Revenue. 16. In S.A. Builders Limited v. Commissioner of Income Tax (Appeals) Chandigarh

1 SCC 781Supreme Court of India2007#2061 most cited

What is Revenue. 16. In S.A. Builders Limited v. Commissioner of Income Tax (Appeals) Chandigarh authority for?

An ad hoc disallowance of business expenditure is impermissible merely because a third party incidentally benefits from it. Expenditure genuinely incurred for business purposes, based on commercial expediency, cannot be disallowed on such grounds.

55

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2015 to 2025.

Also referred to as

S.A. Builders v. CIT · business expenditure · disallowance of expenditure · incidental third party benefit · commercial expediency · Section 37(1) of Income Tax Act · genuine business purpose · Supreme Court · 2007 SCC 781

Judgments citing Revenue. 16. In S.A. Builders Limited v. Commissioner of Income Tax (Appeals) Chandigarh

Pr Commissioner of Income Tax vs. M/S Samarpan Synthetics Pvt Ltd

Accordingly, the learned appellate authority has rightly dismissed the

ITA/17/2021HC Rajasthan04 Mar 2022

Bench: AKIL KURESHI,REKHA BORANA

Section 107

…is clarificatory in nature and the same has been made pursuant to the recommendation made by the GST Council in its 47th GST Council Meeting dated 28-29 June, 2022. 1 2013 (32) STR 288 (AP) 2 2010 (260) ELT 369 (Bom.) 3 2011 (24) STR 3 (Guj.) 4 (2007) 1 SCC 781 Page 11 of 32 {W.P.(T)Nos.14/2021, 15/2021, 16/2021, 17/2021 & 18/2021} He would further rely upon the decisions of the Gujarat High Court, Andhra Pradesh High Court and the Supreme Court in the matters of Ascent Meditech Ltd. v. Union of India and others5, M/s Tirth Agro Technology Pvt. Ltd. and another v. Union of India and others6,…

Principal Commissioner of Income Tax 1 Kolkata vs. M/S Apeejay Shipping Ltd

In the result, these appeals are allowed and the substantial

ITA/26/2021HC Calcutta08 Dec 2021

Bench: HON'BLE JUSTICE T. S. SIVAGNANAM,HON'BLE JUSTICE HIRANMAY BHATTACHARYYA

…ased the shares there was no allegation against the 44 (2008) 14 SCC 151 45 (2009) 2 SCC 192 46 (2015) 324 ELT 641 (SC) 47 (1980) Supplementary SCC 660 48 (2002) (143) ELT 25 (SC) 49 (2007) 1 SCC 781 50 (2016) 93 VST 326 ITAT NO. 06 OF 2022 AND ETC. BATCH Page 51 of 150 company or the stock broker or any other person and therefore any investigation done subsequently cannot work prejudice to the assessee who is a genuine investor. 25. It is submitted that the revenue largely emphasized on the concept of circumstantial evidence whic…

Shri Rajesh Natani, Jaipur vs. ITO, Ward-4(5), Jaipur

In the result, this appeal of the assessee is allowed

ITA 234/JPR/2020[2015-16]Status: DisposedITAT Jaipur23 Nov 2021AY 2015-16

Bench: Shri Sandeep Gosain, Jm & Shri Vikram Singh Yadav, Am Vk;Dj Vihy La-@Ita No. 233 & 234/Jp/2020 Fu/Kzkj.K O"Kz@Assessment Years :2014-15 & 2015-16 Rajesh Natani, Cuke I.T.O. Vs. A-2, Subhash Nagar, Shastri Nagar, Ward-4(5), Jaipur-302016 (Raj) Jaipur. Lfkk;H Ys[Kk La-@Thvkbzvkj La-@Pan/Gir No.: Aaacn 5961 E Vihykfkhz@Appellant Izr;Fkhz@Respondent Fu/Kzkfjrh Dh Vksj Ls@ Assessee By : Shri G.N. Sharma (Adv) Jktlo Dh Vksj Ls@ Revenue By: Smt. Monisha Choudhary (Jcit) Lquokbz Dh Rkjh[K@ Date Of Hearing : 09/11/2021 Mn?Kks"K.Kk Dh Rkjh[K@ Date Of Pronouncement : 23/11/2021 Vkns'K@ Order Per: Sandeep Gosain, J.M. Both These Appeals Have Been Filed By The Assessee Against The Separate Orders Of The Ld. Cit(A), Ajmer Dated 17/10/2019 For The A.Y. 2014-15 & 2015-16 Respectively.

For Appellant: Shri G.N. Sharma (Adv)For Respondent: Smt. Monisha Choudhary (JCIT)
Section 253Section 36(1)(iii)

…rat) Ltd. reported in (2002) 175 CTR Del 559, The ld. AR has also relied on the following judicial pronouncements: (i) S.A. Builders Ltd. Vs Commissioner of Income Tax (Appeals), Chandigarh and Others, order dated 14/12/2006 reported in AIR 2007 SC 482, (2007)1 SCC 781, MANU/SC/8798/2006. (ii) Commissioner of Income Tax Vs Vijay Solvex Ltd. (2015) 274 CTR (Raj.) 384. (iii) Commissioner of Income Tax Vs Rajeev Lochan Kanoria, (1994) 208 ITR 616 (Cal) (iv). Commissioner of Income Tax Vs Sanghi Finance and Investment Ltd. (2005) 273 ITR 268 (MP) 13. On the other hand, the ld. DR has vehemently supported the order…

Shri Rajesh Natani, Jaipur vs. ITO, Ward-4(5), Jaipur

In the result, this appeal of the assessee is allowed

ITA 233/JPR/2020[2014-15]Status: DisposedITAT Jaipur23 Nov 2021AY 2014-15

Bench: Shri Sandeep Gosain, Jm & Shri Vikram Singh Yadav, Am Vk;Dj Vihy La-@Ita No. 233 & 234/Jp/2020 Fu/Kzkj.K O"Kz@Assessment Years :2014-15 & 2015-16 Rajesh Natani, Cuke I.T.O. Vs. A-2, Subhash Nagar, Shastri Nagar, Ward-4(5), Jaipur-302016 (Raj) Jaipur. Lfkk;H Ys[Kk La-@Thvkbzvkj La-@Pan/Gir No.: Aaacn 5961 E Vihykfkhz@Appellant Izr;Fkhz@Respondent Fu/Kzkfjrh Dh Vksj Ls@ Assessee By : Shri G.N. Sharma (Adv) Jktlo Dh Vksj Ls@ Revenue By: Smt. Monisha Choudhary (Jcit) Lquokbz Dh Rkjh[K@ Date Of Hearing : 09/11/2021 Mn?Kks"K.Kk Dh Rkjh[K@ Date Of Pronouncement : 23/11/2021 Vkns'K@ Order Per: Sandeep Gosain, J.M. Both These Appeals Have Been Filed By The Assessee Against The Separate Orders Of The Ld. Cit(A), Ajmer Dated 17/10/2019 For The A.Y. 2014-15 & 2015-16 Respectively.

For Appellant: Shri G.N. Sharma (Adv)For Respondent: Smt. Monisha Choudhary (JCIT)
Section 253Section 36(1)(iii)

…rat) Ltd. reported in (2002) 175 CTR Del 559, The ld. AR has also relied on the following judicial pronouncements: (i) S.A. Builders Ltd. Vs Commissioner of Income Tax (Appeals), Chandigarh and Others, order dated 14/12/2006 reported in AIR 2007 SC 482, (2007)1 SCC 781, MANU/SC/8798/2006. (ii) Commissioner of Income Tax Vs Vijay Solvex Ltd. (2015) 274 CTR (Raj.) 384. (iii) Commissioner of Income Tax Vs Rajeev Lochan Kanoria, (1994) 208 ITR 616 (Cal) (iv). Commissioner of Income Tax Vs Sanghi Finance and Investment Ltd. (2005) 273 ITR 268 (MP) 13. On the other hand, the ld. DR has vehemently supported the order…

The South Indian Bank Ltd vs. The Commissioner of Income Tax

C.A. No.-009606-009606 - 2011Supreme Court09 Sept 2021

Bench: HON'BLE MR. JUSTICE HRISHIKESH ROY

Section 14Section 14A

…e in relation to funds lent to sister concern out of mixed funds. The issue in SA 5 (2013) 354 ITR 630 (Guj)/ 2013 SCC Online Guj 8613 6 (2016) 383 ITR 490 (Karn)/ 2016 SCC Online Kar 8490 7 (2016) 388 ITR 81 (P & H) / 2016 SCC Online P&H 6788 8 [(2007) 1 SCC 781] Page 12 of 22 Builders is pending consideration before the larger bench of this Court in SLP (C) No. 14729 of 2012 titled as Addl. CIT v. Tulip Star Hotels Ltd. The counsel therefore, argues that there is no finality on the issue of disallowance, when mixed funds are used. On this aspect, since the issue is pending before a larger Bench…

Suchirindia Infratech Pvt. Ltd vs. Dy. Commissioner of Income-Tax

Accordingly, the learned appellate authority has rightly dismissed the

ITTA/15/2021HC Telangana30 Apr 2021

Bench: T.VINOD KUMAR,M.S.RAMACHANDRA RAO

Section 107

…is clarificatory in nature and the same has been made pursuant to the recommendation made by the GST Council in its 47th GST Council Meeting dated 28-29 June, 2022. 1 2013 (32) STR 288 (AP) 2 2010 (260) ELT 369 (Bom.) 3 2011 (24) STR 3 (Guj.) 4 (2007) 1 SCC 781 Page 11 of 32 {W.P.(T)Nos.14/2021, 15/2021, 16/2021, 17/2021 & 18/2021} He would further rely upon the decisions of the Gujarat High Court, Andhra Pradesh High Court and the Supreme Court in the matters of Ascent Meditech Ltd. v. Union of India and others5, M/s Tirth Agro Technology Pvt. Ltd. and another v. Union of India and others6,…

Shiv Raj Gupta vs. Commissioner of Income-Tax, Delhi IV

C.A. No.-012044-012044 - 2016Supreme Court22 Jul 2020

Bench: HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN

…lary or remuneration of the employer and the employees and other prior charges 19 such as interest on capital, depreciation, reserves etc., a part of it should in all fairness go to the employees.” Also, this Court in S.A. Builders Ltd. v. CIT (2007) 1 SCC 781 held as follows: “36. We agree with the view taken by the Delhi High Court in CIT v. Dalmia Cement (B) Ltd. [(2002) 254 ITR 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 itself), the Revenue cannot justifiably cl…

Principal Commissioner of Income Tax-7 vs. The Basti Sugar Mills Company Limited

ITA/205/2018HC Delhi28 Sept 2018

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE CHANDER SHEKHAR

Section 260ASection 36(1)(iii)

…Page 2 of 5 remitted to the file of the Assessing Officer in light of the judgment of the Supreme Court in S.A. Builders LTD versus Commissioner of Income Tax, (2007) 1 SCC 781. 3. The Assessment Order on remand observes that the respondent- assessee had been asked to adduce material to prove that the interest free advances to sister concerns were out of its own funds and not out of borrowed capital from the bank on which there was interest liability. This was necessary to examine the question of "commercial expedi…

Principal Commissioner of Income Tax-7 vs. The Basti Sugar Mills Company Limited

ITA-205/2018HC Delhi28 Sept 2018
Section 260ASection 36(1)(iii)

…Page 2 of 5 remitted to the file of the Assessing Officer in light of the judgment of the Supreme Court in S.A. Builders LTD versus Commissioner of Income Tax, (2007) 1 SCC 781. 3. The Assessment Order on remand observes that the respondent- assessee had been asked to adduce material to prove that the interest free advances to sister concerns were out of its own funds and not out of borrowed capital from the bank on which there was interest liability. This was necessary to examine the question of "commercial expedi…

Principal Commissioner of Income Tax - 7 vs. Reebok India Company

ITA/1130/2017HC Delhi25 Sept 2018

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE CHANDER SHEKHAR

Section 260ASection 36(1)(iii)

…made. As per Section 36(1)(iii) of the Act interest paid for capital borrowed for purpose of business has to be allowed as a deduction. 7. The Supreme Court in S.A. Builders Ltd. Versus Commissioner of Income Tax (Appeals) Chandigarh And Another, (2007) 1 SCC 781, had interpreted section 36(1)(iii) of the Act to observe that interest paid on capital borrowed for the purpose of business is to be allowed as a deduction in computing taxable income. The expression "for purposes of business or profession" occurring in Section 36(1)(iii) of the Act is wider in scope than the expression "for the purpose of ea…

Pr. Commissioner of Income Tax vs. M/S. Second Leasing Pvt. Ltd

ITA/906/2017HC Delhi30 Oct 2017

Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

Section 37Section 40A(2)(b)

…The direction of the AO’s enquiry appeared to have been to seek quantified justification as to the contribution of the individual in this case. The Court recollects the warning of the Supreme Court in S.A. Builders v. Commissioner of Income Tax, (2007) 1 SCC 781 that the AO’s rulings in such matters including commercial expenditure under Section 37 should not place matters in the arm chair of the assessee, or judge the merits or otherwise of a commercial transaction. In this case, the Court has no doubt that the AO did precisely that. For the above reasons, the Court is of the opinion that no sub…

Virji Bharamal Gala, Mumbai vs. ITO 13(3)(1), Mumbai

In the result, both the appeals filed by the assessee are allowed

ITA 2996/MUM/2012[2008-09]Status: DisposedITAT Mumbai24 Feb 2016AY 2008-09

Bench: Shri B.R.Baskaran (Am) & Shri Ram Lal Negi (Jm)

For Appellant: Shri. Ratan SamalFor Respondent: Ms. Lata Sunder
Section 36(1)(iii)

…e or of the nature of personal expenditure and the same was expended in the relevant previous year and not in prior or subsequent year. 5. The Ld. Counsel relying upon the ratio laid down by the Hon’ble Supreme Court in the case of M/s S.A. Builders [(2007) 1 SCC 781)] and by the Hon’ble jurisdictional High court in M/s Rajasthan Warehousing Corporation (242 ITR 450), submitted that the appellant’s case is covered by the aforesaid judicial pronouncements and as per the ratio laid down in the said cases the interest Assessment Year: 2004-05 & 2008-09 paid by assessee is an allowable expenditure. The Ld. Counsel…

Virji Bharamal Gala, Mumbai vs. ITO 13(3)(1), Mumbai

In the result, both the appeals filed by the assessee are allowed

ITA 2995/MUM/2012[2004-05]Status: DisposedITAT Mumbai24 Feb 2016AY 2004-05

Bench: Shri B.R.Baskaran (Am) & Shri Ram Lal Negi (Jm)

For Appellant: Shri. Ratan SamalFor Respondent: Ms. Lata Sunder
Section 36(1)(iii)

…e or of the nature of personal expenditure and the same was expended in the relevant previous year and not in prior or subsequent year. 5. The Ld. Counsel relying upon the ratio laid down by the Hon’ble Supreme Court in the case of M/s S.A. Builders [(2007) 1 SCC 781)] and by the Hon’ble jurisdictional High court in M/s Rajasthan Warehousing Corporation (242 ITR 450), submitted that the appellant’s case is covered by the aforesaid judicial pronouncements and as per the ratio laid down in the said cases the interest Assessment Year: 2004-05 & 2008-09 paid by assessee is an allowable expenditure. The Ld. Counsel…

South Ltd) vs. Commissioner of Income Tax

The appeals are allowed but in the circumstances, with no

ITA/336/2014HC Delhi21 Sept 2015
Section 260A

…Page 9 of 14 affirmative, i.e., in favour of the Assessee and against the Revenue. 16. In S.A. Builders Limited v. Commissioner of Income Tax (Appeals) Chandigarh (2007) 1 SCC 781, the Assessee company had advanced loans to its subsidiary without charging any interest. The loans were transferred out of the cash-credit account of the Assessee in which there was a debit balance. The AO disallowed the proportionate interest earned on the said loan out of the total interest paid to the bank by the Assessee. The disallowance…

South Ltd) vs. Commissioner of Income Tax

The appeals are allowed but in the circumstances, with no

ITA/334/2014HC Delhi21 Sept 2015
Section 260A

…Page 9 of 14 affirmative, i.e., in favour of the Assessee and against the Revenue. 16. In S.A. Builders Limited v. Commissioner of Income Tax (Appeals) Chandigarh (2007) 1 SCC 781, the Assessee company had advanced loans to its subsidiary without charging any interest. The loans were transferred out of the cash-credit account of the Assessee in which there was a debit balance. The AO disallowed the proportionate interest earned on the said loan out of the total interest paid to the bank by the Assessee. The disallowance…