Marolia & Sons. v. CIT

129 ITR 475High Court1981#4451 most cited

What is Marolia & Sons. v. CIT authority for?

Interest on borrowed capital is not deductible if the capital is not utilized for the purposes of the assessee's business. This includes funds advanced to partners for personal use.

26

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2016 to 2026.

Also referred to as

Marolia & Sons v. CIT · section 36(1)(iii) · borrowed capital · business purposes · interest deduction · disallowance of interest · utilization of funds · partners' personal use

Sections most often in play

Section 153ASection 132Section 143(3)Section 147Section 148Section 132ASection 153DSection 47(xiiib)(f)

Issues it is cited on

section 55(2)section 139(9)section 49fresh tangible materialsection 55section 47going concernvaluation of sharesfull value of considerationtransfer of capital assetindexed cost of acquisitionnon application of mind

Judgments citing Marolia & Sons. v. CIT

M/S. Liberty Marketers, Ernakulam vs. The ACIT, Cochin

In the result, the appeals of the assessee are dismissed

ITA 85/COCH/2016[2010-11]Status: DisposedITAT Cochin30 Mar 2018AY 2010-11

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

Section 36(1)(iii)

…the decision of Madras High Court in the case of Milapchand R. Shah vs. CIT (58 ITR 525) and Roopchand Chanbildass & Sons vs. I.T.A. Nos. 409/C/2014 & 85&86/Coch/2016 CIT (63 ITR 166) and that of Allahabad High Court in the case of Marolia & Sons vs. CIT (129 ITR 475). Similar disallowance was made for the assessment year 2010-11 at Rs.24,37.980/- and for 2011-12 at Rs.27,93,606/-. 5. According to the CIT(A), if any amounts are used for non business purposes by the assessee, the same are to be disallowed u/s 36(1)(iii). Since in this case the three partners have made these drawings from the partnership fi…

M/S.Liberty Marketers, Ernakulam vs. The ACIT, Cochin

In the result, the appeals of the assessee are dismissed

ITA 409/COCH/2014[2009-10]Status: DisposedITAT Cochin30 Mar 2018AY 2009-10

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

Section 36(1)(iii)

…the decision of Madras High Court in the case of Milapchand R. Shah vs. CIT (58 ITR 525) and Roopchand Chanbildass & Sons vs. I.T.A. Nos. 409/C/2014 & 85&86/Coch/2016 CIT (63 ITR 166) and that of Allahabad High Court in the case of Marolia & Sons vs. CIT (129 ITR 475). Similar disallowance was made for the assessment year 2010-11 at Rs.24,37.980/- and for 2011-12 at Rs.27,93,606/-. 5. According to the CIT(A), if any amounts are used for non business purposes by the assessee, the same are to be disallowed u/s 36(1)(iii). Since in this case the three partners have made these drawings from the partnership fi…

Streamline Shipping Co. P. Ltd, Mumbai vs. DCIT 3(3), Mumbai

In the result, the appeal is partly allowed

ITA 855/MUM/2012[2007-08]Status: DisposedITAT Mumbai28 Apr 2017AY 2007-08

Bench: Shri Joginder Singh () & Shri N.K. Pradhan () Assessment Year: 2007-08

For Appellant: Shri M. Subramanian, ARFor Respondent: Shri Vishwas Mundhe, DR
Section 10(34)Section 143(3)Section 14ASection 271

…d for the purpose of business but for advancing money to Managing Director without interest. We may refer to the decision in Highways Construction Co. Pvt. Ltd. vs. CIT (Gau) 199 ITR 702, CIT vs. India Silk House (Mad) 152 ITR 79, Marolia & Sons vs. CIT (All) 129 ITR 475, Tirupati Trading Co vs. CIT (CL) 242 ITR 13, CIT vs. Sujanni Textiles (P) Ltd. (Mad) 225 ITR 560, CIT vs. H.R. Sugar Factory (P) Ltd. (All) 187 ITR 363, CIT vs. P. Ganu Rao and Sons (Mad) 185 ITR 324. The contention of the assessee that the total rate of interest including exchange fluctuations comes to 13% is to be verified. In view of the abov…

ITO, New Delhi vs. M/S. Multiplex Capital Ltd., New Delhi

In the result, the appeal of the Revenue stands dismissed on merits

ITA 6010/DEL/2013[2007-08]Status: DisposedITAT Delhi02 Mar 2016AY 2007-08

Bench: Shri Chandra Mohan Garg & Shri L.P. Sahu

For Appellant: Shri P. DAM Kanunjna, Sr. DRFor Respondent: Shri Ajay Wadhwa, Adv
Section 115JSection 271(1)(c)Section 275(1)(a)Section 88E

…er appealed against on any of the grounds decided against him. 10. The ld. AR has placed reliance on the following judgments for invoking the provisions of Rule 27 of the Rules: i) B.R. Bamasi Vs. CIT [972] 63 ITR 223 [Bom] ii) Marolia & Sons Vs. CIT [1981] 129 ITR 475 [All] iii) Assam Co. India Ltd Vs. CIT [2002] 256 ITR 423 [Raj] iv) Dahod Shahakari Kharib Bechan Sangh Vs. CIT [2005] 149 Taxman 456 [Guj] v) CIT Vs Cochin Refinery Ltd [1996] 220 ITR 398 [Ker] vi) ITO Vs. Smt. Gurinder Kaur 102 ITD 189 [Del-Trib] Firstly, we may point out that the ITAT Delhi in the case of ITO Vs. Smt. Gurinder Kaur after refe…

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)

…for the purpose of carrying on their business purpose, the same cannot be said to be given for the purposes of assessee's own business and the proportionate interest on such advancing of loan need to be disallowed. In the case of Marolia & Sons vs. CIT(1981) 129 ITR 475 (ALL), the Hon'ble Allahabad High Court relying heavily on the decisions of Milapchand R. Shah vs. CIT (1965) 58 ITR 525 (Mad) and Roopchand Chabildass & Sons vs. CIT (1967) 63 ITR 166 (Mad) has held that if the capital borrowed is not utilised for the purposes of the business, the assessee will not be entitled to deduction under this clause. In…

ITO, Bangalore vs. M/S Cerner Healthcare Solutions Pvt. Ltd., Bangalore

In the result, the appeal by the revenue is dismissed

ITA 675/BANG/2012[2007-08]Status: DisposedITAT Bangalore08 Jan 2016AY 2007-08

Bench: Shri N.V.Vasudevan & Shri Inturi Rama Rao

For Appellant: Dr. P.K.Srihari, Addl.CITFor Respondent: Shri Chavali S. Narayan, CA
Section 10ASection 10A(4)Section 80H

…earned counsel for the Assessee relied on the following decisions: i. CIT Vs. Sundaram and Co.Pvt.Ltd. 52 ITR 763 (Mad) ii. CIT Vs. Edward Keventer (successors)Pvt.Ltd. 123 ITR 200 (Del) iii. CIT Vs.Bhumraddi (T.M) 33 ITR 82 (Mum) iv. Marolia and sons Vs. CIT 129 ITR 475 (All) v. Dy.CIT Vs. Hind Industries Ltd. 14 DTR 561 (Del)(ITAT) IT(TP)A No.675/Bang/2012 M/s.Cerner Healthcare Solutions Pvt.Ltd. Page 11 of 18 vi. CIT Vs. Gilbert and Barker Manufacturing Co.USA 11 ITR 529 (Mum) vii. CIT Vs. Mahalakshmi Textile Mills Ltd. 66 ITR 710 (SC) viii. CIT Vs. Nelliappan 66 ITR 722 ix. ACIT Vs. M/S.Bank of Tokyo-Mitsubi…