S.A. Builders Ltd. v. CIT

288 ITR 1Supreme Court of India2007#26 most cited

What is S.A. Builders Ltd. v. CIT authority for?

Interest paid on borrowed funds cannot be disallowed merely because the assessee made interest-free advances, provided those advances were made for business purposes and commercial expediency. The Revenue cannot dictate a businessman's commercial decisions, but the assessee bears the onus to prove the business expediency.

1,484

judgments rely on this decision, according to BharatTax’s citation analysis of 367,181 Indian tax judgments — from 2008 to 2026.

Also referred to as

S.A. Builders Ltd. v. CIT · 288 ITR 1 · Section 36(1)(iii) · commercial expediency · business expediency · interest-free advances · disallowance of interest · onus to prove business purpose · borrowed funds · Revenue interference

Also reported as

158 Taxmann 74158 Taxmann.com 74

Sections most often in play

Section 143(3)Section 36(1)(iii)Section 14ASection 1961Section 148Section 147Section 40(a)(ia)Section 142(1)
Read the full judgment

Issues it is cited on

commercial expediencyinterest free advancessection 36(1)(iii)business expediencydisallowance of interest expendituresection 36(1)section 36revenue expendituresection 37(1)section 37capital expendituresection 14a

Judgments citing S.A. Builders Ltd. v. CIT

DCIT Circle 13(2)(2), Mumbai vs. Nandanbala Commercials Private Limited, Mumbai

In the result, the appeal filed by the revenue is dismissed and cross objection filed by the assesse is also dismissed

ITA 1134/MUM/2023[2016-17]Status: DisposedITAT Mumbai29 Jan 2024AY 2016-17

Bench: Shri Aby T Varkey & Shri Amarjit Singhdy. Commissioner Of Vs. Nandanbala Commercials Income Tax Circle 13(2)(2) Private Limited Room No. 452, 4 Th Floor, (Formerly Known As Sanjay Infraspace Limited) Aayakar Bhavan, 1401-A, Wing One Bkc, M.K. Road, Plot No. C-66, G-Block, Mumbai – 400020 Bkc, Bandra-East Mumbai -400 092 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aavcs1575L Appellant .. Respondent

For Appellant: Madhur AgarwalFor Respondent: HM Bhatt
Section 143(2)Section 36(1)(ii)

…re may not have been incurred under any legal obligation, yet it is allowable as a business expenditure if it was incurred on grounds of commercial expediency. Reliance is placed on the judgement of Hon'ble Apex Court in case of SA Builders Ltd. vs CIT (2007) 288 ITR 1. b) The Hon'ble ITAT Delhi in the case of Mason Infrastructure (P) Ltd vs DCIT (2021) 130 taxmann.com 234 has decided on this issue in favour of appellant in case where the facts are almost similar to the facts of appellant. The facts in this case were as under:- i) Assessee company was in business of purchase, sale and development of land and real…

DCIT Central Circle-II, Faridabad vs. A2Z Green Waste Management Ltd, New Delhi

In the result, both the appeals of the revenue are dismissed

ITA 5104/DEL/2019[2014-15]Status: DisposedITAT Delhi16 Jan 2024AY 2014-15

Bench: Shri M. Balaganesh & Shri Anubhav Sharmadcit, Vs. A2Z Infra Engineers Ltd, O-116, 1St Floor Shopping Central Circle-2, Faridabad Mall, Arjun Marg, Dlf, Phase-1, Gurgaon (Appellant) (Respondent) Pan: Aaeca1203A Dcit, Vs. A2Z Green Waste Central Circle-2, Management Ltd, Faridabad Arjun Marg, Dlf, Phase-1, Gurgaon (Appellant) (Respondent) Pan: Aaeca1203A

For Appellant: Shri Sidharth Kothari, CAFor Respondent: Shri Zafarul Haque Tanweer, CIT DR
Section 143(3)Section 14ASection 36(1)(iii)

…mercial expediency and given in the ordinary course of business, there is no question of disallowance of interest u/s 36(1)(iii) of the Act. Reliance in this regard is placed on the decision of Hon’ble Supreme Court in the case of S A Builders Ltd reported in 288 ITR 1 (SC). Accordingly, we do not find any infirmity in the order of the ld. CIT(A) granting relief to the assessee in this regard. Accordingly, the ground raised by the revenue in this regard is dismissed. 9. In the result, both the appeals of the revenue are dismissed. Order pronounced in the open court on 16/01/2024. - - (ANUBHAV SHARMA) ACCOUNTANT…

DCIT, CC-2, Faridabad vs. A2Z Infra Engineers Ltd., Gurgaon

In the result, both the appeals of the revenue are dismissed

ITA 5102/DEL/2019[2014-15]Status: DisposedITAT Delhi16 Jan 2024AY 2014-15

Bench: Shri M. Balaganesh & Shri Anubhav Sharmadcit, Vs. A2Z Infra Engineers Ltd, O-116, 1St Floor Shopping Central Circle-2, Faridabad Mall, Arjun Marg, Dlf, Phase-1, Gurgaon (Appellant) (Respondent) Pan: Aaeca1203A Dcit, Vs. A2Z Green Waste Central Circle-2, Management Ltd, Faridabad Arjun Marg, Dlf, Phase-1, Gurgaon (Appellant) (Respondent) Pan: Aaeca1203A

For Appellant: Shri Sidharth Kothari, CAFor Respondent: Shri Zafarul Haque Tanweer, CIT DR
Section 143(3)Section 14ASection 36(1)(iii)

…mercial expediency and given in the ordinary course of business, there is no question of disallowance of interest u/s 36(1)(iii) of the Act. Reliance in this regard is placed on the decision of Hon’ble Supreme Court in the case of S A Builders Ltd reported in 288 ITR 1 (SC). Accordingly, we do not find any infirmity in the order of the ld. CIT(A) granting relief to the assessee in this regard. Accordingly, the ground raised by the revenue in this regard is dismissed. 9. In the result, both the appeals of the revenue are dismissed. Order pronounced in the open court on 16/01/2024. - - (ANUBHAV SHARMA) ACCOUNTANT…

DCIT, Circle-2(1), Hyderabad vs. Kmc Constructions Limited, Hyderabad

In the result, the appeal of Revenue is dismissed, and the appeal of assessee is partly allowed

ITA 32/HYD/2017[2011-12]Status: DisposedITAT Hyderabad11 Jan 2024AY 2011-12

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Chary

For Appellant: Shri S. Rama Rao, ARFor Respondent: Shri K. Madhusudan, CIT-DR
Section 145(3)

…ness activity of the assessee from out of the substantial own funds of the assessee, then the interest on the borrowings cannot be disallowed. In this process, learned CIT(A) followed the decision of the Hon’ble Apex Court in the case of S.A. Builders vs. CIT 288 ITR 1 (SC). 17. Learned DR challenged the findings of the learned CIT(A) on the ground that when the assessee advanced funds to the sister concerns without any interest and the assessee fails to establish that such advances were made from out of the own funds it is but natural to assume that the lent amounts were out of the borrowed funds and, therefore…

Kmc Contructions Limited, Hyderabad vs. Addl. CIT, Range-2, Hyderabad

In the result, the appeal of Revenue is dismissed, and the appeal of assessee is partly allowed

ITA 1734/HYD/2016[2011-12]Status: DisposedITAT Hyderabad11 Jan 2024AY 2011-12

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Chary

For Appellant: Shri S. Rama Rao, ARFor Respondent: Shri K. Madhusudan, CIT-DR
Section 145(3)

…ness activity of the assessee from out of the substantial own funds of the assessee, then the interest on the borrowings cannot be disallowed. In this process, learned CIT(A) followed the decision of the Hon’ble Apex Court in the case of S.A. Builders vs. CIT 288 ITR 1 (SC). 17. Learned DR challenged the findings of the learned CIT(A) on the ground that when the assessee advanced funds to the sister concerns without any interest and the assessee fails to establish that such advances were made from out of the own funds it is but natural to assume that the lent amounts were out of the borrowed funds and, therefore…

Southern Petrochemical Industries Corporation Limited, Chennai vs. ITO Corporate Ward 3(1), Chennai

The appeal stand allowed accordingly

ITA 95/CHNY/2023[2009-10]Status: DisposedITAT Chennai10 Jan 2024AY 2009-10

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.95/Chny/2023 (िनधा)रण वष) / Assessment Year: 2009-10) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2023 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 14A

…the test of commercial expediency, in our opinion, was duly satisfied by the assessee. It could be said that the investments were made in furtherance of business interest and the ratio of decision of Hon’ble Supreme Court in the case of CIT V/s S.A. Builders (288 ITR 1) would favor the case of the assessee. In this decision, it was held by Hon’ble Court that once nexus was established between the expenditure and the purpose of the business, which need not necessarily be the business of the assessee itself, revenue could not disallow the claim assuming what was reasonable. In fact, Tribunal in ITA No.232/Chny/2022…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

Appeal stands dismissed

ITA 84/CHNY/2023[2008-09]Status: DisposedITAT Chennai10 Jan 2024AY 2008-09

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.84/Chny/2023 (िनधा)रण वष) / Assessment Year: 2008-09) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 115JSection 143(3)Section 14ASection 35Section 35(3)Section 43B

…the test of commercial expediency, in our opinion, was duly satisfied by the assessee. It could be said that the investments were made in furtherance of business interest and the ratio of decision of Hon’ble Supreme Court in the case of CIT V/s S.A. Builders (288 ITR 1) would favor the case of the assessee. In this decision, it was held by Hon’ble Court that once nexus was established between the expenditure and the purpose of the business, which need not necessarily be the business of the assessee itself, revenue could not disallow the claim assuming what was reasonable. In fact, Tribunal in ITA No.232/Chny/2022…

M/S Southern Petrochemical Industries Corporation Limited, Chennai vs. The ITO, Corportion Ward-3(1), Chennai

The appeal stand allowed in terms of our above order

ITA 388/CHNY/2023[2010-11]Status: DisposedITAT Chennai10 Jan 2024AY 2010-11

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.388/Chny/2023 (िनधा)रण वष) / Assessment Year: 2010-11) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)

…the test of commercial expediency, in our opinion, was duly satisfied by the assessee. It could be said that the investments were made in furtherance of business interest and the ratio of decision of Hon’ble Supreme Court in the case of CIT V/s S.A. Builders (288 ITR 1) would favor the case of the assessee. In this decision, it was held by Hon’ble Court that once nexus was established between the expenditure and the purpose of the business, which need not necessarily be the business of the assessee itself, revenue could not disallow the claim assuming what was reasonable. In fact, Tribunal in ITA No.232/Chny/2022…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

The appeal stands partly allowed in terms of our above order

ITA 210/CHNY/2023[2007-08]Status: DisposedITAT Chennai10 Jan 2024AY 2007-08

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.210/Chny/2023 (िनधा)रण वष) / Assessment Year: 2007-08) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 115JSection 143(3)Section 28Section 36(1)(vii)

…the test of commercial expediency, in our opinion, was duly satisfied by the assessee. It could be said that the investments were made in furtherance of business interest and the ratio of decision of Hon’ble Supreme Court in the case of CIT V/s S.A. Builders (288 ITR 1) would favor the case of the assessee. In this decision, it was held by Hon’ble Court that once nexus was established between the expenditure and the purpose of the business, which need not necessarily be the business of the assessee itself, revenue could not disallow the claim assuming what was reasonable. In fact, Tribunal in ITA No.232/Chny/2022…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

The appeal stands partly allowed

ITA 209/CHNY/2023[2006-07]Status: DisposedITAT Chennai10 Jan 2024AY 2006-07

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1.आयकरअपील सं./ Ita No.208/Chny/2023 (िनधा*रण वष* / Assessment Year: 2006-07) & 2.आयकरअपील सं./ Ita No.209/Chny/2023 (िनधा*रण वष* / Assessment Year: 2006-07) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)

…the test of commercial expediency, in our opinion, was duly satisfied by the assessee. It could be said that the investments were made in furtherance of business interest and the ratio of decision of Hon’ble Supreme Court in the case of CIT V/s S.A. Builders (288 ITR 1) would favor the case of the assessee. In this decision, it was held by Hon’ble Court that once nexus was established between the expenditure and the purpose of the business, which need not necessarily be the business of the assessee itself, revenue could not disallow the claim assuming what was reasonable. In fact, Tribunal in ITA No.232/Chny/2022…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

The appeal stands partly allowed

ITA 208/CHNY/2023[2006-07]Status: DisposedITAT Chennai10 Jan 2024AY 2006-07

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1.आयकरअपील सं./ Ita No.208/Chny/2023 (िनधा*रण वष* / Assessment Year: 2006-07) & 2.आयकरअपील सं./ Ita No.209/Chny/2023 (िनधा*रण वष* / Assessment Year: 2006-07) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)

…the test of commercial expediency, in our opinion, was duly satisfied by the assessee. It could be said that the investments were made in furtherance of business interest and the ratio of decision of Hon’ble Supreme Court in the case of CIT V/s S.A. Builders (288 ITR 1) would favor the case of the assessee. In this decision, it was held by Hon’ble Court that once nexus was established between the expenditure and the purpose of the business, which need not necessarily be the business of the assessee itself, revenue could not disallow the claim assuming what was reasonable. In fact, Tribunal in ITA No.232/Chny/2022…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

The appeal stands partly allowed

ITA 207/CHNY/2023[2005-06]Status: DisposedITAT Chennai10 Jan 2024AY 2005-06

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1.आयकरअपील सं./ Ita No.206/Chny/2023 (िनधा*रण वष* / Assessment Year: 2005-06) & 2.आयकरअपील सं./ Ita No.207/Chny/2023 (िनधा*रण वष* / Assessment Year: 2005-06) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)Section 43B

…he test of commercial expediency, in our opinion, was duly satisfied by the assessee. It could be said that the investments were made in furtherance of business interest and the ratio of decision of Hon’ble Supreme Court in the case of CIT V/s S.A. Builders (288 ITR 1) would favor the case of the assessee. In this decision, it was held by Hon’ble Court that once nexus was established between the expenditure and the purpose of the business, which need not necessarily be the business of the assessee itself, revenue could not disallow the claim assuming what was reasonable. In fact, Tribunal in ITA No.232/Chny/2022…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

The appeal stands partly allowed

ITA 206/CHNY/2023[2005-06]Status: DisposedITAT Chennai10 Jan 2024AY 2005-06

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1.आयकरअपील सं./ Ita No.206/Chny/2023 (िनधा*रण वष* / Assessment Year: 2005-06) & 2.आयकरअपील सं./ Ita No.207/Chny/2023 (िनधा*रण वष* / Assessment Year: 2005-06) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)Section 43B

…he test of commercial expediency, in our opinion, was duly satisfied by the assessee. It could be said that the investments were made in furtherance of business interest and the ratio of decision of Hon’ble Supreme Court in the case of CIT V/s S.A. Builders (288 ITR 1) would favor the case of the assessee. In this decision, it was held by Hon’ble Court that once nexus was established between the expenditure and the purpose of the business, which need not necessarily be the business of the assessee itself, revenue could not disallow the claim assuming what was reasonable. In fact, Tribunal in ITA No.232/Chny/2022…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

Appeal stands dismissed

ITA 205/CHNY/2023[2004-05]Status: DisposedITAT Chennai10 Jan 2024AY 2004-05

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1.आयकरअपील सं./ Ita No.204/Chny/2023 (िनधा*रण वष* / Assessment Year: 2004-05) & 2.आयकरअपील सं./ Ita No.205/Chny/2023 (िनधा*रण वष* / Assessment Year: 2004-05) M/S. Southern Petrochemical Acit / Ito बनाम Industries Corporation Limited Corporate Circle-6(2) / 88, Spic House, Mount Road, Guindy, Corporate Ward-3(1) / Vs. Chennai-600 032. Chennai-600 034. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 115JSection 143(3)Section 194CSection 41(1)Section 43B

…he test of commercial expediency, in our opinion, was duly satisfied by the assessee. It could be said that the investments were made in furtherance of business interest and the ratio of decision of Hon’ble Supreme Court in the case of CIT V/s S.A. Builders (288 ITR 1) would favor the case of the assessee. In this decision, it was held by Hon’ble Court that once nexus was established between the expenditure and the purpose of the business, which need not necessarily be the business of the assessee itself, revenue could not disallow the claim assuming what was reasonable. In fact, Tribunal in ITA No.232/Chny/2022…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Chennai

Appeal stands dismissed

ITA 204/CHNY/2023[2004-05]Status: DisposedITAT Chennai10 Jan 2024AY 2004-05

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1.आयकरअपील सं./ Ita No.204/Chny/2023 (िनधा*रण वष* / Assessment Year: 2004-05) & 2.आयकरअपील सं./ Ita No.205/Chny/2023 (िनधा*रण वष* / Assessment Year: 2004-05) M/S. Southern Petrochemical Acit / Ito बनाम Industries Corporation Limited Corporate Circle-6(2) / 88, Spic House, Mount Road, Guindy, Corporate Ward-3(1) / Vs. Chennai-600 032. Chennai-600 034. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 10-01-2024 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 115JSection 143(3)Section 194CSection 41(1)Section 43B

…he test of commercial expediency, in our opinion, was duly satisfied by the assessee. It could be said that the investments were made in furtherance of business interest and the ratio of decision of Hon’ble Supreme Court in the case of CIT V/s S.A. Builders (288 ITR 1) would favor the case of the assessee. In this decision, it was held by Hon’ble Court that once nexus was established between the expenditure and the purpose of the business, which need not necessarily be the business of the assessee itself, revenue could not disallow the claim assuming what was reasonable. In fact, Tribunal in ITA No.232/Chny/2022…

Southern Petrochemical Industries Corporation Ltd., Chennai vs. ITO, Corporate Ward-3(1), Chennai

In the result, the appeal stands partly allowed in terms of our above order

ITA 170/CHNY/2023[2003-04]Status: DisposedITAT Chennai09 Jan 2024AY 2003-04

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.170/Chny/2023 (िनधा)रण वष) / Assessment Year: 2003-04) M/S. Southern Petrochemical Income Tax Officer बनाम Industries Corporation Limited Corporate Ward-3(1) 88, Spic House, Mount Road, Guindy, Chennai-600 034. / Vs. Chennai-600 032. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacs-4668-K (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri R. Vijayaraghavan & Shri Saroj Kumar Parida (Advocates)-Ld. Ars " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit) & Shri Ar V Sreenivasan (Addl. Cit)-Ld. Drs सुनवाईकीतारीख/Date Of Hearing : 16-10-2023 घोषणाकीतारीख /Date Of Pronouncement : 09-01-2024 आदेश / O R D E R

For Appellant: Shri R. Vijayaraghavan & Shri Saroj KumarFor Respondent: Shri Nilay Baran Som (CIT) &
Section 143(3)

…m of Rs.16.78 Crores to its sister concern viz. M/s SPEL semiconductor Ltd. Pursuant to revisionary directions, Ld. AO computed disallowance of Rs.129.94 Lacs rejecting assessee’s reliance on the decision of Hon’ble Supreme Court in the case of S.A. Builders (288 ITR 1) wherein it was held that advancing loans to sister concerns for commercial expediency would be business expenditure. Another argument was that the assessee claimed only net interest expenditure after crediting interest income of Rs.139.96 Lacs and therefore, the question of impugned disallowance of proportionate interest expenses would not arise.…

ACIT Circle 5(1)(1), Mumbai vs. M/S Essar Shipping Limited, Mumbai

In the result, appeal filed by the learned AO is dismissed

ITA 2951/MUM/2022[2015-2016]Status: DisposedITAT Mumbai09 Jan 2024AY 2015-2016

Bench: Shri Prashant Maharishi, Am & Shri Narender Kumar Choudhry, Jm M/S Essar Shipping Limited Acit, Circle 5(1)(1) Essar House, 11, R.No.568, Aaykar Bhavan, Vs. Kk Marg, Mahalaxmi, M.K. Road, Mumbai-400 020 Mumbai-400 034 (Appellant) (Respondent) Pan No. Aacce3707D

For Appellant: Shri Rishav Patawari, ARFor Respondent: Shri Manoj Sinha, CIT DR
Section 115VSection 143Section 144CSection 28Section 43Section 92Section 92CSection 92F

…IN THE INCOME TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI NARENDER KUMAR CHOUDHRY, JM M/s Essar Shipping Limited ACIT, Circle 5(1)(1) Essar House, 11, r.no.568, Aaykar Bhavan, Vs. KK Marg, Mahalaxmi, M.K. Road, Mumbai-400 020 Mumbai-400 034 (Appellant) (Respondent) PAN No. AACCE3707D Assessee by : Shri Rishav Patawari, AR Revenue by : Shri Manoj Sinha, CIT DR Date of hearing: 20.10.2023 Date of pronouncement : 09.01.2024 O R D E R PER PRASHANT MAHARISHI, AM: 01. This appeal is filed by The Assistant Commissioner Of Income Tax, Circle – 5 (1) (1), Mumbai (The Learned AO)…

ACIT Central-2 Bhopal, Bhopal vs. M/S M Ahuja Project ( India) P Ltd, Raipur

In the result, the appeals of the assessee are allowed and appeals of revenue are dismissed

ITA 69/IND/2022[2015-16]Status: DisposedITAT Indore20 Dec 2023AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 36(1)(iii)

…the capital of the partners/proprietor being more than the interest free short term advances, has in the case of CIT v. Vijay Solvex Ltd. [2015] 59 taxmann.com 294 (Raj.) while relying on the judgment rendered in (a) S.A. Builders Ltd. v. CIT (Appeals) [2007] 288 ITR 1/158 Taxman 74 (SC); (b), Munjal Sales Corpn. v. CIT [2008] 298 ITR 298/168 Taxman 43 (SC); (c), CIT V. Radico Khaitan Ltd. [2005] 274 ITR 354/142 Taxman 681 (All); (d), CIT v. Dalmia Cement (P.) Ltd. [2002] 254 ITR 377/121 Taxman 706 (Delhi); (e), CIT V. Britannia Industries Ltd. [2006] 280 ITR 525/ [2005] 148 Taxman 654 (Cal.) and (f) CIT v. Motor…

The ACIT, (Central)-II, Bhopal vs. M/S. M. Ahuja Project (India) Pvt. Ltd., Raipur

In the result, the appeals of the assessee are allowed and appeals of revenue are dismissed

ITA 68/IND/2022[20214-15]Status: DisposedITAT Indore20 Dec 2023

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 36(1)(iii)

…the capital of the partners/proprietor being more than the interest free short term advances, has in the case of CIT v. Vijay Solvex Ltd. [2015] 59 taxmann.com 294 (Raj.) while relying on the judgment rendered in (a) S.A. Builders Ltd. v. CIT (Appeals) [2007] 288 ITR 1/158 Taxman 74 (SC); (b), Munjal Sales Corpn. v. CIT [2008] 298 ITR 298/168 Taxman 43 (SC); (c), CIT V. Radico Khaitan Ltd. [2005] 274 ITR 354/142 Taxman 681 (All); (d), CIT v. Dalmia Cement (P.) Ltd. [2002] 254 ITR 377/121 Taxman 706 (Delhi); (e), CIT V. Britannia Industries Ltd. [2006] 280 ITR 525/ [2005] 148 Taxman 654 (Cal.) and (f) CIT v. Motor…

M/S. M. Ahuja Project (India) Pvt. Ltd., Raipur vs. The ACIT, (Central)-II, Bhopal

In the result, the appeals of the assessee are allowed and appeals of revenue are dismissed

ITA 49/IND/2022[2015-16]Status: DisposedITAT Indore20 Dec 2023AY 2015-16

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 36(1)(iii)

…the capital of the partners/proprietor being more than the interest free short term advances, has in the case of CIT v. Vijay Solvex Ltd. [2015] 59 taxmann.com 294 (Raj.) while relying on the judgment rendered in (a) S.A. Builders Ltd. v. CIT (Appeals) [2007] 288 ITR 1/158 Taxman 74 (SC); (b), Munjal Sales Corpn. v. CIT [2008] 298 ITR 298/168 Taxman 43 (SC); (c), CIT V. Radico Khaitan Ltd. [2005] 274 ITR 354/142 Taxman 681 (All); (d), CIT v. Dalmia Cement (P.) Ltd. [2002] 254 ITR 377/121 Taxman 706 (Delhi); (e), CIT V. Britannia Industries Ltd. [2006] 280 ITR 525/ [2005] 148 Taxman 654 (Cal.) and (f) CIT v. Motor…