Elmer Havell Electrics and Ors. v. Commissioner of Income-Tax and Anr.

277 ITR 549High Court2005#8937 most cited

What is Elmer Havell Electrics and Ors. v. Commissioner of Income-Tax and Anr. authority for?

Interest paid on borrowed funds is disallowed to the extent these funds are advanced interest-free to sister concerns or used for non-business purposes. This is because the borrowed funds are not being used for the purpose of the assessee's business.

12

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2010 to 2025.

Also referred to as

Elmer Havell Electrics v. CIT · Section 36(1)(iii) · interest on borrowed funds · interest-free advances · sister concern · disallowance of interest · non-business purpose · commercial expediency

Sections most often in play

Section 143(3)Section 143(3A)Section 143(3B)Section 246ASection 250Section 253Section 36(1)(iii)Section 801A(iv)

Judgments citing Elmer Havell Electrics and Ors. v. Commissioner of Income-Tax and Anr.

Bansal Pathways Damoh Katni P Ltd, Bhopal vs. DCIT 1(1), Bhoopal

The appeal of the assesse is allowed for statistical purpose

ITA 851/IND/2024[2018-19]Status: DisposedITAT Indore10 Nov 2025AY 2018-19

Bench: Shri B.M. Biyani & Shri Paresh M Joshibansal Pathways Damoh Dcit-1(1), बनाम Katni Private Limited, Bhopal / 15Th Floor Bansal One, Vs. Rani Kamlapati Railway Station, Bhopal

Section 143(3)Section 250Section 253

…s Ltd. vs. CIT [2004] 265 ITR 250 (Raj.) 5. Caldern Pharmaceuticals Pvt. Ltd. vs. CIT [2004] 265 ITR 244 (Kal.) 6. CIT vs. Bombay Samachar Ltd. [1969] 74 ITR 723 (Bom.) 7. Somasundram & Bro. [1999] 238 ITR 939 (Madras) 8. Elmer Havell Electrics vs. CIT [2005] 277 ITR 549 (Del.) 9. Since, the assessee had diverted its borrowed fund to its prompter company without charging any interest & Section 36(1)(iii) allows the deduction of the amount of interest paid in respect of capital borrowed for the purpose of business but herein this case, the money given to promoter company has not been given for business purposes. T…

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

…pressed by Bombay High Court in Phaltan Sugar Works Ltd. v. Commissioner of Wealth Tax, and Phaltan Sugar Works Ltd. v. Commissioner of Income-Tax 215 ITR 582 (Bom). 14.10 In the case of Elmer Havell Electrics and Ors. v. Commissioner of Income-Tax and Anr. 277 ITR 549, the Delhi High Court, while rejecting the appeal of the assessee on the issue of disallowance of interest on interest free advances made to sister concern, observed that the assessee itself had taken loan with interest and had advanced funds by diversion or otherwise to its sister concern free of interest. Taking this and other findings by the T…

Guardian Nutrition & Health Supplements Pvt. Ltd., New Delhi vs. DCIT, Circle- 10(2), New Delhi

Appeal of the assessee is dismissed

ITA 6738/DEL/2017[2012-13]Status: DisposedITAT Delhi21 Nov 2022AY 2012-13

Bench: Shri Narendra Kumar Billaiya & Shri Kul Bharat[Assessment Year: 2012-13

Section 143(3)Section 36(1)(iii)Section 40

…specific findings recorded by the authorities. 5.2.10 However, while the law laid down by the courts leads to the principles to be followed, the matter is essentially factual. Indeed the Hon’ble Delhi HC has said in the cases of Elmer Havell Electrics vs. CIT 277 ITR 549 9Del.) and Tin box Co. 260 ITR 637 9Del.) has said that; 13 Whether there existed any commercial expediency for the assessee to transfer the said amount to one of its sister concerns or not was primarily a question of fact. The contention that the funds were advanced from self-generated funds of the assessee and that there was a need for that pu…

ACIT 2(3), Mumbai vs. Tata Ralty & Infrastructure Ltd, Mumbai

The appeal of the assessee is allowed, and appeal of the Assessing Officer is dismissed

ITA 3929/MUM/2013[2008-09]Status: DisposedITAT Mumbai26 Jun 2020AY 2008-09

Bench: Shri C. N. Prasad, Jm& Shri S. Rifaur Rahman, Am आयकरअपीलसं./ I.T.A. No. 3929/Mum/2013 (निर्धारणवर्ा / Assessment Year: 2008-09)

For Appellant: Shri R. Manjunatha SwamyFor Respondent: Ms. Aarti Vissanji, AR
Section 143(3)Section 271(1)(c)

…ligence report and it is not believable and not the action of prudent businessman, therefore he supported the order of AO and also relied on following judgments :- i) Rajasthan Art Emporium Vs. DCIT 82 taxman.com 127 (Raj) ii) Elmer Hawell Electrics Vs. CIT 277 ITR 549(Delhi) 6. On the other hand, Ld. AR submitted that it is genuine transaction and initially the MOU entered into by the assessee clearly indicates that assessee intended to buy substantial land and the funds were transferred to them with a clear condition that it has to possess due diligence certificate and in case of failure, it will be charged…

Diamond Textiles Mills Pvt. Ltd., Ahmedabad vs. ITO, Ward-1(1)(4), Ahmedabad

In the result, appeal filed by the Assessee is allowed

ITA 346/AHD/2018[2014-15]Status: DisposedITAT Ahmedabad10 Dec 2019AY 2014-15

Bench: Shri Mahavir Prasad & Shri Waseem Ahmed)

For Appellant: Ms. Arti N. Shah, C.AFor Respondent: Shri Uma Prasad, Sr. D.R
Section 36

…Ltd. vs. CIT [2004] 265 ITR 250 (Raj.) 5. Caldern Pharmaceutical Pvt. Ltd. vs. CIT [2004] 265 ITR 244 (Kal.) 6. CIT vs. Bombay Samachar Ltd. [1969] 74 ITR 723 (Bom.) 7. K. Somasundram & Bro. [1999] 238 ITR 939 (Madras) 8. Elmer Havell Electrics vs. CIT [2005] 277 ITR 549 (Del.) Thus, the contentions of the assessee lacks merit and could not be substantiated. 5.5 In view of the above narrated facts and the judicial pronouncements, the claim of the assessee in respect of interest is not allowed. Since the assessee has been paying interest @ 12% on loans accepted. Therefore, interest expenses in proportion to the f…

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

…81 (All), Phaltan Sugar Works Ltd. vs. CIT (1995) 127 CTR (Bom) 359 : (1994) 208 ITR 989 (Bom), Phaltan Sugar Works Ltd. vs. CIT (1994) 122 CTR (Bom) 344: (1995) 215 ITR 582 (Bom), Elmer Havell Electrics & Ors. vs. CIT & Anr. (2005) 197 CTR (Del) 316 : (2005) 277 ITR 549 (Del) and C1T vs. Sujanni Textiles (P) Ltd. (1998) 147 CTR (Mad) 417: (1997) 225 ITR 560 (Mad) relied on; Veecumsees vs. CIT (1996) 133 CTR (SC) 500 : (1996) 9 SCC 25 distinguished; CIT vs. Orissa Cement Ltd. (2001) 252 ITR 878 (Del), CIT vs. Tin Box Co. (2003) 182 CTR (Del) 171 : (2003) 260 ITR 637 (Del), CIT vs. Radico Khaitan Ltd. (2005) 194 C…

DCIT (Ltu), New Delhi vs. M/S. Hero Motors Ltd., New Delhi

The appeal is dismissed

ITA 4316/DEL/2014[2010-11]Status: DisposedITAT Delhi15 May 2017AY 2010-11

Bench: Shri N. K. Saini & Ms Suchitra Kamble

Section 14A

…1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘C’ NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A .No.4316/DEL/2014 (ASSESSMENT YEAR-2010-11) DCIT (LTU) Vs Hero Motors Ltd. NBCC, Plaza, Pushp Vihar, 603, International Trade Sector-III Tower, Nehru Place New Delhi New Delhi AAACH8459F (APPELLANT) (RESPONDENT) Appellant by Sh. Ravi Jain, CIT DR Respondent by Sh. Sumit Kumar Bansal, FCA Date of Hearing 09.05.2017 Date of Pronouncement 15.05.2017 ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the respondent against the order dated 30/5/2014…

J.C.I.T Range - 56, Kolkata vs. M/S Arti Bright Company., Kolkata

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

ITA 1933/KOL/2012[2008-2009]Status: DisposedITAT Kolkata11 Jan 2017AY 2008-2009

Bench: Shri Waseem Ahmed & Shri S.S.Viswanethra Ravi

Section 143(2)Section 143(3)Section 154

…was also not considered by the CIT(A) while deleting such addition, his order is liable to be set aside and that of the AO be restored. 8. The Hon'ble High Court of Delhi in the case of Elmer Havell Electrics v. Commissioner of Income-tax reported in [2005] 277 ITR 549 (Delhi)/[2005] 197 CTR 316 (Delhi) [2005] 148 TAXMAN 57 (Delhi) has held that where assessee had borrowed interest bearing loans from market and at same time it advanced interest-free loan to its sister concern, Assessing Officer was justified in making an addition to extent of proportionate interest chargeable from sister concern. It observed as…

E-City Investments & Holdings Co. Pvt. Ltd., Mumbai vs. D.C.I.T. RG. 8(1) (OSD), Mumbai

The appeal of the assessee is allowed

ITA 8382/MUM/2011[2008-09]Status: DisposedITAT Mumbai03 Feb 2016AY 2008-09

Bench: Shri Joginder Singh & Shri Ashwani Tanejaassessment Year: 2008-09 E-City Investments & Holdings Dcit, Company Private Limited, Range-8(1)(Osd), बनाम/ 844/4, Shah Industrial Estate, Aayakar Bhavan, Vs. Off. New Link Road, Opp. M.K. Road, Laxmi Industrial Estate, Mumbai-400020 Andheri (West), Mumbai-400053 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No.Aaace8030F "नधा"रती क" ओर से / Assessee By Shri Vijay Mehta राज"व क" ओर से / Revenue By Mr.J. Saravanan -Dr

Section 143(3)Section 36(1)(iii)

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ, ई,मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “E”, MUMBAI "ी जो"ग"दर "संह, "या"यक सद"य एवं "ी अ"नी तनेजा, लेखा सद"य, के सम" Before Shri Joginder Singh, Judicial Member, and Shri Ashwani Taneja, Accountant Member Assessment Year: 2008-09 E-City Investments & Holdings DCIT, Company Private Limited, Range-8(1)(OSD), बनाम/ 844/4, Shah Industrial Estate, Aayakar Bhavan, Vs. Off. New Link Road, Opp. M.K. Road, Laxmi Industrial Estate, Mumbai-400020 Andheri (West), Mumbai-400053 ("नधा"रती /Assessee) (राज"व /Revenue) PAN. No.AAACE8030F "नधा"रती क" ओर से / Assessee by Shr…

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

…essed by Bombay High Court in Phaltan Sugar Works Ltd. v. Commissioner of Wealth Tax, and Phaltan Sugar Works Ltd. v. Commissioner of Income-Tax 215 ITR 582 (Bom). 14.10 In the case of Elmer Havell Electrics and Ors. v. Commissioner of Income-Tax and Anr. 277 ITR 549, the Delhi High Court, while rejecting the appeal of the assessee on the issue of disallowance of interest on interest free advances made to sister concern, observed that the assessee itself had taken loan with interest and had advanced funds by diversion or otherwise to its sister concern free of interest. Taking this and other findings by t…

The Commissioner of Income Tax vs. M/S Gautam Motors

ITA/496/2006HC Delhi19 Jul 2010

Bench: The Commissioner Of Income Tax (Appeals) Which Was Partly Allowed. Not Fully Satisfied With The Decision Of The Cit(A), The Assessee Approached The Income Tax Appellate Tribunal. The Department Also Filed Cross-Appeal Against The Order Of The Cit(A) Challenging The Additions Which Were Deleted

Section 260A

…ITA No. 496 of 2006 Page 1 of 19 REPORTABLE * IN THE HIGH COURT OF DELHI AT NEW DELHI ITA No. 496 of 2006 % Date of Decision: 19th July, 2010. The Commissioner of Income Tax, Delhi-IV CR Building, New Delhi . . . Appellant through : Ms. Prem Lata Bansal with Mr. Shashi Prabhakar, Advocates VERSUS M/s GAUTAM MOTORS, B-81, G.T. KARNAL ROAD, DELHI . . .Respondent through: Mr. Ajay Vohra with Ms. Kavita Jha, Ms. Akanksha Aggarwal and Mr. Somnath Shukla, Advocates. CORAM :-…

Punjab Stainless Steel Industries vs. Commissioner of Income Tax Delhi VII & Anr

ITA/47/2008HC Delhi14 May 2010

Bench: HON'BLE MR. JUSTICE BADAR DURREZ AHMED,HON'BLE MR. JUSTICE V.K. JAIN

For Appellant: Mr Satyen Sethi, Mr Johnson Bara & Mr A T PandaFor Respondent: Ms Prem Lata Bansal

…ITA No.47/2008 Page 1 of 18 THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Reserved on: 04.05.2010 Judgment Delivered on: 14.05.2010 + ITA 47/2008 M/S PUNJAB STAINLESS STEEL INDS. … Appellant - versus - COMMISSIONER OF INCOME TAX-VII & ANR. .... Respondents Advocates who appeared in this case: For the Appellant : Mr Satyen Sethi, Mr Johnson Bara & Mr A T Panda For the Respondent : Ms Prem Lata Bansal CORAM:- HON’BLE MR JUSTICE BADAR DURREZ AHMED HON’BLE MR JUSTICE V.K. JAIN 1. Whether Reporters of lo…