Phaltan Sugar Works Ltd. v. CIT

215 ITR 582High Court1995#2364 most cited

What is Phaltan Sugar Works Ltd. v. CIT authority for?

Interest on borrowed capital used for purposes not directly related to the assessee's immediate business, such as providing interest-free advances or investing in a subsidiary's shares, is not deductible under Section 36(1)(iii) due to a restrictive interpretation of "for the purposes of business."

49

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2006 to 2025.

Also referred to as

Phaltan Sugar Works Ltd. v. CIT · 215 ITR 582 · Section 36(1)(iii) · interest on borrowed capital · disallowance of interest · commercial expediency · interest free advances · investment in subsidiary · for purposes of business · limited interpretation · overruled decision

Sections most often in play

Section 36(1)(iii)Section 1961Section 68Section 143(3)Section 194(I)(b)Section 24Section 37Section 115BBE

Issues it is cited on

section 40(a)(2)(b)section 36(1)(ii)interest free advancessection 36(1)(iii)commercial expediencycolourable devicebusiness connectionsection 36(1)section 36disallowance of interest expenditureput to useunabsorbed depreciation

Judgments citing Phaltan Sugar Works Ltd. v. CIT

Deepak Nagindas Shah, Mumbai vs. ACIT Circle-19 (1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 7032/MUM/2019[2014-15]Status: DisposedITAT Mumbai22 Dec 2021AY 2014-15

Bench: Shri Om Prakash Kant & Shri Amarjit Singhassessment Year: 2014-15 Deepak Nagindas Shah, Acit, Circle – 19(1), 506-B, Walkeshwar Chandanwala 2Nd Floor, Matru Mandir, Chs Ltd. 4, R. R. Thakkar Road, Tardeo Road, Walkeshwar, Vs. Mumbai - 400007 Mumbai - 400006 Pan: Aaqps1861H (Appellant) (Respondent) Assessee By : Mr. Suchek Anchaliya (Ar) Revenue By : Ms. Rajni Roy (Dr) Date Of Hearing : 02/12/2021 Date Of Pronouncement: 22/12/2021

For Appellant: Mr. Suchek Anchaliya (AR)For Respondent: Ms. Rajni Roy (DR)
Section 10Section 143(3)Section 14A

…commercial expediency is the correct view, and the view taken by the Bombay High Court which set aside the aforesaid decision is not correct. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. vs. Commissioner of Wealth-Tax (1995) 215 ITR 582 also does not appear to be correct. We agree with the view taken by the Delhi High Court in CIT vs. Dalmia Cement (Bhart) Ltd. (2002) 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiab…

Dy. Commissioner of Income Tax, Circle-2(1)., Hyderabad vs. Ksk Energy Company Private Limited, Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1663/HYD/2017[2014-15]Status: DisposedITAT Hyderabad30 Aug 2021AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…pany as a measure of commercial expediency is the correct view, and the view taken by the Bombay High Court which set aside the aforesaid decision is not correct. 33. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 585 also does not appear to be correct. 34. We agree with the view taken by the Delhi High Court in CIT v. Dalmia Cement (Bharat) Ltd. [2002] 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justi…

Dy. Commissioner of Income Tax, Circle-2(1)., Hyderabad vs. Ksk Energy Company Private Limited, Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1121/HYD/2017[2013-14]Status: DisposedITAT Hyderabad30 Aug 2021AY 2013-14

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…pany as a measure of commercial expediency is the correct view, and the view taken by the Bombay High Court which set aside the aforesaid decision is not correct. 33. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 585 also does not appear to be correct. 34. We agree with the view taken by the Delhi High Court in CIT v. Dalmia Cement (Bharat) Ltd. [2002] 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justi…

Dy. Commissioner of Income Tax, Circle-2(1)., Hyderabad vs. Ksk Energy Company Private Limited., Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1120/HYD/2017[2011-12]Status: DisposedITAT Hyderabad30 Aug 2021AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…pany as a measure of commercial expediency is the correct view, and the view taken by the Bombay High Court which set aside the aforesaid decision is not correct. 33. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 585 also does not appear to be correct. 34. We agree with the view taken by the Delhi High Court in CIT v. Dalmia Cement (Bharat) Ltd. [2002] 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justi…

DCIT, Circle-2(1), Hyderabad vs. Ksk Energy Company Private Limited, Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1745/HYD/2016[2010-11]Status: DisposedITAT Hyderabad30 Aug 2021AY 2010-11

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…pany as a measure of commercial expediency is the correct view, and the view taken by the Bombay High Court which set aside the aforesaid decision is not correct. 33. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 585 also does not appear to be correct. 34. We agree with the view taken by the Delhi High Court in CIT v. Dalmia Cement (Bharat) Ltd. [2002] 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justi…

The ACIT, Kochi vs. M/S.Kunnel Engineers & Contractors P. Ltd, Kochi

ITA 653/COCH/2019[2012-13]Status: DisposedITAT Cochin19 May 2020AY 2012-13

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

Section 43B

…) (Ker.) 4. Madhav Prasad Jantia vs. CIT (AIR 1979 SC 129) 5. Eastern Investments Ltd. vs. CIT (20 ITR 1) (SC) 6. CIT vs. Chandulal Keshavlal & Co. (38 ITR 601) (SC) 7. Phaltan Sugar Works Ltd. vs. CWT (208 ITR 989) (Bom.) 8. Phaltan Sugar Works Ltd. vs. CWT (215 ITR 582) (Bom.) 9. CIT vs. Dalmia Cement (Bharat) Ltd. (254 ITR 377) (Del.). 10. CIT vs. Malayalam Plantations Ltd. (53 ITR 140) (SC) 6. We have heard the rival submissions and perused the record. We find that the assessee has not established in the cash flow statements about the availability of enough own funds at the time of making investments in the…

Tupelo Construction Pvt. Ltd., New Delhi vs. DCIT, Circle- 25(2), New Delhi

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

ITA 2427/DEL/2018[2014-15]Status: DisposedITAT Delhi11 Oct 2018AY 2014-15

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastavaay: 2014-15 Tupelo Construction Pvt. Ltd., Vs Dcit, 296, Forest Lane, Circle 25(2), Neb Sarai, New Delhi. Sainik Farms, New Delhi-110066 (Pan: Aaect3335J) (Appellant) (Respondent) Assessee By: Shri Gautam Jain, Advocate Shri Lalit Mohan, Advocate Department By : Shri Ravi Kant Gupta, Sr. Dr

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Shri Ravi Kant Gupta, Sr. DR
Section 143(3)Section 36Section 36(1)(iii)

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’ NEW DELHI BEFORE SHRI G.D. AGRAWAL, HON’BLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AY: 2014-15 Tupelo Construction Pvt. Ltd., vs DCIT, 296, Forest Lane, Circle 25(2), Neb Sarai, New Delhi. Sainik Farms, New Delhi-110066 (PAN: AAECT3335J) (Appellant) (Respondent) Assessee by: Shri Gautam Jain, Advocate Shri Lalit Mohan, Advocate Department by : Shri Ravi Kant Gupta, Sr. DR Date of hearing: 18.07.2018 Date of pronouncement: 11.10.2018 ORDER PER SUDHANSHU SRIVASTAVA, J.M. This appeal has been preferred by the assessee against the o…

ITO, New Delhi vs. M/S. Menora Developers & Infrastructure Pvt. Ltd., New Delhi

In the result appeal of the assessee as well as of the revenue are dismissed

ITA 3125/DEL/2016[2011-12]Status: DisposedITAT Delhi25 Sept 2018AY 2011-12

Bench: Shri Sudhanshu Srivastava & Shri Prashant Maharishiito, Vs. Menora Developers & Ward-16(4), Infrastructure Pvt. Ltd, Room No. 304, Cr Building, A-60, Naraina Industrial Ip Estate, New Delhi Area-I, New Delhi Pan: Aafcm9587Q (Appellant) (Respondent) Menora Developers & Vs. Ito, Infrastructure Pvt. Ltd, Ward-16(4), A-60, Naraina Industrial Area-I, Room No. 304, Cr Building, New Delhi Ip Estate, New Delhi Pan: Aafcm9587Q (Appellant) (Respondent)

For Appellant: Shri Arvind Kumar, AdvFor Respondent: Ms. Ashima Neb, Sr. DR
Section 143(3)Section 14ASection 36Section 36(1)(iii)Section 8D

…INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”: NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITO, Vs. Menora Developers & Ward-16(4), Infrastructure Pvt. Ltd, Room No. 304, CR Building, A-60, Naraina Industrial IP Estate, New Delhi Area-I, New Delhi PAN: AAFCM9587Q (Appellant) (Respondent) Menora Developers & Vs. ITO, Infrastructure Pvt. Ltd, Ward-16(4), A-60, Naraina Industrial Area-I, Room No. 304, CR Building, New Delhi IP Estate, New Delhi PAN: AAFCM9587Q (Appellant) (Respondent) Revenue by : Ms. Ashima Neb, Sr. DR Assessee by: Shri Arvind Kumar, A…

M/S. Menora Developers & Infrastructures Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result appeal of the assessee as well as of the revenue are dismissed

ITA 2716/DEL/2016[2011-12]Status: DisposedITAT Delhi25 Sept 2018AY 2011-12

Bench: Shri Sudhanshu Srivastava & Shri Prashant Maharishiito, Vs. Menora Developers & Ward-16(4), Infrastructure Pvt. Ltd, Room No. 304, Cr Building, A-60, Naraina Industrial Ip Estate, New Delhi Area-I, New Delhi Pan: Aafcm9587Q (Appellant) (Respondent) Menora Developers & Vs. Ito, Infrastructure Pvt. Ltd, Ward-16(4), A-60, Naraina Industrial Area-I, Room No. 304, Cr Building, New Delhi Ip Estate, New Delhi Pan: Aafcm9587Q (Appellant) (Respondent)

For Appellant: Shri Arvind Kumar, AdvFor Respondent: Ms. Ashima Neb, Sr. DR
Section 143(3)Section 14ASection 36Section 36(1)(iii)Section 8D

…INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”: NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITO, Vs. Menora Developers & Ward-16(4), Infrastructure Pvt. Ltd, Room No. 304, CR Building, A-60, Naraina Industrial IP Estate, New Delhi Area-I, New Delhi PAN: AAFCM9587Q (Appellant) (Respondent) Menora Developers & Vs. ITO, Infrastructure Pvt. Ltd, Ward-16(4), A-60, Naraina Industrial Area-I, Room No. 304, CR Building, New Delhi IP Estate, New Delhi PAN: AAFCM9587Q (Appellant) (Respondent) Revenue by : Ms. Ashima Neb, Sr. DR Assessee by: Shri Arvind Kumar, A…

DCIT, Circle-2, Kolkata vs. M/S. Infinity Infotech Parks Ltd, Kolkata

In the result, the appeal of revenue is dismissed

ITA 1317/KOL/2012[2009-10]Status: DisposedITAT Kolkata14 May 2018AY 2009-10

Bench: "ी जे. सुधाकर रे"डी, लेखा सद"य एवं/And "ी ऐ. ट". वक", "यायीक सद"य) [Before Shri J. Sudhakar Reddy, Am & Shri A. T. Varkey, Jm]

Section 14A

…pany as a measure of commercial expediency is the correct view, and the view taken by the Bombay High Court which set aside the aforesaid decision is not correct. 34. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 582 also does not appear to be correct. 35. We agree with the view taken by the Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiab…

Kuloday Technopack P. Ltd, Mumbai vs. ITO 8(2)(2), Mumbai

In the result, appeal of the assessee in ITA No

ITA 3300/MUM/2013[2009-10]Status: DisposedITAT Mumbai29 Sept 2017AY 2009-10

Bench: Shri Joginder Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No. 3300/Mum/2013 (नििाारण वर्ा / Assessment Year : 2009-10 ) आयकर अपीऱ सं./I.T.A. No. 2423/Mum/2014 (नििाारण वर्ा / Assessment Year : 2010-11)

For Appellant: Shri. M. SubramanianFor Respondent: Shri Rajesh Kumar Yadav,DR
Section 143(3)Section 154Section 172Section 172(1)Section 194CSection 195Section 40

…) 269 ITR 535 (P&H), CIT vs. Saraya Sugar Mills (P) Ltd. (1993) 110 CTR (All) 23: (1993) 201 ITR 181 (All), Phaltan Sugar Works Ltd. vs. CIT (1995) 127 CTR (Bom) 359 : (1994) 208 ITR 989 (Bom), Phaltan Sugar Works Ltd. vs. CIT (1994) 122 CTR (Bom) 344: (1995) 215 ITR 582 (Bom), Elmer Havell Electrics & Ors. vs. CIT & Anr. (2005) 197 CTR (Del) 316 : (2005) 277 ITR 549 (Del) and C1T vs. Sujanni Textiles (P) Ltd. (1998) 147 CTR (Mad) 417: (1997) 225 ITR 560 (Mad) relied on; Veecumsees vs. CIT (1996) 133 CTR (SC) 500 : (1996) 9 SCC 25 distinguished; CIT vs. Orissa Cement Ltd. (2001) 252 ITR 878 (Del), CIT vs. Tin Box…

Mf Global Sify Securities India P.Ltd, Mumbai vs. Addl CIT RG 4(2), Mumbai

The appeal of the assessee is partly allowed in terms of our aforesaid observations

ITA 4407/MUM/2012[2008-09]Status: DisposedITAT Mumbai01 Sept 2017AY 2008-09

Bench: Shri G.S.Pannu, Am & Shri Ravish Sood, Jm आयकर अपील सं./ I.T.A. No. 4407/Mum/2012 (निर्धारण वर्ा / Assessment Year: 2008-09) Mf Global Sify Securities India Addl. Commissioner Of Private Ltd. (Formerly Known As Mf Income Tax- Range 4(2) बिधम/ Global Sify Securities India Private Limited); Room No. 669, Aayakar 2Nd Floor, Modern Centre, Block Vs. Bhavan, M.K. Road, C, Mahalaxmi-Mumbai. Mumbai- 400 020 स्थायीलेखासं./जीआइआरसं./ Pan/Gir No. Aabcr6382C (अपीलाथी/Appellant) (प्रत्यथी / Revenue) :

For Appellant: Shri Nishant Thakkar &For Respondent: Shri A.B. Koli, D.R
Section 143(3)Section 68

…rces of his concern by diverting its interest bearing funds for non-business purposes. The A.O thus relying on a host of judicial pronouncements, including the judgment of the Hon’ble High Court of Bombay in the case of Phaltan Sugar Works Ltd. Vs. CIT (1995) 215 ITR 582 (Bom) proceeded with and carried out a proportionate disallowance of interest amounting to Rs.3,28,767/- in respect of the interest free advances of Rs. 10 crore which were diverted by the assessee to its subsidiary company for a period of 10 days during the year under consideration. 11. That during the course of the hearing of the appeal, it wa…

Vipula J Choksi, Mumbai vs. ITO 8(3)(4), Mumbai

In the result, the appeal filed by the Assessee is partly allowed

ITA 6064/MUM/2014[2011-12]Status: DisposedITAT Mumbai25 May 2016AY 2011-12

Bench: Shri Jason P. Boaz, Am & Shri Sandeep Gosain, Jm Vipula J. Choksi Vs. Income Tax Officer-8(3)-4 Siddhi Priya Building Aaykar Bhavan, N.S. Road 4, Jvpd Scheme Mumbai-400 020. Vile Parle (W) Mumbai-400 056. Pan: Acxpc2426M Appellant .. Respondent

Section 143(1)Section 143(2)Section 143(3)Section 14ASection 36(1)(iii)Section 57

…any as a measure of commercial expediency is the correct view, and the view taken by the Bombay High Court which set aside the aforesaid decision is not correct. 30. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT (1995) 215 ITR 582 (Bom) also does not appear to be correct. 31. We agree with the view taken by the Delhi High Court in CIT v. Dalmia Cement (Bharat) Ltd. (2002) 254ITR 377 (Del) that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itselj), the revenue…

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)

…pany as a measure of commercial expediency is the correct view, and the view taken by the Bombay High Court which set aside the aforesaid decision is not correct. 34. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 582 also does not appear to be correct. 27 E-City Investment & Holdings Company Pvt. Ltd. ITA No.8382/Mum/11 35. We agree with the view taken by the Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessaril…

P.Sundararajan, Avanashi vs. DCIT, Tiruppur

In the result, the appeal of the assessee in ITA No

ITA 1666/CHNY/2013[2006-07]Status: DisposedITAT Chennai25 Jun 2015AY 2006-07

Bench: Shri Chandra Poojari & Shri V. Durga Raoआयकर अपील सं./ I.T.A. No.1666/Mds/2013 ("नधा"रण वष" / Assessment Year : 2006-2007)

For Appellant: Shri. G. Baskar, AdvocateFor Respondent: Shri. N. Madhavan, IRS, JCIT
Section 143(3)Section 147Section 148Section 36

…e substantially interested, interest in such amount to that extent was held disallowable. Similar views were expressed by Bombay High Court in Phaltan Sugar Works Ltd. v. Commissioner of Wealth Tax, and Phaltan Sugar Works Ltd. v. Commissioner of Income-Tax 215 ITR 582 (Bom). 14.10 In the case of Elmer Havell Electrics and Ors. v. Commissioner of Income-Tax and Anr. 277 ITR 549, the Delhi High Court, while rejecting the appeal of the assessee on the issue of disallowance of interest on interest free advances made to sister concern, observed that the assessee itself had taken loan with interest and had adv…

Commissioner of Income Tax (C) - III vs. M/S Dd Industries Ltd

ITA - 518 / 2013HC Delhi13 Mar 2015
Section 36

…13 sister concern, but that is not relevant. What is relevant is whether the assessee advanced such amount to its sister concern as a measure of commercial expediency? The law laid down by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 582 was overruled whereas that of the Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377 was approved. It was further held that it all depends on the facts and circumstance of the case as to whether the directors of the sister concern utilized the amount advanced to it by the assessee for their personal benefit, which obviousl…

Commissioner of Income Tax (C) -III vs. M/S Dd Industries Ltd

ITA - 516 / 2013HC Delhi13 Mar 2015
Section 36

…13 sister concern, but that is not relevant. What is relevant is whether the assessee advanced such amount to its sister concern as a measure of commercial expediency? The law laid down by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 582 was overruled whereas that of the Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377 was approved. It was further held that it all depends on the facts and circumstance of the case as to whether the directors of the sister concern utilized the amount advanced to it by the assessee for their personal benefit, which obviousl…

Commissioner of Income Tax (C) - III vs. M/S Dd Industries Ltd

ITA - 512 / 2013HC Delhi13 Mar 2015
Section 36

…13 sister concern, but that is not relevant. What is relevant is whether the assessee advanced such amount to its sister concern as a measure of commercial expediency? The law laid down by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 582 was overruled whereas that of the Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377 was approved. It was further held that it all depends on the facts and circumstance of the case as to whether the directors of the sister concern utilized the amount advanced to it by the assessee for their personal benefit, which obviousl…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

ITA/518/2013HC Delhi13 Mar 2015
Section 36

…13 sister concern, but that is not relevant. What is relevant is whether the assessee advanced such amount to its sister concern as a measure of commercial expediency? The law laid down by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 582 was overruled whereas that of the Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377 was approved. It was further held that it all depends on the facts and circumstance of the case as to whether the directors of the sister concern utilized the amount advanced to it by the assessee for their personal benefit, which obviousl…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

ITA/516/2013HC Delhi13 Mar 2015
Section 36

…13 sister concern, but that is not relevant. What is relevant is whether the assessee advanced such amount to its sister concern as a measure of commercial expediency? The law laid down by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 582 was overruled whereas that of the Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377 was approved. It was further held that it all depends on the facts and circumstance of the case as to whether the directors of the sister concern utilized the amount advanced to it by the assessee for their personal benefit, which obviousl…