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 367,368 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

M/S.Golflinks Software Park (P) Ltd., Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

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

ITA 336/BANG/2017[2010-11]Status: DisposedITAT Bangalore10 May 2019AY 2010-11

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri G. Sitaram, CAFor Respondent: Shri Pradeep Kumar, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 28Section 36(1)(iii)

…he test of “borrowed for the purpose of business of the Assessee” and interest expenditure will not be allowed as a deduction. The law on this issue is settled after the Hon’ble Supreme Court judgment in the case of S. A. Builders Ltd. v. CIT (Appeals) [2007] 288 ITR 1 (SC), in which the concept of “commercial expediency” was used. Thus, where the funds of the business a diverted for interest free loans the main criteria for permissibility of interest on those funds are based on whether it was for commercial expediency or not. The phrase “commercial expediency” has following important traits as purpose as is expe…

Sri.Ratan Babulal Lath, Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

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

ITA 335/BANG/2017[2009-10]Status: DisposedITAT Bangalore10 May 2019AY 2009-10

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri G. Sitaram, CAFor Respondent: Shri Pradeep Kumar, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 28Section 36(1)(iii)

…he test of “borrowed for the purpose of business of the Assessee” and interest expenditure will not be allowed as a deduction. The law on this issue is settled after the Hon’ble Supreme Court judgment in the case of S. A. Builders Ltd. v. CIT (Appeals) [2007] 288 ITR 1 (SC), in which the concept of “commercial expediency” was used. Thus, where the funds of the business a diverted for interest free loans the main criteria for permissibility of interest on those funds are based on whether it was for commercial expediency or not. The phrase “commercial expediency” has following important traits as purpose as is expe…

M/S.Golflinks Software Park (P) Ltd., Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

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

ITA 334/BANG/2017[2008-09]Status: DisposedITAT Bangalore10 May 2019AY 2008-09

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri G. Sitaram, CAFor Respondent: Shri Pradeep Kumar, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 28Section 36(1)(iii)

…he test of “borrowed for the purpose of business of the Assessee” and interest expenditure will not be allowed as a deduction. The law on this issue is settled after the Hon’ble Supreme Court judgment in the case of S. A. Builders Ltd. v. CIT (Appeals) [2007] 288 ITR 1 (SC), in which the concept of “commercial expediency” was used. Thus, where the funds of the business a diverted for interest free loans the main criteria for permissibility of interest on those funds are based on whether it was for commercial expediency or not. The phrase “commercial expediency” has following important traits as purpose as is expe…

M/S.Golflinks Software Park (P) Ltd., Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

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

ITA 333/BANG/2017[2007-2008]Status: DisposedITAT Bangalore10 May 2019AY 2007-2008

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri G. Sitaram, CAFor Respondent: Shri Pradeep Kumar, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 28Section 36(1)(iii)

…he test of “borrowed for the purpose of business of the Assessee” and interest expenditure will not be allowed as a deduction. The law on this issue is settled after the Hon’ble Supreme Court judgment in the case of S. A. Builders Ltd. v. CIT (Appeals) [2007] 288 ITR 1 (SC), in which the concept of “commercial expediency” was used. Thus, where the funds of the business a diverted for interest free loans the main criteria for permissibility of interest on those funds are based on whether it was for commercial expediency or not. The phrase “commercial expediency” has following important traits as purpose as is expe…

Alcatel-Lucent India Ltd., Gurgaon vs. Addl.CIT, Special Range-1, New Delhi

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

ITA 6979/DEL/2017[2013-14]Status: DisposedITAT Delhi09 May 2019AY 2013-14

Bench: Shri H.S. Sidhu & Shri O.P. Kantassessment Year: 2013-14 M/S. Alcatel-Lucent India Vs. Addl. Cit, Ltd., Special Range-1, New Delhi Dlf Cyber Greens, 14 & 15Th Floor, Tower C, Phase-Iii, Dlf City, Gurgaon Pan :Aacca8667N (Appellant) (Respondent) Appellant By Shri Deepak Chopra, Adv.; Ms. Manasvini Bajpai, Adv.; & Shri. Ankul Goyal, Adv. Respondent By Shri Sanjay I. Bara, Cit(Dr)

Section 143(3)Section 144CSection 144C(10)Section 92C

…justifiable on the grounds of "commercial expediency" and “used for the purpose of Business" has not been controverted by the AO. The Hon'ble Supreme Court in the case of M/s S A Builders v. Limited v. Commissioner of Income-Tax (Appeals) and Another {(2007) 288 ITR 1 (SC)J has observed as under: “In order to decide whether interest on funds borrowed by the Appellant to give an interest free loan to a sister concern (e.g. a subsidiary of the Appellant) should be allowed as a deduction under section 36(1) (iii) of the Income Tax Act, 1961 one has to enquire whether the loan was given by the Appellant as a measure…

Jas Forwarding Worldwide Pvt. Ltd., New Delhi vs. DCIT, New Delhi

The appeal of the Assessee is allowed whereas the appeal of the Revenue is dismissed

ITA 3296/DEL/2011[2007-08]Status: DisposedITAT Delhi08 May 2019AY 2007-08

Bench: Shri Amit Shukla & Shri L.P. Sahuasstt. Year:2007-08

For Respondent: Shri Robin Rawan, Sr. DR
Section 143(2)Section 143(3)Section 40

…A) have not doubted the genuineness of the expenses. In fact, even the nature of the expenses stands accepted. Thus, the domain of commercial expediency cannot be entered into. We find that this issue in principle is covered in the case of S.A. Builders (SC) (288 ITR 1) and is directly applicable on the facts of the present case as the evidences have already been filed by the Assessee and as stated above, the expenses being reimbursed are regular business expenses. Thus, the appeal filed by the Assessee succeeds. 31. Accordingly, the appeal of the Assessee is allowed whereas the appeal of the Revenue is dismissed…

DCIT, New Delhi vs. M/S Jas Forwarding World Pvt. Ltd., New Delhi

The appeal of the Assessee is allowed whereas the appeal of the Revenue is dismissed

ITA 3222/DEL/2011[2007-08]Status: DisposedITAT Delhi08 May 2019AY 2007-08

Bench: Shri Amit Shukla & Shri L.P. Sahuasstt. Year:2007-08

For Respondent: Shri Robin Rawan, Sr. DR
Section 143(2)Section 143(3)Section 40

…A) have not doubted the genuineness of the expenses. In fact, even the nature of the expenses stands accepted. Thus, the domain of commercial expediency cannot be entered into. We find that this issue in principle is covered in the case of S.A. Builders (SC) (288 ITR 1) and is directly applicable on the facts of the present case as the evidences have already been filed by the Assessee and as stated above, the expenses being reimbursed are regular business expenses. Thus, the appeal filed by the Assessee succeeds. 31. Accordingly, the appeal of the Assessee is allowed whereas the appeal of the Revenue is dismissed…

ACIT, Circle - 35, Kolkata vs. M/S. Kwality Steel Processors, Kolkata

In the result, the appeal of the Revenue is partly allowed

ITA 1411/KOL/2017[2014-15]Status: DisposedITAT Kolkata03 May 2019AY 2014-15

Bench: Sh. J.Sudhakar Reddy & Sh.S.S.Viswanethra Ravivs M/S. Kwality Steel Processors, Acit, Circle-35, 4, India Exchange Place, 2Nd Floor, Kolkata-700107. Kolkata-700001. Pan-Aaefk2197G (Appellant) (Respondent) Appellant By Sh.C.J.Singh, Jcit Sr.Dr Respondent By Sh. Miraj D.Shah, Fca Date Of Hearing 05.02.2019 Date Of Pronouncement 03.05.2019

Section 36(1)

…IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH “A”, KOLKATA BEFORE SH. J.SUDHAKAR REDDY, ACCOUNTANT MEMBER & SH.S.S.VISWANETHRA RAVI, JUDICIAL MEMBER vs M/s. Kwality Steel Processors, ACIT, Circle-35, 4, India Exchange Place, 2nd Floor, Kolkata-700107. Kolkata-700001. PAN-AAEFK2197G (Appellant) (Respondent) Appellant by Sh.C.J.Singh, JCIT Sr.DR Respondent by Sh. Miraj D.Shah, FCA Date of Hearing 05.02.2019 Date of Pronouncement 03.05.2019 ORDER PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER This appeal filed by the Revenue against the order dated 27.03.2017 passed by CIT(A)-10, Kolkata for AY 2014-15. 2. Ground…

ACIT, Cir-2(2), Kolkata vs. M/S Tcg Facilities Management Pvt Ltd., Kolkata

In the result, the appeal of the assessee is allowed for statistical purpose and the appeal of the revenue is dismissed

ITA 1648/KOL/2016[2010-11]Status: DisposedITAT Kolkata03 May 2019AY 2010-11

Bench: Shri A.T.Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.1631/Kol/2016 ("नधा"रणवष" / Assessment Year:2010-11)

For Appellant: Shri A.K. Tibrewal, FCAFor Respondent: Shri Shankar Halder, JCIT, Sr.DR
Section 143(3)

…r such investment could be disallowed. In support of the aforesaid contention the Appellant Company refers to and relies on the judgment of Hon'ble Supreme Court in the case of S. A. Builders Ltd. vs. CIT(A), Chandigarh [2007] 158 TAXMAN 74 (SC) equivalent to 288 ITR 1 (SC). The Hon'ble Supreme Court held that the interest borrowed for investment in subsidiary or sister concern is allowable deduction under section 36(1)(iii) of the Act and 37(1)of the Act. 7.7 In view of the above, the suo moto disallowance of Rs. 49,76,484/- made by the Appellant be allowed as these cannot be capitalized and are in the nature o…

Tcg Facilities Management Services Pvt Ltd., Kolkata vs. ACIT, Circle-2(2), Kolkata

In the result, the appeal of the assessee is allowed for statistical purpose and the appeal of the revenue is dismissed

ITA 1631/KOL/2016[2010-11]Status: DisposedITAT Kolkata03 May 2019AY 2010-11

Bench: Shri A.T.Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.1631/Kol/2016 ("नधा"रणवष" / Assessment Year:2010-11)

For Appellant: Shri A.K. Tibrewal, FCAFor Respondent: Shri Shankar Halder, JCIT, Sr.DR
Section 143(3)

…r such investment could be disallowed. In support of the aforesaid contention the Appellant Company refers to and relies on the judgment of Hon'ble Supreme Court in the case of S. A. Builders Ltd. vs. CIT(A), Chandigarh [2007] 158 TAXMAN 74 (SC) equivalent to 288 ITR 1 (SC). The Hon'ble Supreme Court held that the interest borrowed for investment in subsidiary or sister concern is allowable deduction under section 36(1)(iii) of the Act and 37(1)of the Act. 7.7 In view of the above, the suo moto disallowance of Rs. 49,76,484/- made by the Appellant be allowed as these cannot be capitalized and are in the nature o…

ACIT 16(1), Mumbai vs. Tips Industries Ltd, Mumbai

In the result, the appeal filed by revenue in ITA no

ITA 6291/MUM/2017[2012-13]Status: DisposedITAT Mumbai03 May 2019AY 2012-13

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.6194 To 6196/Mum/2017 (नििाारण वर्ा / Assessment Year: 2011-12, 2012-13 & 2013-14) बिाम/ M/S. Tips Industries Ltd., Acit 11(1) 601, Durga Chambers, Room No. 439, 6T H Floor, Linking Road, Aayakar Bhawan V. Khar West, M.K.Marg Mumbai 400054 Mumbai-400020 स्थायी ऱेखा सं./ Pan : Aaact5284A

For Appellant: Shri. Deepak TralshawalaFor Respondent: Shri. O.P Meena (DR)
Section 143(3)Section 36(1)(iii)

…आयकर अपीऱीय अधिकरण “E” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER आयकर अपीऱ सं./I.T.A. No.6194 to 6196/Mum/2017 (नििाारण वर्ा / Assessment Year: 2011-12, 2012-13 and 2013-14) बिाम/ M/s. Tips Industries Ltd., ACIT 11(1) 601, Durga Chambers, Room No. 439, 6t h Floor, Linking Road, Aayakar Bhawan v. Khar West, M.K.Marg Mumbai 400054 Mumbai-400020 स्थायी ऱेखा सं./ PAN : AAACT5284A आयकर अपीऱ सं./ I.T.A. No. 6291/Mum/2017 (नििाारण वर्ा / Assessment Year: 2012-13) बिाम/ ACIT 16(1) M/s. Tips Industries Lt…

Tips Industries Ltd, Mumbai vs. ACIT 16(1), Mumbai

In the result, the appeal filed by revenue in ITA no

ITA 6196/MUM/2017[2013-14]Status: DisposedITAT Mumbai03 May 2019AY 2013-14

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.6194 To 6196/Mum/2017 (नििाारण वर्ा / Assessment Year: 2011-12, 2012-13 & 2013-14) बिाम/ M/S. Tips Industries Ltd., Acit 11(1) 601, Durga Chambers, Room No. 439, 6T H Floor, Linking Road, Aayakar Bhawan V. Khar West, M.K.Marg Mumbai 400054 Mumbai-400020 स्थायी ऱेखा सं./ Pan : Aaact5284A

For Appellant: Shri. Deepak TralshawalaFor Respondent: Shri. O.P Meena (DR)
Section 143(3)Section 36(1)(iii)

…आयकर अपीऱीय अधिकरण “E” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER आयकर अपीऱ सं./I.T.A. No.6194 to 6196/Mum/2017 (नििाारण वर्ा / Assessment Year: 2011-12, 2012-13 and 2013-14) बिाम/ M/s. Tips Industries Ltd., ACIT 11(1) 601, Durga Chambers, Room No. 439, 6t h Floor, Linking Road, Aayakar Bhawan v. Khar West, M.K.Marg Mumbai 400054 Mumbai-400020 स्थायी ऱेखा सं./ PAN : AAACT5284A आयकर अपीऱ सं./ I.T.A. No. 6291/Mum/2017 (नििाारण वर्ा / Assessment Year: 2012-13) बिाम/ ACIT 16(1) M/s. Tips Industries Lt…

Tips Industries Ltd, Mumbai vs. ACIT 16(1), Mumbai

In the result, the appeal filed by revenue in ITA no

ITA 6195/MUM/2017[2012-13]Status: DisposedITAT Mumbai03 May 2019AY 2012-13

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.6194 To 6196/Mum/2017 (नििाारण वर्ा / Assessment Year: 2011-12, 2012-13 & 2013-14) बिाम/ M/S. Tips Industries Ltd., Acit 11(1) 601, Durga Chambers, Room No. 439, 6T H Floor, Linking Road, Aayakar Bhawan V. Khar West, M.K.Marg Mumbai 400054 Mumbai-400020 स्थायी ऱेखा सं./ Pan : Aaact5284A

For Appellant: Shri. Deepak TralshawalaFor Respondent: Shri. O.P Meena (DR)
Section 143(3)Section 36(1)(iii)

…आयकर अपीऱीय अधिकरण “E” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER आयकर अपीऱ सं./I.T.A. No.6194 to 6196/Mum/2017 (नििाारण वर्ा / Assessment Year: 2011-12, 2012-13 and 2013-14) बिाम/ M/s. Tips Industries Ltd., ACIT 11(1) 601, Durga Chambers, Room No. 439, 6t h Floor, Linking Road, Aayakar Bhawan v. Khar West, M.K.Marg Mumbai 400054 Mumbai-400020 स्थायी ऱेखा सं./ PAN : AAACT5284A आयकर अपीऱ सं./ I.T.A. No. 6291/Mum/2017 (नििाारण वर्ा / Assessment Year: 2012-13) बिाम/ ACIT 16(1) M/s. Tips Industries Lt…

Tips Industries Ltd, Mumbai vs. ACIT 11(1), Mumbai

In the result, the appeal filed by revenue in ITA no

ITA 6194/MUM/2017[2011-12]Status: DisposedITAT Mumbai03 May 2019AY 2011-12

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.6194 To 6196/Mum/2017 (नििाारण वर्ा / Assessment Year: 2011-12, 2012-13 & 2013-14) बिाम/ M/S. Tips Industries Ltd., Acit 11(1) 601, Durga Chambers, Room No. 439, 6T H Floor, Linking Road, Aayakar Bhawan V. Khar West, M.K.Marg Mumbai 400054 Mumbai-400020 स्थायी ऱेखा सं./ Pan : Aaact5284A

For Appellant: Shri. Deepak TralshawalaFor Respondent: Shri. O.P Meena (DR)
Section 143(3)Section 36(1)(iii)

…आयकर अपीऱीय अधिकरण “E” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER आयकर अपीऱ सं./I.T.A. No.6194 to 6196/Mum/2017 (नििाारण वर्ा / Assessment Year: 2011-12, 2012-13 and 2013-14) बिाम/ M/s. Tips Industries Ltd., ACIT 11(1) 601, Durga Chambers, Room No. 439, 6t h Floor, Linking Road, Aayakar Bhawan v. Khar West, M.K.Marg Mumbai 400054 Mumbai-400020 स्थायी ऱेखा सं./ PAN : AAACT5284A आयकर अपीऱ सं./ I.T.A. No. 6291/Mum/2017 (नििाारण वर्ा / Assessment Year: 2012-13) बिाम/ ACIT 16(1) M/s. Tips Industries Lt…

Solace Capital Services Pvt. Ltd, Ahmedabad vs. Income Tax Officer, Ward-4(1)(2), Ahmedabad

In the result, appeal of the assessee is partly allowed

ITA 1784/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad02 May 2019AY 2012-13

Bench: Shri Rajpal Yadavआयकर अपील सं./ Ita No. 1784/Ahd/2017 "नधा"रण वष"/Assessment Year: 2012-2013 Solace Capital Services P.Ltd. Ito, Ward-4(1)(2) O/702, Chandabala Vs Ahmedabad. Opp: Suvidha Shopping Centre Paldi, Ahmedabad 380 007. Pan : Aaocs 7840 P अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri M.S.Chhajed, Ar Revenue By : Shri B.L.Meena, Sr.Dr

For Appellant: Shri M.S.Chhajed, ARFor Respondent: Shri B.L.Meena, Sr.DR
Section 154

…ssee, therefore, there should not be any interest expenditure require to be disallowed from the claim of the assessee. For this proposition, I am fortified by the decision of Hon’ble Bombay High Court in the case of Cit Vs. Reliance Utilities and Powers Ltd., 288 ITR 1 (Bom), I allow the appeal of the assessee and delete disallowance. 5. In the result, appeal of the assessee is partly allowed. Pronounced in the Open Court on 2nd May, 2019. (RAJPAL YADAV) JUDICIAL MEMBER Ahmedabad; Dated, 02/05/2019…

DCIT Cir. 7(3)(2), Mumbai vs. Gujarat Glass Ltd. (Now Known As M/S. Piramal Glass Ltd.), Mumbai

In the result, Revenue’s appeal is dismissed

ITA 4777/MUM/2016[2005-06]Status: DisposedITAT Mumbai30 Apr 2019AY 2005-06

Bench: Shri Saktijit Dey & Shri Rajesh Kumar

…IN THE INCOME TAX APPELLATE TRIBUNAL “J” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA no. 4777/Mum./2016 (Assessment Year : 2005–06) Dy. Commissioner of Income Tax ……………. Appellant Circle–7(3)(2), Mumbai v/s Gujarat Glass Ltd. (Now known as Piramal Glass Ltd.) Peninsula Corporate Park ……………. Respondent Piramal Tower, Ganpatrao Kadam Marg Lower Parel, Mumbai 400 013 PAN – AABCG0093R ITA no. 4778/Mum./2016 (Assessment Year : 2007–08) Dy. Commissioner of Income Tax ……………. Appellant Circle–7(3)(2), Mumbai v/s Gujarat Glass Ltd. (Now known as Piramal Glass…

The Peerless General Finance & Investment Co. Ltd., Kolkata vs. DCIT, Circle - 3(1), Kolkata

In the result, appeal of the assessee in ITA No

ITA 938/KOL/2018[2010-11]Status: DisposedITAT Kolkata24 Apr 2019AY 2010-11

Bench: Shri A.T. Varkey, J.M. & Dr.A.L.Saini, A.M.)

For Appellant: Shri S.K. Tulsiyan, Advocate, ld.ARFor Respondent: Shri A.K. Singh, CIT, ld. DR
Section 143(3)Section 14ASection 37(1)Section 40A(2)(b)Section 48

…any other business. Hence it floated a few subsidiary companies for the purpose of other businesses and therefore, the loan should be treated as given for business purposes and in view of the Hon 'ble Supreme Court's decision in the case of S.A Builders Ltd. 288 ITR 1, no disallowance of interest is called for on account of alleged diversion of fund collected from the certificate holders." However, the assessing officer rejected the contention of the assessee and the proportionate disallowance of interest on said loan calculated at the rate of 5%· (which is given by the assessee to its certificate holders) work…

The Peerless General Finance & Investment Co. Ltd., Kolkata vs. DCIT, Circle - 3(1), Kolkata

In the result, appeal of the assessee in ITA No

ITA 937/KOL/2018[2010-11]Status: DisposedITAT Kolkata24 Apr 2019AY 2010-11

Bench: Shri A.T. Varkey, J.M. & Dr.A.L.Saini, A.M.)

For Appellant: Shri S.K. Tulsiyan, Advocate, ld.ARFor Respondent: Shri A.K. Singh, CIT, ld. DR
Section 143(3)Section 14ASection 37(1)Section 40A(2)(b)Section 48

…any other business. Hence it floated a few subsidiary companies for the purpose of other businesses and therefore, the loan should be treated as given for business purposes and in view of the Hon 'ble Supreme Court's decision in the case of S.A Builders Ltd. 288 ITR 1, no disallowance of interest is called for on account of alleged diversion of fund collected from the certificate holders." However, the assessing officer rejected the contention of the assessee and the proportionate disallowance of interest on said loan calculated at the rate of 5%· (which is given by the assessee to its certificate holders) work…

Shriram Krishnaji Surve, Satara vs. Assistant Commissioner of Income Tax, Satara

In the result, the appeal of Revenue in ITA No

ITA 979/PUN/2017[2011-12]Status: DisposedITAT Pune23 Apr 2019AY 2011-12

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm

For Appellant: Shri M.K. KulkarniFor Respondent: Dr. Vivek Aggarwal &
Section 36(1)(iii)

…and interest free funds are available, a presumption would arise that investments are made out of interest free funds. In support of his contentions the ld. Counsel placed reliance on the following decisions : i. S.A. Builders Vs. Commissioner of Income Tax, 288 ITR 1 (SC); ii. Commissioner of Income Tax Vs. Reliance Utilities and Power Ltd., 313 ITR 340 (Bom.). 4. On the other hand Dr. Vivek Aggarwal representing the Department vehemently defended the impugned order. The ld. DR submitted that the assessee has failed to substantiate that the possession of studio flat was handed over to the assessee during the pe…

Assistant Commissioner of Income-Tax, Satara Circle, Satara vs. Shriram Krishnaji Surve, Satara

In the result, the appeal of Revenue in ITA No

ITA 2485/PUN/2017[2013-14]Status: DisposedITAT Pune23 Apr 2019AY 2013-14

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm

For Appellant: Shri M.K. KulkarniFor Respondent: Dr. Vivek Aggarwal &
Section 36(1)(iii)

…and interest free funds are available, a presumption would arise that investments are made out of interest free funds. In support of his contentions the ld. Counsel placed reliance on the following decisions : i. S.A. Builders Vs. Commissioner of Income Tax, 288 ITR 1 (SC); ii. Commissioner of Income Tax Vs. Reliance Utilities and Power Ltd., 313 ITR 340 (Bom.). 4. On the other hand Dr. Vivek Aggarwal representing the Department vehemently defended the impugned order. The ld. DR submitted that the assessee has failed to substantiate that the possession of studio flat was handed over to the assessee during the pe…