be adjudicated having regard to the principle enumerated in the above decisions. Admittedly, in the present case, the Assessing Officer had…

M/S Toyota Kirloskar Motors (P) Ltd, Bangalore vs. The Assistant Commissioner of Income Tax Ltu Circle-1, Bangalore

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

ITA 150/BANG/2017[2012-13]Status: DisposedITAT Bangalore02 Dec 2022AY 2012-13

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahu

For Appellant: Sri Padam Chand Khincha, A.RFor Respondent: Sri Sunil Kumar Singh, D.R

Section 40A(2)

Petronet Mhb Limited, Bangalore vs. The Income Tax Officer, Ward-5(1)(3), Bangalore

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

ITA 789/BANG/2022[2013-14]Status: DisposedITAT Bangalore28 Nov 2022AY 2013-14

Bench: Shri George George K. & Shri Laxmi Prasad Sahuassessment Year : 2013-14

For Appellant: Shri M.G Vinay Simha, C.AFor Respondent: Shri K.R Narayana, Addl. CIT (DR)

Section 143(3)Section 154Section 37(1)

…nd guidance from a passage from the judgment of the House of Lords in the case of Atheron v. British Insulated & Helsbey Cables Ltd. [1925] 10 Tax Cases 155, referred to with approval by the Supreme Court in the case of CIT v. Chandulal Keshavlal & Co. [1960] 38 ITR 601, which reads as follows : "It was made clear in the above cited cases of Usher's Wilshire Brewery v. Bruce (supra) and Smith v. Incorporated Council of Law Reporting [1914] 6 Tax Cases 477 that a sum of money expended not with a necessity and with a view to direct immediate benefit to the trade, but voluntarily and on the grounds of commercial exp…

M/S United Spirits Limited, Bangalore vs. Joint Commissioner of Income Tax Special Range-7, Bangalore

In the result, ground 7 is allowed for statistical purposes

ITA 3091/BANG/2018[2014-15]Status: DisposedITAT Bangalore22 Nov 2022AY 2014-15

Bench: Shri George George K, Jm & Shri Laxmi Prasad Sahu, Am It(Tp)A No.3091/Bang/2018 : Asst.Year 2014-2015 M/S.United Spirits Limited The Joint Commissioner Of 6Th Floor, Ub Towers, Income-Tax, Special Range-7 V. Bangalore. # 24 Vittal Mallya Road Bangalore – 560 001. Pan : Aaccm8043J. (Appellant) (Respondent)

For Appellant: Sri.Percy Pardiwala, Senior Counsel and Sri.Ankur Pai, AdvocateFor Respondent: Sri. Manjunath Karkihalli, CIT –DR

Section 115PSection 143(2)Section 143(3)Section 14ASection 234BSection 36(1)(iii)Section 92C

…person or entity cannot be a bar for allowance of expenditure under section 37 of the Act, as per the settled position of law. Reference in this regard was made to the decisions of the Hon'ble Supreme Court of India in CIT vs. Chandulal Keshavlal & Co. [1960] 38 ITR 601 (SC), Sasson J. David and Co. P. Ltd vs. CIT 118 ITR 261(SC) and SA Builders Ltd. vs. CIT 288 ITR 1(SC). He further submitted that the Revenue cannot step into the shoes of an assessee to determine the commercial expediency of an expenditure incurred by it. 32 IT(TP)A No.3091/Bang/2018 M/s.United Spirits Limited. 90. On the other hand, the learne…

M/S United Breweries Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

In the result, the appeal filed by the assessee is partly allowed

ITA 481/BANG/2018[2012-13]Status: DisposedITAT Bangalore11 Nov 2022AY 2012-13

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Sri.K.Sankar Ganesh, JCIT –DR

Section 115JSection 143(2)Section 143(3)Section 14ASection 40Section 43B

…person or entity cannot be a bar for allowance of expenditure under section 37 of the Act, as per the settled position of law. Reference in this regard was made to the decisions of the Hon'ble Supreme Court of India in CIT vs. Chandulal Keshavlal & Co. [1960] 38 ITR 601 (SC), Sasson J. David and Co. P. Ltd vs. CIT 118 ITR 261(SC) and SA Builders Ltd. vs. CIT 288 ITR 1(SC). He further submitted that the Revenue cannot step into the shoes of an assessee to determine the commercial expediency of an expenditure incurred by it. 90. On the other hand, the learned DR relied upon the order of the AO and the DRP in suppor…

M/S Avantika Infraventure (P) Ltd., Allahabad vs. DCIT, Central Circle, Varanasi

In the result, the appeals of the assessee for the Assessment Years

ITA 23/VNS/2020[2013-2014]Status: DisposedITAT Varanasi13 Oct 2022AY 2013-2014

Bench: Shri.Vijay Pal Rao & Shri Ramit Kochar

For Appellant: NoneFor Respondent: Sh. R.K. Vishwakarma, CIT DR

Section 153ASection 234ASection 36

…d in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case (supra) has been approved by this Court in several decisions e.g. Eastern Investments Ltd. vs. CIT (1951) 20 ITR 1, CIT vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 etc. 24. In our opinion, the High Court as well as the Tribunal and other Income Tax authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest free loan was given to the sister company (…

M/S Avantika Infraventure (P) Ltd., Allahabad vs. DCIT, Central Circle, Varanasi

In the result, the appeals of the assessee for the Assessment Years

ITA 22/VNS/2020[2012-2013]Status: DisposedITAT Varanasi13 Oct 2022AY 2012-2013

Bench: Shri.Vijay Pal Rao & Shri Ramit Kochar

For Appellant: NoneFor Respondent: Sh. R.K. Vishwakarma, CIT DR

Section 153ASection 234ASection 36

…d in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case (supra) has been approved by this Court in several decisions e.g. Eastern Investments Ltd. vs. CIT (1951) 20 ITR 1, CIT vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 etc. 24. In our opinion, the High Court as well as the Tribunal and other Income Tax authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest free loan was given to the sister company (…

Sri K Chandrashekar Praskash vs. The Assistant Commissioner of Income Tax

Appeal is allowed

ITA/5/2019HC Karnataka10 Oct 2022

Bench: P.S.DINESH KUMAR,C.M. POONACHA

Section 260

…IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF OCTOBER, 2022 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON’BLE MR. JUSTICE C.M. POONACHA ITA No.5 OF 2019 BETWEEN SRI K CHANDRASHEKAR PRASKASH #1233, FLAT NO.403, 1ST MAIN, MC LAYOUT, VIJAY NAGAR, BENGALURU 560 040 PAN:AHEPP6124H ...APPELLANT (BY SRI ANNAMALAI S, ADVOCATE) AND THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-6(2)(1), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 080. …RESPONDENT (BY SRI DILIP M, ADVOCATE FOR SRI ARAVIND K V, ADVOCATE) THIS INCOME TAX APPEAL UN…