P.R.M.S Ramanathan Chettiar v. CIT

72 ITR 534High Court1969#7496 most cited

What is P.R.M.S Ramanathan Chettiar v. CIT authority for?

Interest on borrowed capital is allowable only if the capital was borrowed and used exclusively for the purpose of business. If borrowed capital is used for a purpose other than business, the interest to that extent will not be allowed.

15

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2017 to 2022.

Also referred to as

P.R.M.S Ramanathan Chettiar v. CIT · section 36(1)(iii) · borrowed capital · business purpose · interest allowance · commercial expediency · diversion of funds

Issues it is cited on

tax recovery officersection 36(1)(ii)section 51interest free advancesmistake apparent from recordsection 10aacomputer softwaresection 10asection 36(1)(iii)commercial expediencysection 36(1)section 36

Judgments citing P.R.M.S Ramanathan Chettiar v. CIT

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)

…interest on borrowed capital under section 36 (1)(iii) will be allowed only if capital borrowed has been exclusively used for the purpose of business. He placed reliance on the judgements of hon'ble Madras High Court in the case of P.R.M.S Ramanathan Chettiar 72 ITR 534 and in the case of K Somasundaram and bros vs. CIT 238 ITR 939 and CIT vs. Abhishek industries Ltd 156 taxman 257(P & H). He also observed that the assessee has not stated what was the reason to divert the partners capital and realisation from sundry debtors as interest free loan to Shri Nirav Modi. The AO analysed the rates of interest of various…

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)

…interest on borrowed capital under section 36 (1)(iii) will be allowed only if capital borrowed has been exclusively used for the purpose of business. He placed reliance on the judgements of hon'ble Madras High Court in the case of P.R.M.S Ramanathan Chettiar 72 ITR 534 and in the case of K Somasundaram and bros vs. CIT 238 ITR 939 and CIT vs. Abhishek industries Ltd 156 taxman 257(P & H). He also observed that the assessee has not stated what was the reason to divert the partners capital and realisation from sundry debtors as interest free loan to Shri Nirav Modi. The AO analysed the rates of interest of various…

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)

…interest on borrowed capital under section 36 (1)(iii) will be allowed only if capital borrowed has been exclusively used for the purpose of business. He placed reliance on the judgements of hon'ble Madras High Court in the case of P.R.M.S Ramanathan Chettiar 72 ITR 534 and in the case of K Somasundaram and bros vs. CIT 238 ITR 939 and CIT vs. Abhishek industries Ltd 156 taxman 257(P & H). He also observed that the assessee has not stated what was the reason to divert the partners capital and realisation from sundry debtors as interest free loan to Shri Nirav Modi. The AO analysed the rates of interest of various…

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)

…interest on borrowed capital under section 36 (1)(iii) will be allowed only if capital borrowed has been exclusively used for the purpose of business. He placed reliance on the judgements of hon'ble Madras High Court in the case of P.R.M.S Ramanathan Chettiar 72 ITR 534 and in the case of K Somasundaram and bros vs. CIT 238 ITR 939 and CIT vs. Abhishek industries Ltd 156 taxman 257(P & H). He also observed that the assessee has not stated what was the reason to divert the partners capital and realisation from sundry debtors as interest free loan to Shri Nirav Modi. The AO analysed the rates of interest of various…

B.V.Reddy Enterprises P Ltd., Chennai vs. ACIT Corporate Circle 1(2), Chennai

In the result, appeal of the assessee is partly allowed

ITA 1971/CHNY/2017[2011-12]Status: DisposedITAT Chennai31 Mar 2022AY 2011-12

Bench: S/Shri Shri Chandra Mohan Garg, Judicial & Arun Khodpia & Arun Khodpia & Arun Khodpiaassessment Year : 2011-12 B.V.Reddy Enterprises, 2 B.V.Reddy Enterprises, 2-1285, Vs. Acit, Corpn. Circle-1(2), Acit, Corpn. Circle B.V.Reddy Colony, Chittor B.V.Reddy Colony, Chittor-517 Chennai 001 Pan/Gir No.Aaccn 2252 L Aaccn 2252 L (Appellant) (Appellant .. ( Respondent Respondent)

For Appellant: Shri S.Sridhar , ARFor Respondent: Shri G.Johnson, Addl CIT (

…wed funds for non-business purposes. It was also pointed out that the appellant had not borrowed any funds which carried interest and hence the taken was not tenable on facts. 14. The jurisdictional High Court in the cases of P.R.M.S. Ramanathan Chettiar CIT( 72 ITR 534) (Mad) and M.P.S.Raja v.CIT (105 ITR 295) (Mad), has held t interest paid on borrowed capital will he allowed as deduction only if the capital was used for the purpose of business. Again, the Hon'ble High Court of Punjab & Haryana in the case of CIT v. Kudu Industries in ITA No.388 of 2014 order dated 31.7.2015 have held that where mixed funds are…

ACIT, Chennai vs. B.V.Reddy Enterprises Pvt Ltd., Chennai

In the result, appeal of the assessee is partly allowed

ITA 3276/CHNY/2016[2013-14]Status: DisposedITAT Chennai31 Mar 2022AY 2013-14

Bench: S/Shri Shri Chandra Mohan Garg, Judicial & Arun Khodpia & Arun Khodpia & Arun Khodpiaassessment Year : 2011-12 B.V.Reddy Enterprises, 2 B.V.Reddy Enterprises, 2-1285, Vs. Acit, Corpn. Circle-1(2), Acit, Corpn. Circle B.V.Reddy Colony, Chittor B.V.Reddy Colony, Chittor-517 Chennai 001 Pan/Gir No.Aaccn 2252 L Aaccn 2252 L (Appellant) (Appellant .. ( Respondent Respondent)

For Appellant: Shri S.Sridhar , ARFor Respondent: Shri G.Johnson, Addl CIT (

…wed funds for non-business purposes. It was also pointed out that the appellant had not borrowed any funds which carried interest and hence the taken was not tenable on facts. 14. The jurisdictional High Court in the cases of P.R.M.S. Ramanathan Chettiar CIT( 72 ITR 534) (Mad) and M.P.S.Raja v.CIT (105 ITR 295) (Mad), has held t interest paid on borrowed capital will he allowed as deduction only if the capital was used for the purpose of business. Again, the Hon'ble High Court of Punjab & Haryana in the case of CIT v. Kudu Industries in ITA No.388 of 2014 order dated 31.7.2015 have held that where mixed funds are…

ACIT, Chennai vs. B.V.Reddy Enterprises Pvt Ltd., Chennai

In the result, appeal of the assessee is partly allowed

ITA 3275/CHNY/2016[2012-13]Status: DisposedITAT Chennai31 Mar 2022AY 2012-13

Bench: S/Shri Shri Chandra Mohan Garg, Judicial & Arun Khodpia & Arun Khodpia & Arun Khodpiaassessment Year : 2011-12 B.V.Reddy Enterprises, 2 B.V.Reddy Enterprises, 2-1285, Vs. Acit, Corpn. Circle-1(2), Acit, Corpn. Circle B.V.Reddy Colony, Chittor B.V.Reddy Colony, Chittor-517 Chennai 001 Pan/Gir No.Aaccn 2252 L Aaccn 2252 L (Appellant) (Appellant .. ( Respondent Respondent)

For Appellant: Shri S.Sridhar , ARFor Respondent: Shri G.Johnson, Addl CIT (

…wed funds for non-business purposes. It was also pointed out that the appellant had not borrowed any funds which carried interest and hence the taken was not tenable on facts. 14. The jurisdictional High Court in the cases of P.R.M.S. Ramanathan Chettiar CIT( 72 ITR 534) (Mad) and M.P.S.Raja v.CIT (105 ITR 295) (Mad), has held t interest paid on borrowed capital will he allowed as deduction only if the capital was used for the purpose of business. Again, the Hon'ble High Court of Punjab & Haryana in the case of CIT v. Kudu Industries in ITA No.388 of 2014 order dated 31.7.2015 have held that where mixed funds are…

M/S Sumeru Enterproses, Jaipur vs. Income Tax Officer, Ward-6-4, Jaipur

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

ITA 888/JPR/2019[2014-15]Status: DisposedITAT Jaipur20 Jan 2021AY 2014-15
For Appellant: Shri Manish Agrarwal (C.A.)For Respondent: Shri B.K. Gupta (CIT) a
Section 143(3)Section 36(1)(vii)Section 37(1)

…आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 886 to 888/JP/2019 fu/kZkj.k o"kZ@Assessment Years : 2012-13 to 2014-15 cuke M/s Sumeru Enterprises The ITO, Vs. H-1-29, Old Tourist Hotel Building, Ward-6(4), Subhash Marg, C-Scheme, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAEFS 3266 L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Manish Agrarwal (…

M/S Sumeru Enterproses, Jaipur vs. Income Tax Officer, Ward-6-4, Jaipur

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

ITA 887/JPR/2019[2013-14]Status: DisposedITAT Jaipur20 Jan 2021AY 2013-14
For Appellant: Shri Manish Agrarwal (C.A.)For Respondent: Shri B.K. Gupta (CIT) a
Section 143(3)Section 36(1)(vii)Section 37(1)

…आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 886 to 888/JP/2019 fu/kZkj.k o"kZ@Assessment Years : 2012-13 to 2014-15 cuke M/s Sumeru Enterprises The ITO, Vs. H-1-29, Old Tourist Hotel Building, Ward-6(4), Subhash Marg, C-Scheme, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAEFS 3266 L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Manish Agrarwal (…

M/S Sumeru Enterproses, Jaipur vs. Income Tax Officer, Ward-6-4, Jaipur

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

ITA 886/JPR/2019[2012-13]Status: DisposedITAT Jaipur20 Jan 2021AY 2012-13
For Appellant: Shri Manish Agrarwal (C.A.)For Respondent: Shri B.K. Gupta (CIT) a
Section 143(3)Section 36(1)(vii)Section 37(1)

…आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 886 to 888/JP/2019 fu/kZkj.k o"kZ@Assessment Years : 2012-13 to 2014-15 cuke M/s Sumeru Enterprises The ITO, Vs. H-1-29, Old Tourist Hotel Building, Ward-6(4), Subhash Marg, C-Scheme, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAEFS 3266 L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Manish Agrarwal (…

Quantum Real Estate and Property Development India Ltd, Mumbai vs. DCIT Cen Cir 39, Mumbai

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

ITA 813/MUM/2012[2008-09]Status: DisposedITAT Mumbai03 Oct 2018AY 2008-09

Bench: Shri R.C.Sharma, Am & Shri Ram Lal Negi, Jm M/S. Quantum Real Estate Vs. Dcit, Cc-39 & Property Development Aayakar Bhavan India Ltd., Ground Floor, M.K. Road 101, Kapadia Apartment Mumbai – 400 020 S.V. Road, Vile Parle (W) Mumbai – 400 056 Pan/Gir No.Aaacq1375R (Appellant) .. (Respondent)

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

…s not for the business purpose, 3 M/s. Quantum Real Estate and Property interest paid cannot be allowed as deduction u/s. 36(1)(iii). The A.O. has also relied on the decision of the Hon'ble Madras High Court in the Case of P.R.M.S. Ramanathen Chettiar v. CIT 72 ITR 534, M.S.P. Raja v. CIT 105 ITR 295, K. - Somasundiiram & Bros. v. CIT 238 ITR 939 and in the case of CIT v. Abhishek Industries Ltd. 156 Taxman 257. In view of the facts that although the assessee has claimed in the balance sheet that advances were given against property but nothing has been brought on record to establish the same and relying on the…

Radiant Indus Chem P. Ltd, Mumbai vs. ITO 5(3)(1), Mumbai

In the result, the appeal bearing no

ITA 5632/MUM/2015[2011-12]Status: DisposedITAT Mumbai16 Nov 2017AY 2011-12

Bench: Shri D.T.Garasia, Jm & Shri Rajesh Kumar, Am

For Appellant: Shri Jitendra JainFor Respondent: Shri Purushottam Kumar
Section 143(1)Section 143(2)Section 36Section 36(1)(iii)

…erted is on the appellant. The onus was not discharged by it. It has also not explained why it necessitated to go for borrowings when own funds are available with it. 4.2.5 Above all, the Madras High Court in the cases of P.R.M.S. Ramanathan Chettiar v. CIT( 72 ITR 534) (Mad) and M.P.S.Raja v.CIT (105 ITR 295) (Mad), has held that interest paid on borrowed capital will be allowed as deduction only if the capital was used for the purpose of business. If it is used for a purpose other than that of its own business, then interest to that extent to which capital was so used, will not be allowed. 4.2.6 In view of th…

Radiant Indus Chem P. Ltd, Mumbai vs. ITO 5(3)(1), Mumbai

In the result, the appeal bearing no

ITA 5631/MUM/2015[2010-11]Status: DisposedITAT Mumbai16 Nov 2017AY 2010-11

Bench: Shri D.T.Garasia, Jm & Shri Rajesh Kumar, Am

For Appellant: Shri Jitendra JainFor Respondent: Shri Purushottam Kumar
Section 143(1)Section 143(2)Section 36Section 36(1)(iii)

…erted is on the appellant. The onus was not discharged by it. It has also not explained why it necessitated to go for borrowings when own funds are available with it. 4.2.5 Above all, the Madras High Court in the cases of P.R.M.S. Ramanathan Chettiar v. CIT( 72 ITR 534) (Mad) and M.P.S.Raja v.CIT (105 ITR 295) (Mad), has held that interest paid on borrowed capital will be allowed as deduction only if the capital was used for the purpose of business. If it is used for a purpose other than that of its own business, then interest to that extent to which capital was so used, will not be allowed. 4.2.6 In view of th…

M/S Snowtex Investment Ltd., Kolkata vs. DCIT, Circle - 12, Kolkata

In the result, appeal of the revenue is dismissed and that of the assessee is allowed

ITA 1793/KOL/2014[2010-2011]Status: DisposedITAT Kolkata15 Nov 2017AY 2010-2011

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

Section 36(1)(iii)

…Snowtex Investment Ltd.., AY, 2010-11 आयकर अपील"य अधीकरण, "यायपीठ – “A” कोलकाता, IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA (सम") "ी ऐ. ट". वक", "यायीक सद"य एवं डॉ. अजु"न लाल सैनी, लेखा सद"य) [Before Shri A. T. Varkey, JM & Dr. A. L. Saini, AM] I.T.A. No. 1291/Kol/2014 Assessment Year: 2010-11 Deputy Commissioner of Income-tax, Vs. M/s. Snowtex Investment Ltd. Central Circle-XXX, Kolkata (PAN: AAECS0334C) Appellant Respondent & I.T.A. No. 1793/Kol/2014 Assessment Year: 2010-11 M/s. Snowtex Investment Ltd. Vs. Deputy Commissioner of Income-tax, Central Circle-12, Kolkata Appellant Respondent Dat…

DCIT, CC-Xxx, Kolkata vs. M/S Snowtex Investment Ltd., Kolkata

In the result, appeal of the revenue is dismissed and that of the assessee is allowed

ITA 1291/KOL/2014[2010-2011]Status: DisposedITAT Kolkata15 Nov 2017AY 2010-2011

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

Section 36(1)(iii)

…Snowtex Investment Ltd.., AY, 2010-11 आयकर अपील"य अधीकरण, "यायपीठ – “A” कोलकाता, IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA (सम") "ी ऐ. ट". वक", "यायीक सद"य एवं डॉ. अजु"न लाल सैनी, लेखा सद"य) [Before Shri A. T. Varkey, JM & Dr. A. L. Saini, AM] I.T.A. No. 1291/Kol/2014 Assessment Year: 2010-11 Deputy Commissioner of Income-tax, Vs. M/s. Snowtex Investment Ltd. Central Circle-XXX, Kolkata (PAN: AAECS0334C) Appellant Respondent & I.T.A. No. 1793/Kol/2014 Assessment Year: 2010-11 M/s. Snowtex Investment Ltd. Vs. Deputy Commissioner of Income-tax, Central Circle-12, Kolkata Appellant Respondent Dat…

P.R.M.S Ramanathan Chettiar v. CIT (72 ITR 534) — Cited in 15 Judgments | BharatTax