Pepsu Road Transport Corporation v. CIT

130 ITR 18High Court1981#4129 most cited

What is Pepsu Road Transport Corporation v. CIT authority for?

An element of refund or repayment is a must in the concept of borrowing, meaning perpetual bonds, unlike equity or share capital, may not be considered borrowings if they lack this repayment element.

28

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2018 to 2026.

Also referred to as

Pepsu Road Transport Corporation v. CIT · 130 ITR 18 · borrowing · repayment · refund · perpetual bonds · equity capital · share capital

Sections most often in play

Section 115JBSection 14ASection 36(1)(iii)Section 8DSection 143(3)Section 32Section 36(1)(vii)Section 36(1)(viia)

Issues it is cited on

section 43dsection 36(2)(v)section 90(3)section 36(i)section 36(1)(ii)section 41(4)real income theorysection 36(1)(viia)section 36(2)section 36(1)(vii)section 36(1)(iii)period of holding

Judgments citing Pepsu Road Transport Corporation v. CIT

The Tata Power Company Limited, Mumbai vs. Principal Commissioner of Income Tax - 2, Mumbai

In the result, all the appeals of the assessee are partly allowed

ITA 2710/MUM/2018[2012-13]Status: DisposedITAT Mumbai25 Apr 2022AY 2012-13
For Appellant: Shri Percy Pardiwala &For Respondent: Shri Amol Kirtane
Section 143(2)Section 143(3)Section 144C(5)Section 263Section 36(1)(iii)

…t c. available to holders of the bonds and therefore, interest payable/paid on these bonds are not allowable under section 36(1)(iii) of the Act. Reliance is placed on the decision of Hon’ble Haryana High Court in the case of Pepsu Road Transport Corpn. V CIT 130 ITR 18 (P&H) wherein it has been held that an element of refund or repayment is a must in the concept of borrowing. If there is no obligation to refund the capital provided, interest on such capital is not deductible. d. The Hon’ble DRP has sustained an identical disallowance in the case of Tata Steel Ltd. for A. Y. 2013-14.” In response the assessee has…

Bank of India, Mumbai vs. Asst. CIT-2(1)(1), Mumbai

In the result, the appeal of the Assessing Officer is partly allowed in the terms indicated above

ITA 1767/MUM/2019[2015-16]Status: DisposedITAT Mumbai11 Dec 2020AY 2015-16
Section 115Section 11JSection 143(3)Section 90Section 90(3)

…ether the issue of perpetual bond qualifies as 'borrowing' for the purposes of the said section. 12.5 In this regard, reference may be made to the decision of the Hon'ble Punjab & Haryana High Court in the case of Pepsu Road transport Corpn v CIT, reported in 130 ITR 18 (P&H), that an element of refund or repayment is a must in the concept of borrowing. If there is no obligation to refund the capital provided, interest on such capital is not deductible under section 36(1)(iii). Therefore, in case of perpetual bonds, where the lender does not have authority to claim refund of the amount given, the said amount cann…

M/S. the Jampeta Co- Op Urban Bank Ltd, Rajahmundry vs. The Joit CIT, Rajahmundry

In the result, appeals filed by the assessee in ITA No

ITA 160/VIZ/2017[2011-2012]Status: DisposedITAT Visakhapatnam28 May 2018AY 2011-2012

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble & The Jampeta Co-Operative Vs. Acit, Circle-1, Urban Bank Ltd., Jampeta, Rajahmundry. Rajahmundry. Pan No. Aaaat 4048 E (Appellant) (Respondent)

For Appellant: Shri G.V.N. Hari, AdvocateFor Respondent: Shri S. Ravi Shankar Narayan, Sr.DR
Section 143(1)Section 143(3)Section 16Section 45

…)(iii) of the Act. Hence both section 36(1)(iii) and section 40(b)(iv) of the Act go together. (h) The term “Capital borrowed” signifies that there is a liability to repay the capital so borrowed. In the case of Pepsu Road Transport Corporation Vs. CIT (1981)(130 ITR 18)(P&H), the share capital provided by the Central and State Government was not treated as “borrowed capital” only for the reason that there was no obligation to refund the capital so provided. However, in the case of co-operative societies, there is a liability to repay the share capital when the concerned member ceases to be a member. Hence “Share…

The Aryapuram Co-Operative Urban Bank Ltd., Rajahmundry vs. The ACIT, Circle - 1, Rajahmundry

In the result, all the appeals filed by the assessee are partly allowed for statistical purposes; and the appeal filed by the Revenue is dismissed

ITA 177/VIZ/2013[2009-10]Status: DisposedITAT Visakhapatnam28 May 2018AY 2009-10

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri G.V.N. Hari – AdvocateFor Respondent: Shri Deba Kumar Sonawal – CIT DR
Section 143(3)Section 144Section 148Section 43Section 43B

…)(iii) of the Act. Hence both section 36(1)(iii) and section 40(b)(iv) of the Act go together. (h) The term “Capital borrowed” signifies that there is a liability to repay the capital so borrowed. In the case of Pepsu Road Transport Corporation Vs. CIT (1981)(130 ITR 18)(P&H), the share capital provided by the Central and State Government was not treated as “borrowed capital” only for the reason that there was no obligation to refund the capital so provided. However, in the case of co-operative societies, there is a liability to repay the share capital when the concerned member ceases to be a member. Hence “Share…

The Jampeta Co-Operative Urban Bank Ltd., Rajahmundry vs. The ACIT, Circle - 1, Rajahmundry

In the result, appeals filed by the assessee in ITA No

ITA 510/VIZ/2014[2010-11]Status: DisposedITAT Visakhapatnam28 May 2018AY 2010-11

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble & The Jampeta Co-Operative Vs. Acit, Circle-1, Urban Bank Ltd., Jampeta, Rajahmundry. Rajahmundry. Pan No. Aaaat 4048 E (Appellant) (Respondent)

For Appellant: Shri G.V.N. Hari, AdvocateFor Respondent: Shri S. Ravi Shankar Narayan, Sr.DR
Section 143(1)Section 143(3)Section 16Section 45

…)(iii) of the Act. Hence both section 36(1)(iii) and section 40(b)(iv) of the Act go together. (h) The term “Capital borrowed” signifies that there is a liability to repay the capital so borrowed. In the case of Pepsu Road Transport Corporation Vs. CIT (1981)(130 ITR 18)(P&H), the share capital provided by the Central and State Government was not treated as “borrowed capital” only for the reason that there was no obligation to refund the capital so provided. However, in the case of co-operative societies, there is a liability to repay the share capital when the concerned member ceases to be a member. Hence “Share…

The ACIT, Circle - 1, Rajahmundry vs. M/Sthe Aryapuram Co-Oprative Urban Bank Ltd., Rajahmundry

In the result, all the appeals filed by the assessee are partly allowed for statistical purposes; and the appeal filed by the Revenue is dismissed

ITA 195/VIZ/2013[2009-10]Status: DisposedITAT Visakhapatnam28 May 2018AY 2009-10

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri G.V.N. Hari – AdvocateFor Respondent: Shri Deba Kumar Sonawal – CIT DR
Section 143(3)Section 144Section 148Section 43Section 43B

…)(iii) of the Act. Hence both section 36(1)(iii) and section 40(b)(iv) of the Act go together. (h) The term “Capital borrowed” signifies that there is a liability to repay the capital so borrowed. In the case of Pepsu Road Transport Corporation Vs. CIT (1981)(130 ITR 18)(P&H), the share capital provided by the Central and State Government was not treated as “borrowed capital” only for the reason that there was no obligation to refund the capital so provided. However, in the case of co-operative societies, there is a liability to repay the share capital when the concerned member ceases to be a member. Hence “Share…

The Aryapuram Co-Operative Urban Bank Ltd., Rajahmundry vs. The ACIT, Rajahmundry

In the result, all the appeals filed by the assessee are partly allowed for statistical purposes; and the appeal filed by the Revenue is dismissed

ITA 173/VIZ/2015[2011-12]Status: DisposedITAT Visakhapatnam28 May 2018AY 2011-12

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri G.V.N. Hari – AdvocateFor Respondent: Shri Deba Kumar Sonawal – CIT DR
Section 143(3)Section 144Section 148Section 43Section 43B

…)(iii) of the Act. Hence both section 36(1)(iii) and section 40(b)(iv) of the Act go together. (h) The term “Capital borrowed” signifies that there is a liability to repay the capital so borrowed. In the case of Pepsu Road Transport Corporation Vs. CIT (1981)(130 ITR 18)(P&H), the share capital provided by the Central and State Government was not treated as “borrowed capital” only for the reason that there was no obligation to refund the capital so provided. However, in the case of co-operative societies, there is a liability to repay the share capital when the concerned member ceases to be a member. Hence “Share…

Aryapuram Co=Op. Urbank Ltd., Rajahmundry vs. The ACIT, Rajahmundry

In the result, all the appeals filed by the assessee are partly allowed for statistical purposes; and the appeal filed by the Revenue is dismissed

ITA 517/VIZ/2014[2010-11]Status: DisposedITAT Visakhapatnam28 May 2018AY 2010-11

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri G.V.N. Hari – AdvocateFor Respondent: Shri Deba Kumar Sonawal – CIT DR
Section 143(3)Section 144Section 148Section 43Section 43B

…)(iii) of the Act. Hence both section 36(1)(iii) and section 40(b)(iv) of the Act go together. (h) The term “Capital borrowed” signifies that there is a liability to repay the capital so borrowed. In the case of Pepsu Road Transport Corporation Vs. CIT (1981)(130 ITR 18)(P&H), the share capital provided by the Central and State Government was not treated as “borrowed capital” only for the reason that there was no obligation to refund the capital so provided. However, in the case of co-operative societies, there is a liability to repay the share capital when the concerned member ceases to be a member. Hence “Share…