How many judgments cite Munjal Sales Corporation v. CIT?

191 judgments on BharatTax cite Munjal Sales Corporation v. CIT (298 ITR 298), spanning 2010 to 2026.

Which sections of the Income Tax Act does Munjal Sales Corporation v. CIT come up under?

It is most often cited in judgments turning on Section 36(1)(iii), Section 143(3), Section 14A, Section 250, Section 32(1)(ii), Section 11.

Munjal Sales Corporation v. CIT

298 ITR 298Supreme Court of India2008#492 most cited

What is Munjal Sales Corporation v. CIT authority for?

The Supreme Court approves the mixed fund theory, holding that no interest disallowance is warranted under section 36(1)(iii) if investments or advances are made from the assessee's own non-interest bearing funds, even when mixed funds are available. This presumption applies when non-interest bearing funds are sufficient to meet the investments.

191

judgments rely on this decision, according to BharatTax’s citation analysis of 367,322 Indian tax judgments — from 2010 to 2026.

Also referred to as

Munjal Sales Corporation v CIT · 298 ITR 298 · Section 36(1)(iii) · disallowance of interest expenditure · mixed fund theory · interest free advances · non-interest bearing funds · business expediency · Section 14A disallowance · rule of consistency

Sections most often in play

Section 36(1)(iii)Section 143(3)Section 14A Section 250 Section 32(1)(ii)Section 11 Section 11(1)Section 11(1)(a)

Read the full judgment

Issues it is cited on

interest free advances section 36(1)(iii)business expediency disallowance of interest expenditure rule of consistency disallowance u/s 14a section 36 section 36(1)section 14a disallowance under section 14a double taxation section 37

Judgments citing Munjal Sales Corporation v. CIT

Income Tax Officer, Chennai vs. Avigna Private Limited, Chennai

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

ITA 2930/CHNY/2025[2023-24]Status: DisposedITAT Chennai13 Feb 2026AY 2023-24

Bench: Shri Aby T. Varkey & Ms. Padmavathy.Sआयकर अपील सं./Ita No.2930/Chny/2025 िनधा$रण वष$ /Assessment Year: 2023-24

For Appellant: Mr. M. Karunakaran, AdvocateFor Respondent: Ms. R. Anitha, Addl. CIT

Section 250Section 36(1)(iii)Section 40

…d funds for used for the purpose of core business activities of the appellant. Reliance is placed on the decisions of Hon’ble Supreme Court in the cases of S.A. Builders Vs. CIT (Appeals), Chandigarh (2007) 288 ITR 1(SC) and Munjal Sales Corpn. Vs. CIT (2008) 298 ITR 298 (SC). In view of the facts and circumstances as stated above, the impugned addition of Rs. 6,63,41,550/- made by the Ld. AO is here by directed to deleted. The grounds of appeal 2 to 31 are allowed” 4. With regard to expenses disallowance u/s. 40(a)(ia) of the Act by CIT(A) gave partial relief to the assessee. The revenue is in appeal against th…

Rituraj Steel Private Limited, Bilaspur vs. Assistant Commissioner of Income Tax Circle 2(1), Bilaspur

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

ITA 697/RPR/2025[2017-18]Status: DisposedITAT Raipur09 Feb 2026AY 2017-18

Bench: Shri Partha Sarathi Chaudhury, Jm & Shri Avdhesh Kumar Mishra, Am आयकर अपील सं. / Ita No: 697/Rpr/2025 (िनधा"रण वष" Assessment Year: 2017-18) Rituraj Steel Private Limited, M/S Vs Assistant Commissioner Of Income Rituraj Steel Private Limited, Hotel Tax, Circle 2(1), Bilaspur, East Park Agrasen Chowk, Shri Ram Plaza Vapar Vihar, Bilaspur, Chhattisgarh, 495001 Bilaspur, Chhattisgarh, 495001 Pan: Aaccr7589J (अपीलाथ"/Appellant) : (""थ" / Respondent) िनधा"रती की ओर से / Assessee By : None (Petition Filed) राज" की ओर से / Revenue By : Dr. Priyanka Patel, Sr. Dr सुनवाई की तारीख / Date Of Hearing : 05/02/2026 घोषणा की तारीख / Date Of : 09/02/2026 Pronouncement आदेश / O R D E R Per Avdhesh Kumar Mishra, Am: This Appeal For Assessment Year (‘Ay’) 2017-18 Filed By The Assessee Is Directed Against The Order Dated 29.10.2025 Of The Additional Commissioner Of Income Tax (Appeals), Mysore [‘Addl. Cit(A)’] Passed Under Section 250 Of The Income Tax Act, 1961 (‘Act’).

For Appellant: None (Petition filed)For Respondent: Dr. Priyanka Patel, Sr. DR

Section 250Section 36(1)(iii)

…like to mention that the issue of surplus fund available with the assessee given to its related parties have been decided by the Hon’ble Supreme Court in number of cases; such as, East India Pharmaceutical Works Ltd. 224 ITR 627 (SC), Munjal Sales Corporation 298 ITR 298 (SC), South Indian Bank Ltd. 438 ITR 1 (SC). The Hon’ble Supreme Court in the case of South Indian Bank Ltd. (supra) 3 Rituraj Steel Pvt Ltd. vs. ACIT(A), Bilaspur has approved the mixed fund theory in as much as it has been also held that no disallowance of the interest could be made when non-interest bearing fund should be more than the inve…

Shri Naval Kishore Singh, Jammu vs. Deputy Commissioner of Income Tax Circle-1, Jammu

In the result, the ground of appeal No

ITA 376/ASR/2023[2014-15]Status: DisposedITAT Amritsar15 Dec 2025AY 2014-15

Bench: Dr. M. L. Meena & Sh. Udayan Dasgupta

For Appellant: Sh. Joginder Singh, C. A

Section 144Section 250Section 44A

…9] where it has been held that on the face of factual findings that interest free funds are available to meet its investment it should be presumed that investment has been made out of interest free funds and also on the decision Munjal Sales Corporation v CIT 298 ITR 298 ( SC ) to submit that interest free advances will not call for disallowance if the same is met out of interest free Capital . He prayed for deletion of the addition. 22. The Ld. DR relied on the order of the CIT ( A ) and submitted that during the course of assessment there has not been any representation before the AO and as such it was not pos…

DCIT, C-V, Ludhiana vs. M/S Hero Cycles Ltd., Ludhiana

In the result, appeal of the Department is dismissed and the appeal of the assessee is allowed

ITA 588/CHANDI/2018[2012-13]Status: DisposedITAT Chandigarh08 Sept 2025AY 2012-13

Bench: SHRI. RAJPAL YADAV (Vice President), SHRI. KRINWANT SAHAY, AM आयकर अपील सं. / ITA No. 588/Chd/2018 निर्धारण वर्ष / Assessment Years : 2012-13 The DCIT C-V, Ludhiana बनाम M/s Hero Cycles Ltd. Hero Nagar, G.T. Road Ludhiana स्थायी लेखा सं./PAN NO: AAACH4073P अपीलार्थी/Appellant प्रत्यर्थी / Respondent आयकर अपील सं. / ITA No. 473/Chd/2018 निर्धारण वर्ष / Assessment Years : 2012-13 M/s Hero Cycles Ltd. Hero Nagar, G.T. Road Ludhiana बनाम The ACIT C-V, Ludhiana स्थायी लेखा सं./PAN NO: AAACH4073P

For Appellant: Shri Ashwani Kumar, Shri Ashish Aggarwal &For Respondent: Shri Manav Bansal, CIT, DR

Section 10(38)Section 143(1)Section 14ASection 36(1)(iii)

…law already filed before your Honour and further case law which is being filed now. The landmark judgments on this issue are Hero Cycles ltd. v/s CIT (2015) 379 ITR 347 (SC), S A Builders ltd. v/s CIT (2007) 288 ITR 1 (SC) and Munjal Sales Corp Vs. CIT(2008) 298 ITR 298 (SC). All this case law is directly on the issue of allowability of interest on loans given to a subsidiary company for business purposes. 2. There is a further disallowance of interest of Rs. 6,14,36,250/- on advance ofRs. 54.61 cr. to Hero Exports on page 39 of AO's order. It was submitted before the lower authorities that this advance to Hero…

DCIT Circle- 1, Ltu, New Delhi vs. Mawana Sugar Ltd., New Delhi

Appeal is partly allowed as above and the appeal of the Revenue is dismissed as above

ITA 5984/DEL/2019[2016-17]Status: DisposedITAT Delhi30 Apr 2025AY 2016-17

Bench: Shri Challa Nagendra Prasad & Shri Avdhesh Kumar Mishra

Section 115JSection 14ASection 36(1)(iii)

…R 795 799-800 (Mad) (iv) Radico Khaitan Ltd. 274 ITR 354 (All) (v) Britannia Industries Ltd. 280 ITR 525 (Cal) (vi) Reliance Utilities and Power Ltd. 313 ITR 340 (Bom) (vii) East India Pharmaceutical Works Ltd. 224 ITR 627 (SC) (viii) Munjal Sales Corporation 298 ITR 298 (SC) (ix) South Indian Bank Ltd. 438 ITR 1 (SC) 5.3 The Ld. AR contended that the Hon'ble Supreme Court in the cases of East India Pharmaceutical Works Ltd. (supra), Munjal Sales Corporation (supra) and South Indian Bank Ltd. (supra) had also approved the mixed fund theory, inasmuch as, in South Indian Bank Ltd. (supra), it had been held by the…

DCIT (Ltu), New Delhi vs. M/S. Mawana Sugar Ltd., New Delhi

In the result, all the appeals filed by the Revenue for AYs 2006-07, 2012-

ITA 6081/DEL/2016[2012-13]Status: DisposedITAT Delhi26 Mar 2025AY 2012-13

Bench: Shri Satbeer Singh Godara & Shris.Rifaur Rahman

For Appellant: Shri Taran Deep Singh, AdvocateFor Respondent: Ms. Baljeet Kaur, CIT DR

Section 2Section 2(47)Section 391

…pted to have been made out of non-interest-bearing funds then to that extend no disallowance of interest expense is called for. In support of this proposition Ld AR relied upon the decision of Hon’ble Apex Court in case of Munjal Sales Corporation reported in 298 ITR 298(SC), decision of Karnataka High Court in case of Sridev Enterprises reported in 192 ITR 165(Kar) and the decision of jurisdictional High Court in case of DD industries reported in 231 Taxman 784(Del).Carrying his arguments further it was then submitted by Ld AR that the findings of earlier years when loans were advanced or investments were made i…

Siel Ltd., New Delhi vs. DCIT, New Delhi

In the result, all the appeals filed by the Revenue for AYs 2006-07, 2012-

ITA 6301/DEL/2015[2011-12]Status: DisposedITAT Delhi26 Mar 2025AY 2011-12

Bench: Shri Satbeer Singh Godara & Shris.Rifaur Rahman

For Appellant: Shri Taran Deep Singh, AdvocateFor Respondent: Ms. Baljeet Kaur, CIT DR

Section 2Section 2(47)Section 391

Siel Ltd., New Delhi vs. DCIT, New Delhi

In the result, all the appeals filed by the Revenue for AYs 2006-07, 2012-

ITA 6300/DEL/2015[2003-04]Status: DisposedITAT Delhi26 Mar 2025AY 2003-04

Bench: Shri Satbeer Singh Godara & Shris.Rifaur Rahman

For Appellant: Shri Taran Deep Singh, AdvocateFor Respondent: Ms. Baljeet Kaur, CIT DR

Section 2Section 2(47)Section 391

DCIT, Circle-2(1)(1), Ahmedabad, Aaykar Bhawan Vejalpur vs. Sabarkantha District Co-Operative Milk Producers Union Limited, Boria, Himatnagar

Appeal is dismissed

ITA 1648/AHD/2024[2018-19]Status: DisposedITAT Ahmedabad19 Feb 2025AY 2018-19

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Vimal Desai, A.RFor Respondent: Shri R. N. Dsouza, CIT DR & B.P. Srivastava

Section 32Section 32(1)(ii)Section 80P(2)(d)

…een made out of own funds by the assessee. The Counsel for the assessee placed reliance on the decision of Mumbai High Court in the case of Reliance Utilities and Power Ltd. 313 ITR 340 and the decision of Supreme Court in the case of Munjal Sales Corporation 298 ITR 298. Further, the Counsel for the assessee submitted that this issue is covered in favour of the assessee by the decision of ITAT Ahmedabad in assessee's own case for A.Y. 2009-10 in ITA No. 2613/Ahd/2012 as well as in assessee's own case for A.Y. 2012-13 in ITA No. 1905/Ahd/2016. Further it was submitted that the above decisions were also affirmed b…

Deputy Commissioner of Income Tax Circle-2(1)(1) Ahmedabad, Aaykar Bhawan Vejalpur, Prahlad Nagar vs. Sabarkantha District Co-Operative Milk Poroducers Union Limited, Milk Producers Union

Appeal is dismissed

ITA 1589/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad19 Feb 2025AY 2017-18

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Vimal Desai, A.RFor Respondent: Shri R. N. Dsouza, CIT DR & B.P. Srivastava

Section 32Section 32(1)(ii)Section 80P(2)(d)

…een made out of own funds by the assessee. The Counsel for the assessee placed reliance on the decision of Mumbai High Court in the case of Reliance Utilities and Power Ltd. 313 ITR 340 and the decision of Supreme Court in the case of Munjal Sales Corporation 298 ITR 298. ITA No. 1588&1589/Ahd/2024 & 1648/Ahd/2024 DCIT vs. Sabarkantha District Co.op. Milk Producers Union Ltd. Asst. Years –2016-17, 2017-18 & 2018-19 - 6– Further, the Counsel for the assessee submitted that this issue is covered in favour of the assessee by the decision of ITAT Ahmedabad in assessee’s own case for A.Y. 2009-10 in ITA No. 2613/Ahd/2…

Deputy Commissioner of Income Tax, Circle-2(1)(1), Ahmedabad, Aaykar Bhawan Vejalpur vs. Sabarkantha District Co-Operative Milk Producers Union Limited, Milk Producers Union Limited

Appeal is dismissed

ITA 1588/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad19 Feb 2025AY 2016-17

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Vimal Desai, A.RFor Respondent: Shri R. N. Dsouza, CIT DR & B.P. Srivastava

Section 32Section 32(1)(ii)Section 80P(2)(d)

…een made out of own funds by the assessee. The Counsel for the assessee placed reliance on the decision of Mumbai High Court in the case of Reliance Utilities and Power Ltd. 313 ITR 340 and the decision of Supreme Court in the case of Munjal Sales Corporation 298 ITR 298. ITA No. 1588&1589/Ahd/2024 & 1648/Ahd/2024 DCIT vs. Sabarkantha District Co.op. Milk Producers Union Ltd. Asst. Years –2016-17, 2017-18 & 2018-19 - 6– Further, the Counsel for the assessee submitted that this issue is covered in favour of the assessee by the decision of ITAT Ahmedabad in assessee’s own case for A.Y. 2009-10 in ITA No. 2613/Ahd/2…

Sarbinder Singh Bindra, New Delhi vs. ACIT Circle-47(1), New Delhi

In the result, the appeal of the Assessee is partly allowed

ITA 7591/DEL/2019[2016-17]Status: DisposedITAT Delhi19 Feb 2025AY 2016-17

Bench: Shri Vikas Awasthy & Shri Manish Agarwalsarbinder Singh Bindra Asst. Cit, 362, 2Nd Floor, Circle-47(1), Naya Katra, Chandni Vs. Delhi. Chowk, Delhi-110006. Pan-Aaepb2783P (Appellant) (Respondent)

Section 154

…st free funds were sufficient to meet the investments, a presumption would arise that investments were out of interest free funds. Hon’ble Supreme Court in East India Pharmaceutical Works Ltd. vs. CIT (1997) 224 ITR 627, Munjal Sales Corporation v. CIT (2008) 298 ITR 298 and South India Bank Ltd. vs. CIT (2021) 438 ITR 1 has also approved the mixed fund theory, inasmuch, in South India Ltd. (supra), it has been held by the Apex Court that no disallowance of interest cannot be made where non-interest bearing funds are more than the investment made in tax free securities. 12. On the other hand, the Ld. SR. DR vehe…

Sri Srinivasa Trust, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(1), Bangalore

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

ITA 1076/BANG/2024[2021-2022]Status: DisposedITAT Bangalore18 Feb 2025AY 2021-2022

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Siva Prasad Reddy & Shri BalachandranFor Respondent: Ms. Nandini Das, CIT (DR)

Section 11Section 11(1)Section 11(1)(a)Section 12ASection 2(45)Section 80G

…jectives qualify as an application of income. Input Tax Credit Write-off (Rs. 12,44,081.00) 14.8 The assessee had to write off unutilized Input Tax Credit (ITC), which is a recognized accounting expense. The Supreme Court in CIT Vs. Munjal Showa Ltd. (2008) 298 ITR 298 (SC) has held that any write-off required due to legal and operational reasons must be considered a valid deduction. 14.9 In view of the above discussion and the judicial precedents relied upon, we hold that the expenses incurred by the assessee are incidental to the carrying out of its charitable objectives and qualify as an application of inco…

Sri Srinivasa Trust, Bangalore vs. Assistant Commissioner of Income Tax, Central Circle-2(1), Bangalore

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

ITA 1075/BANG/2024[2020-21]Status: DisposedITAT Bangalore18 Feb 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Siva Prasad Reddy & Shri BalachandranFor Respondent: Ms. Nandini Das, CIT (DR)

Section 11Section 11(1)Section 11(1)(a)Section 12ASection 2(45)Section 80G

Assistant Commissioner of Income Tax, Kolhapur vs. Mahalaxmi Infra Projects Pvt. Ltd., Kolhapur

In the result, the appeal of the Revenue is partly allowed for

ITA 979/PUN/2024[2018-19]Status: DisposedITAT Pune15 Jan 2025AY 2018-19

For Appellant: Shri Nikhil S. PathakFor Respondent: Shri Ramnath P. Murkunde

Section 143(3)Section 14ASection 80Section 801ASection 80I

…on of ITAT Pune in the case of ACIT Vs. M/s Gujrat Tea Traders Pvt. Ltd. (ITA No. 90/PN/2014) and in the case of S.M. Auto Engg. Pvt. Ltd. (ITA No. 2050 & 2051/PN/2013). The decision of the Hon'ble Supreme Court in the case of CIT Vs. Munjal Sales Corporation 298 ITR 298 (SC) was also brought to the attention to the Ld. AO wherein the Hon'ble Supreme Court held that if the assessee has huge interest free funds including the profit earned by the assessee during the year which is sufficient to cover the advancement of loan, then no interest should be disallowed. Reliance was further placed in the case of Ravindra R…

M/S. Deccan Charters Pvt Ltd., Bengaluru vs. Deputy Commissioner of Income Tax, Circle-2(1)(2), Bengaluru

In the result ground 4 of the revenue is dismissed

ITA 1349/BANG/2024[2018-19]Status: DisposedITAT Bangalore21 Oct 2024AY 2018-19

Bench: Shri George George K. (Vice President), Ms. Padmavathy S. (Accountant Member)

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Ms. Neha Sahay, JCIT-DR

Section 36Section 36(1)(iii)

…on'bie P & H High Court in Abhishek Industries Ltd., (supra) is concerned, this was followed by the very same High Court, while confirming a similar disallowance in the case of Munilal Sales Corpn. Vs CIT 298 ITP 288. Hon'ble Apex court reversed the latter in 298 ITR 298 and hence judgment in Abhishek Industries Ltd., will not further revenue's case any way. On the other hand, assessee is well supported by the decision of Hon'ble Mumbai High Court in the case of Reliance Utilities & Power Ltd., (supra) as well as Hon'ble Gujarat High Court in the case of Raghuvir Synthetics Ltd.,(supra). We thus. do not find any…

Chaphekar Suspensions Pvt.Ltd, Pune vs. Deputy Commissioner of Income Tax, Circle 1(1), Pune

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

ITA 793/PUN/2024[2022-23]Status: DisposedITAT Pune12 Sept 2024AY 2022-23

Bench: Shri R. K. Panda & Ms Astha Chandraassessment Year : 2022-23

For Appellant: Shri Sharad A VazeFor Respondent: Shri Ramnath P Murkunde

Section 143(1)Section 43B

…d that the borrowed funds have been used for the purposes of investments. The principle laid down in Abhishek Industries' case (supra) have not been approved by Hon'ble Supreme Court in a series of cases, including the case of Munjal Sales Corporation Vs CIT (298 ITR 298). There was no such disallowance in the earlier 6 years and the investments are old investments. In these circumstances, the assessee is quite justified in contending that no part of the interest paid on borrowings could be treated as having been used for the purposes of investments, and, accordingly, no disallowance under section 14 A can be ma…

M/S Stylam Industries Ltd., Chandigarh vs. DCIT, C-1(1), Chandigarh

In the result, the Department’s appeal in for assessment year

ITA 394/CHANDI/2019[2014-15]Status: DisposedITAT Chandigarh04 Sept 2024AY 2014-15

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Vineet Krishan, AdvocateFor Respondent: Shri Dharam Vir, JCIT, Sr.DR

Section 14ASection 195Section 40Section 40ASection 5(2)Section 6Section 9(1)

…d sufficient own funds and, therefore, the presumption is that the interest free advances were given out of the own funds of the assessee, for which, the disallowance made requires to be deleted. Reliance has been placed on “Munjal Sales Corporation Vs CIT” 298 ITR 298 (S.C.), “DCIT, Central Circle-2(1), Bangalore Vs JSR Construction P. Ltd.” 71 Taxman 184, “ACIT Vs Omaxe Bikes Ltd.” 156 ITD 566 (CHD). 25. The ld. DR, on the other hand, has placed strong reliance on the impugned order, stating that the ld. CIT(A) has correctly confirmed the disallowance in these three cases, since in the first transactio…

DCIT, C-1(1), Chandigarh vs. M/S Stylam Industries Ltd., Chandigarh

In the result, the Department’s appeal in for assessment year

ITA 389/CHANDI/2019[2014-15]Status: DisposedITAT Chandigarh04 Sept 2024AY 2014-15

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Vineet Krishan, AdvocateFor Respondent: Shri Dharam Vir, JCIT, Sr.DR

Section 14ASection 195Section 40Section 40ASection 5(2)Section 6Section 9(1)

M/S Stylam Industries Ltd., Chandigarh vs. DCIT, C-1(1), Chandigarh

In the result, the Department’s appeal in for assessment year

ITA 960/CHANDI/2017[2013-14]Status: DisposedITAT Chandigarh04 Sept 2024AY 2013-14

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Vineet Krishan, AdvocateFor Respondent: Shri Dharam Vir, JCIT, Sr.DR

Section 14ASection 195Section 40Section 40ASection 5(2)Section 6Section 9(1)