Mir Mohd Ali v. CIT

38 ITR 413High Court1960#7439 most cited

What is Mir Mohd Ali v. CIT authority for?

It is for the assessee to prove that each of the loans on which interest was paid was utilized for their business.

15

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2017 to 2025.

Also referred to as

Mir Mohd Ali v. CIT · 38 ITR 413 · section 36(1)(iii) · interest on loans · business purpose · burden of proof · assessee to prove utilization

Sections most often in play

Section 142(1)Section 143(2)Section 143(3)Section 36(1)(iii)Section 127Section 132Section 132ASection 143(1)

Issues it is cited on

section 245c(1)section 36(1)(ii)tax recovery officersettlement applicationbogus share capitalincome tax settlement commissionsection 51interest free advancescolourable devicesection 36(1)(iii)block of assetsmistake apparent from record

Judgments citing Mir Mohd Ali v. CIT

Maa Mahamaya Industries Limited, Chhattisgarh vs. Deputy Commissioner of Income Tax, Central Circle-1, Visakhapatnam

In the result, appeal of the assessee is allowed

ITA 144/VIZ/2025[2012-13]Status: DisposedITAT Visakhapatnam13 May 2025AY 2012-13

Bench: Shri V. Durga Rao, Hon’Ble & Shri S Balakrishnan, Hon’Ble

For Appellant: Shri MV Prasad, CAFor Respondent: Dr Satyasai Rath, CIT(DR)
Section 127Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 153ASection 245C(1)Section 245D

…ing to Rs 13,98,37,651/-keeping in view of the fact that the assessee company had failed to prove that the diverted funds were brought back to the Business, keeping in view of the decision of Hon'ble Madras High Court in the case of Mir Mohd Ali Vs CIT (1960) 38 ITR 413 ( Mad), wherein it was held that it is for the assessee to prove that each of the loans on which he paid interest was utilized for his business. The Ld. CIT(A) ought to have appreciated the fact that the assessee- company never proved that all the term loans, which were siphoned off, were brought back and deployed in its business. 19. The Ld. CIT(…

Maa Mahamaya Industries Limited, Chhattisgarh vs. Deputy Commissioner of Income Tax, Central Circle-1, Visakhapatnam

In the result, appeal of the assessee is allowed

ITA 143/VIZ/2025[2011-12]Status: DisposedITAT Visakhapatnam13 May 2025AY 2011-12

Bench: Shri V. Durga Rao, Hon’Ble & Shri S Balakrishnan, Hon’Ble

For Appellant: Shri MV Prasad, CAFor Respondent: Dr Satyasai Rath, CIT(DR)
Section 127Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 153ASection 245C(1)Section 245D

…ing to Rs 13,98,37,651/-keeping in view of the fact that the assessee company had failed to prove that the diverted funds were brought back to the Business, keeping in view of the decision of Hon'ble Madras High Court in the case of Mir Mohd Ali Vs CIT (1960) 38 ITR 413 ( Mad), wherein it was held that it is for the assessee to prove that each of the loans on which he paid interest was utilized for his business. The Ld. CIT(A) ought to have appreciated the fact that the assessee- company never proved that all the term loans, which were siphoned off, were brought back and deployed in its business. 19. The Ld. CIT(…

Maa Mahamaya Industries Limited, Chhattisgarh vs. Deputy Commissioner of Income Tax, Central Circle-1, Visakhapatnam

In the result, appeal of the assessee is allowed

ITA 142/VIZ/2025[2010-11]Status: DisposedITAT Visakhapatnam13 May 2025AY 2010-11

Bench: Shri V. Durga Rao, Hon’Ble & Shri S Balakrishnan, Hon’Ble

For Appellant: Shri MV Prasad, CAFor Respondent: Dr Satyasai Rath, CIT(DR)
Section 127Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 153ASection 245C(1)Section 245D

…ing to Rs 13,98,37,651/-keeping in view of the fact that the assessee company had failed to prove that the diverted funds were brought back to the Business, keeping in view of the decision of Hon'ble Madras High Court in the case of Mir Mohd Ali Vs CIT (1960) 38 ITR 413 ( Mad), wherein it was held that it is for the assessee to prove that each of the loans on which he paid interest was utilized for his business. The Ld. CIT(A) ought to have appreciated the fact that the assessee- company never proved that all the term loans, which were siphoned off, were brought back and deployed in its business. 19. The Ld. CIT(…

Maa Mahamaya Industries Limited, Chhattisgarh vs. Deputy Commissioner of Income Tax, Central Circle-1, Visakhapatnam

In the result, appeal of the assessee is allowed

ITA 141/VIZ/2025[2009-10]Status: DisposedITAT Visakhapatnam13 May 2025AY 2009-10

Bench: Shri V. Durga Rao, Hon’Ble & Shri S Balakrishnan, Hon’Ble

For Appellant: Shri MV Prasad, CAFor Respondent: Dr Satyasai Rath, CIT(DR)
Section 127Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 153ASection 245C(1)Section 245D

…ing to Rs 13,98,37,651/-keeping in view of the fact that the assessee company had failed to prove that the diverted funds were brought back to the Business, keeping in view of the decision of Hon'ble Madras High Court in the case of Mir Mohd Ali Vs CIT (1960) 38 ITR 413 ( Mad), wherein it was held that it is for the assessee to prove that each of the loans on which he paid interest was utilized for his business. The Ld. CIT(A) ought to have appreciated the fact that the assessee- company never proved that all the term loans, which were siphoned off, were brought back and deployed in its business. 19. The Ld. CIT(…

Maa Mahamaya Industries Limited, Chhattisgarh vs. Deputy Commissioner of Income Tax, Central Circle-1, Visakhapatnam

In the result, appeal of the assessee is allowed

ITA 140/VIZ/2025[2008-09]Status: DisposedITAT Visakhapatnam13 May 2025AY 2008-09

Bench: Shri V. Durga Rao, Hon’Ble & Shri S Balakrishnan, Hon’Ble

For Appellant: Shri MV Prasad, CAFor Respondent: Dr Satyasai Rath, CIT(DR)
Section 127Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 153ASection 245C(1)Section 245D

…ing to Rs 13,98,37,651/-keeping in view of the fact that the assessee company had failed to prove that the diverted funds were brought back to the Business, keeping in view of the decision of Hon'ble Madras High Court in the case of Mir Mohd Ali Vs CIT (1960) 38 ITR 413 ( Mad), wherein it was held that it is for the assessee to prove that each of the loans on which he paid interest was utilized for his business. The Ld. CIT(A) ought to have appreciated the fact that the assessee- company never proved that all the term loans, which were siphoned off, were brought back and deployed in its business. 19. The Ld. CIT(…

Nayara Energy Limited (on Behalf of Merged Entity Vadinar Oil Terminal Limited ), Mumbai vs. Asstt CIT, Central Circle2(1), Mumbai

In the result appeal of the assessee is partly allowed for

ITA 778/MUM/2022[2017-18]Status: DisposedITAT Mumbai11 Sept 2024AY 2017-18

Bench: Shri Prashant Maharishi, Am & Rahul Chaudhary, Jm

Section 143Section 28Section 36Section 37

…o business expediency has been established by the assessee that warrants allowability of claim of excess interest expenditure on such intercorporate deposits more so as a business expenditure. He relied upon the decision of the honourable madras High Court in 38 ITR 413 wherein it is held that it is for the assessee to prove that each of the loans on which he paid the interest was utilised for the Page 51 of 66 ITA No 778/MUM/2022 Nayara Energy Limited [ On behalfof VadinarOil Terminal Limited] V ACIT Central Circle -2 (1), Mumbai AY 2017-18 purposes of his business. This decision has been affirmed by the honoura…

Diamonds 'R' Us, Mumbai vs. Deputy Commissioner of Income Tax - Central Circle 6(4), Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 539/MUM/2018[2014-15]Status: DisposedITAT Mumbai12 Oct 2022AY 2014-15

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 36Section 36(1)(iii)

…over, it is clear that the huge advances made are not for business purpose. It has been held in CIT vs. Sujani Textiles (P) Ltd., [1985] 151 ITR 653 (Mad.), CIT vs. Coimbatore Salem Transports (p) Ltd. [1966] 61 ITR 480 (Mad.) and Mr. Mohd. Ali vs. CIT [1960] 38 ITR 413 (Mad.) that it is for the assessee to prove that each of the loans on which he paid interest were utilized for business. In the case of S.A. Builders vs. CIT [2007] 158 Taxman 74 (SC), the Supreme Court has held that the presence of commercial expediency alone determines M/s. Diamonds ‘R' US allowability u/s. 36(1)(ii) of the Act. In respect of th…

Diamonds 'R' Us, Mumbai vs. Deputy Commissioner of Income Tax - Central Circle 6(4), Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 538/MUM/2018[2013-14]Status: DisposedITAT Mumbai12 Oct 2022AY 2013-14

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 36Section 36(1)(iii)

…over, it is clear that the huge advances made are not for business purpose. It has been held in CIT vs. Sujani Textiles (P) Ltd., [1985] 151 ITR 653 (Mad.), CIT vs. Coimbatore Salem Transports (p) Ltd. [1966] 61 ITR 480 (Mad.) and Mr. Mohd. Ali vs. CIT [1960] 38 ITR 413 (Mad.) that it is for the assessee to prove that each of the loans on which he paid interest were utilized for business. In the case of S.A. Builders vs. CIT [2007] 158 Taxman 74 (SC), the Supreme Court has held that the presence of commercial expediency alone determines M/s. Diamonds ‘R' US allowability u/s. 36(1)(ii) of the Act. In respect of th…

Diamonds 'R' Us, Mumbai vs. Deputy Commissioner of Income Tax - Central Circle 6(4), Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 537/MUM/2018[2012-13]Status: DisposedITAT Mumbai12 Oct 2022AY 2012-13

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 36Section 36(1)(iii)

…over, it is clear that the huge advances made are not for business purpose. It has been held in CIT vs. Sujani Textiles (P) Ltd., [1985] 151 ITR 653 (Mad.), CIT vs. Coimbatore Salem Transports (p) Ltd. [1966] 61 ITR 480 (Mad.) and Mr. Mohd. Ali vs. CIT [1960] 38 ITR 413 (Mad.) that it is for the assessee to prove that each of the loans on which he paid interest were utilized for business. In the case of S.A. Builders vs. CIT [2007] 158 Taxman 74 (SC), the Supreme Court has held that the presence of commercial expediency alone determines M/s. Diamonds ‘R' US allowability u/s. 36(1)(ii) of the Act. In respect of th…

Diamonds 'R' Us, Mumbai vs. Assistant Commissioner of Income Tax - Central Circle 6(4), Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 536/MUM/2018[2011-12]Status: DisposedITAT Mumbai12 Oct 2022AY 2011-12

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 36Section 36(1)(iii)

…over, it is clear that the huge advances made are not for business purpose. It has been held in CIT vs. Sujani Textiles (P) Ltd., [1985] 151 ITR 653 (Mad.), CIT vs. Coimbatore Salem Transports (p) Ltd. [1966] 61 ITR 480 (Mad.) and Mr. Mohd. Ali vs. CIT [1960] 38 ITR 413 (Mad.) that it is for the assessee to prove that each of the loans on which he paid interest were utilized for business. In the case of S.A. Builders vs. CIT [2007] 158 Taxman 74 (SC), the Supreme Court has held that the presence of commercial expediency alone determines M/s. Diamonds ‘R' US allowability u/s. 36(1)(ii) of the Act. In respect of th…

Nayara Energy Limited (on Behalf of Merged Entity Vadinar Oil Terminal Limited), Mumbai vs. Asstt. Commissioner of Income -Tax Central Circle 2(1), Mumbai

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

ITA 777/MUM/2022[2016-17]Status: DisposedITAT Mumbai10 Oct 2022AY 2016-17

Bench: Shri Pramod Kumar, Vp & Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T.A. No.777/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2016-17) Nayara Energy Ltd (On Acit, Central Circle-2(1) बिधम/ Behalf Of Merged Entity Room No. 804, Pratishtha Vs. Vadinar Oil Terminal Ltd) Bhavan, Old Cgo 5Th Floor, Jet Airways Annexe, M. K. Road, Godrej Bkc, G- Block, Plot Mumbai-400020. C-68, Bkc, Bandra (E), Mumbai-400051. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aabcv2626D (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Nitesh Joshi Revenue By: Dr. Mahesh Akhade (Dr) सुनवाई की तारीख / Date Of Hearing: 25/08/2022 घोषणा की तारीख /Date Of Pronouncement: 10/10/2022 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals)-48, Mumbai Dated 24.02.2022 For Assessment Year 2016-17. 2. The Grounds Of Appeal Preferred By Assessee Are As Under: - “Disallowance Of Interest Under Section 36(1) (Iii) Of The Income-Tax Act The Act - Rs.149.80 Crores 1. The Learned Assessing Officer (Ao) & Learned Cit(A) Erred In Disallowing Interest Of Rs.149.80 Crores Pertaining To Loans Of Rs.1253.53 Crores Granted To Related Parties Contending Them To Be Interest Free Without Appreciating The Fact, That Out Of The Total Amount, Only Security Deposits Of Rs.96.53 Crores Are Interest Free Refundable

For Appellant: Shri Nitesh JoshiFor Respondent: Dr. Mahesh Akhade (DR)
Section 14ASection 36(1)Section 37

…IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR, VP AND SHRI ABY T. VARKEY, JM आयकर अपील सं/ I.T.A. No.777/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2016-17) Nayara Energy Ltd (on ACIT, Central Circle-2(1) बिधम/ behalf of merged entity Room No. 804, Pratishtha Vs. Vadinar Oil Terminal Ltd) Bhavan, Old CGO 5th Floor, Jet Airways Annexe, M. K. Road, Godrej BKC, G- Block, Plot Mumbai-400020. C-68, BKC, Bandra (E), Mumbai-400051. स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No. : AABCV2626D (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee by: Shri Nitesh Joshi Revenue by: Dr. Mahes…

ACIT CC 39, Mumbai vs. Diamond 'R'Us, Mumbai

In the result, both the appeals filed by the Revenue stand dismissed while both the appeals filed by the assessee are statistically allowed

ITA 3490/MUM/2014[2010-11]Status: DisposedITAT Mumbai17 Nov 2017AY 2010-11

Bench: Shri P K Bansal & Shri Amarjit Singh

For Appellant: S/Shri Vijay Mehta & Sunil HirawatFor Respondent: Smt. S. Padmaja
Section 10ASection 250Section 36(1)

…the borrowed funds were utilized for the purpose of business, only then it is allowable as deduction u/s. 36(1)(iii). ITA No. 2365& 3490/Mum/2014 M/s. Diamonds "R" Us Further, the decision of Hon'ble Madras High Court in the case of Mir Mohammed Ali vs. CIT (38 ITR 413) has been confirmed by the Hon’ble Supreme Court reported in 52 ITR 165 by holding that the onus is on the assessee to prove that the borrowed funds were utilized for business purposes only. Even the decisions relied on by the AR of the appellant also confirm this issue that onus is on the assessee to prove that the borrowed funds were utilized wh…

Diamonds 'R' Us, Mumbai vs. DCIT Cen Cir 39, Mumbai

In the result, both the appeals filed by the Revenue stand dismissed while both the appeals filed by the assessee are statistically allowed

ITA 2365/MUM/2014[2010-11]Status: DisposedITAT Mumbai17 Nov 2017AY 2010-11

Bench: Shri P K Bansal & Shri Amarjit Singh

For Appellant: S/Shri Vijay Mehta & Sunil HirawatFor Respondent: Smt. S. Padmaja
Section 10ASection 250Section 36(1)

…the borrowed funds were utilized for the purpose of business, only then it is allowable as deduction u/s. 36(1)(iii). ITA No. 2365& 3490/Mum/2014 M/s. Diamonds "R" Us Further, the decision of Hon'ble Madras High Court in the case of Mir Mohammed Ali vs. CIT (38 ITR 413) has been confirmed by the Hon’ble Supreme Court reported in 52 ITR 165 by holding that the onus is on the assessee to prove that the borrowed funds were utilized for business purposes only. Even the decisions relied on by the AR of the appellant also confirm this issue that onus is on the assessee to prove that the borrowed funds were utilized wh…

JCIT (OSD) CC 39, Mumbai vs. Diamond 'R' Us, Mumbai

In the result, both the appeals filed by the Revenue stand dismissed while both the appeals filed by the assessee are statistically allowed

ITA 4935/MUM/2012[2009-10]Status: DisposedITAT Mumbai17 Nov 2017AY 2009-10

Bench: Shri P K Bansal & Shri Amarjit Singh

For Appellant: S/Shri Vijay Mehta & Sunil HirawatFor Respondent: Smt. S. Padmaja
Section 10ASection 250Section 36(1)

…the borrowed funds were utilized for the purpose of business, only then it is allowable as deduction u/s. 36(1)(iii). ITA No. 2365& 3490/Mum/2014 M/s. Diamonds "R" Us Further, the decision of Hon'ble Madras High Court in the case of Mir Mohammed Ali vs. CIT (38 ITR 413) has been confirmed by the Hon’ble Supreme Court reported in 52 ITR 165 by holding that the onus is on the assessee to prove that the borrowed funds were utilized for business purposes only. Even the decisions relied on by the AR of the appellant also confirm this issue that onus is on the assessee to prove that the borrowed funds were utilized wh…

Diamonds 'R' Us, Mumbai vs. Jt.C.I.T. (OSD) Central Circle 39, Mumbai

In the result, both the appeals filed by the Revenue stand dismissed while both the appeals filed by the assessee are statistically allowed

ITA 4583/MUM/2012[2009-10]Status: DisposedITAT Mumbai17 Nov 2017AY 2009-10

Bench: Shri P K Bansal & Shri Amarjit Singh

For Appellant: S/Shri Vijay Mehta & Sunil HirawatFor Respondent: Smt. S. Padmaja
Section 10ASection 250Section 36(1)

…the borrowed funds were utilized for the purpose of business, only then it is allowable as deduction u/s. 36(1)(iii). ITA No. 2365& 3490/Mum/2014 M/s. Diamonds "R" Us Further, the decision of Hon'ble Madras High Court in the case of Mir Mohammed Ali vs. CIT (38 ITR 413) has been confirmed by the Hon’ble Supreme Court reported in 52 ITR 165 by holding that the onus is on the assessee to prove that the borrowed funds were utilized for business purposes only. Even the decisions relied on by the AR of the appellant also confirm this issue that onus is on the assessee to prove that the borrowed funds were utilized wh…