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 367,357 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. Shantikripa Industries Limited, Jaipur vs. Income Tax Officer, Jaipur

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

ITA 482/JPR/2018[2012-13]Status: DisposedITAT Jaipur26 Feb 2019AY 2012-13

Bench: Or At The Time Of Hearing.”

For Appellant: Shri S.L. Poddar (Adv.)For Respondent: Shri Anoop Singh (ACIT)

…iled. It is also a settled position of law that it is 9 M/S Shantikripa Industries Ltd. vs. ITO prerogative of a businessman to conduct his business in his own way and the revenue authorities cannot sit in the arm chair of an assessee as held in S.A. Builder 288 ITR 1(SC). e) Further, the case of the assessee is squarely covered by the judgment of Global Capital reported in 117 ITD 251(Del) wherein the coordinate Bench observed as under:- “On a careful consideration of the matter, we are of the view that the assessee is entitled to succeed and the disallowance of the interest is to be deleted. There is no dispu…

The Assistant Commissioner of Income Tax Circle-1, Vijayapur vs. M/S Sadashiv Sugars Limited, Bangalore

In the result, the appeal filed by the revenue is allowed for statistical purposes

ITA 1092/BANG/2018[2012-13]Status: DisposedITAT Bangalore22 Feb 2019AY 2012-13

Bench: Shri Arun Kumar Garodia & Shri Laliet Kumarassessment Year : 2012-13

For Appellant: Shri C.H. Sundar Rao, CIT (DR)For Respondent: None
Section 37(1)

…yments details, in which tax have been deducted on the payments and the same has been offered for taxation by the consultants. The AR had relied on the following decisions: Page 4 of 5 1. The Hon'ble Supreme Court in the case of DT Vs. S. A. Builders Limited 288 ITR 1. In the said decision, the Hon'ble Apex Court also agreed with the view taken by the Delhi High Court in the case of CIT Vs. Dalmia Cement (Bharat) Ltd 254 ITR 377. 2. The Apex Court in the case of Cit Vs. Rajendra Prasad Moody, Calcutta ETC. 8.3 Assessee had incurred the expenditure for the purpose of business. It was paid to unrelated party. TDS…

Brindavan Agencies (P) Ltd., New Delhi vs. ACIT, Circle- 5(1), New Delhi

In the result, the appeal of assessee is allowed

ITA 2677/DEL/2018[2014-15]Status: DisposedITAT Delhi22 Feb 2019AY 2014-15

Bench: Sh. H.S. Sidhuassessment Year: 2014-15

Section 142(1)Section 143(2)Section 143(3)

…Ltd. in the books of assessee; Leger a/c of Brindavan Entt. P Ltd. in the books of assessee; sub. to CIT(A) dated 23.11.2017 and sub. to CIT(A) dated 22.1.2018. To support his contention, he also relied upon the following case laws:- - CIT vs. SA Builders 288 ITR 1 (SC). - CIT vs. Tin Box Co. 260 ITR 537 (Del.) 4. On the contrary, Ld. DR heavily supported the order of the Ld. CIT(A) which does not need any interference. He stated that on perusal of P&L account of the assessee, AO noted that assessee has claimed interest expenses on others under the head of ‘Financial Coast’ of Rs. 26,22,008/-. Vide note sh…

Maxwell & Stuart Project Management Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, both the assessees appeals are allowed

ITA 650/DEL/2017[2012-13]Status: DisposedITAT Delhi22 Feb 2019AY 2012-13

Bench: Shri H.S. Sidhu

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 40Section 40A(2)(a)Section 40A(2)(b)

…sly, dispassionately without any bias of any kind from the view-point of a reasonable and honest person in business." 9. Likewise in Modi Revlon's case (supra), the Court additionally also took note of S.A. Builders Vs. Commissioner of Income Tax [2007] 289 ITR 26, where the Supreme Court had said that the Revenue ought not to place itself in the arm chair of businessman in dealing with such matters. Modi Revlon (supra) further emphasised that:- "25. This Court notices that in order to determine whether the payment is not sustainable, the AO has to first return a finding that the payment made is excessi…

Maxwell & Stuart Project Management Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, both the assessees appeals are allowed

ITA 649/DEL/2017[2011-12]Status: DisposedITAT Delhi22 Feb 2019AY 2011-12

Bench: Shri H.S. Sidhu

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 40Section 40A(2)(a)Section 40A(2)(b)

…sly, dispassionately without any bias of any kind from the view-point of a reasonable and honest person in business." 9. Likewise in Modi Revlon's case (supra), the Court additionally also took note of S.A. Builders Vs. Commissioner of Income Tax [2007] 289 ITR 26, where the Supreme Court had said that the Revenue ought not to place itself in the arm chair of businessman in dealing with such matters. Modi Revlon (supra) further emphasised that:- "25. This Court notices that in order to determine whether the payment is not sustainable, the AO has to first return a finding that the payment made is excessi…

M/S. Bajaj Foods Ltd., Ahmedabad vs. The Income Tax Officer, Ward-1(2), Ahmedabad

In the result, the ground of appeal no

ITA 2276/AHD/2015[2010-11]Status: DisposedITAT Ahmedabad21 Feb 2019AY 2010-11
For Appellant: Shri Tushar Hemani, A.RFor Respondent: Shri Lalit P. Jain, Sr. D.R
Section 143(2)Section 143(3)Section 36

…fact was categorically pointed out before AO and the same has not been denied by either of the lower authorities. Under such circumstances, no disallowance can be made u/s 36(l)(iii) in respect of such advances. Reliance is placed on "S.A. Builders vs. CIT - 288 ITR 1 (SC)". Major component of interest expenses represents interest on loans taken for specific business purpose: • It is further submitted that major component, of interest expenses represents interest on loans taken for specific purposes as follows and CIT(A) has accepted the fact that such funds cannot be diverted to non- interest bearing funds sinc…

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

In the result, all the appeals of the assessee are treated as allowed for statistical purposes

ITA 332/BANG/2017[2007-2008]Status: DisposedITAT Bangalore15 Feb 2019AY 2007-2008

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaran

For Appellant: Shri. G. Sitaraman, CAFor Respondent: Shri. Pradeep Kumar, CIT
Section 133ASection 143(3)

…e by stating that the advance was given for commercial purposes for acquiring properties in and around Pune and hence no interest was charged. The assessee also relied on the decision rendered by Hon’ble Supreme Court in the case of SA Builders Vs. CIT (2007) 288 ITR 1 in order to contend that the transaction made out of commercial expediency will not call for disallowance of interest expenditure. 5. The AO was not convinced with the contentions of the assessee and accordingly added interest in all the three years as stated below: 2005-06 58,07,800/- 2006-07 66,94,560/- 2007-08 29,00,000/- 6. In the appellate…

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

In the result, all the appeals of the assessee are treated as allowed for statistical purposes

ITA 331/BANG/2017[2006-07]Status: DisposedITAT Bangalore15 Feb 2019AY 2006-07

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaran

For Appellant: Shri. G. Sitaraman, CAFor Respondent: Shri. Pradeep Kumar, CIT
Section 133ASection 143(3)

…e by stating that the advance was given for commercial purposes for acquiring properties in and around Pune and hence no interest was charged. The assessee also relied on the decision rendered by Hon’ble Supreme Court in the case of SA Builders Vs. CIT (2007) 288 ITR 1 in order to contend that the transaction made out of commercial expediency will not call for disallowance of interest expenditure. 5. The AO was not convinced with the contentions of the assessee and accordingly added interest in all the three years as stated below: 2005-06 58,07,800/- 2006-07 66,94,560/- 2007-08 29,00,000/- 6. In the appellate…

DCIT, New Delhi vs. M/S. Unitech Ltd., New Delhi

In the result this issue is allowed in favour of the assessee

ITA 311/DEL/2016[2011-12]Status: DisposedITAT Delhi12 Feb 2019AY 2011-12

Bench: Shri Amit Shukla & Shri L.P. Sahu

For Appellant: Shri Shailesh Gupta, AdvocateFor Respondent: Shri H.K. Choudhary CIT-D.R
Section 144CSection 36(1)(iii)

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “I-2”: DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.No.6585/Del/2015 Assessment Year 2011-12 Unitech Limited DCIT 6, Community Centre, Circle- 27(1) Saket vs. C.R. Building, ITO New Delhi – 110 017 New Delhi. PAN AAACU1482H (Appellant) (Respondent) ITA No. 311 DEL 2016 Assessment year 2011-12 DCIT, Unitech Limited Circle-27(1), Room Vs. 6, Community Centre, No. 193 Saket C.R. Building New Delhi – 110 017 New Delhi PAN AAACU1482H (Appellant) (Respondent) For Assessee : Shri Shailesh Gupta, Advocate For Revenue : Shri…

M/S. Unitech Limited, New Delhi vs. DCIT, New Delhi

In the result this issue is allowed in favour of the assessee

ITA 6585/DEL/2015[2011-12]Status: DisposedITAT Delhi12 Feb 2019AY 2011-12

Bench: Shri Amit Shukla & Shri L.P. Sahu

For Appellant: Shri Shailesh Gupta, AdvocateFor Respondent: Shri H.K. Choudhary CIT-D.R
Section 144CSection 36(1)(iii)

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “I-2”: DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.No.6585/Del/2015 Assessment Year 2011-12 Unitech Limited DCIT 6, Community Centre, Circle- 27(1) Saket vs. C.R. Building, ITO New Delhi – 110 017 New Delhi. PAN AAACU1482H (Appellant) (Respondent) ITA No. 311 DEL 2016 Assessment year 2011-12 DCIT, Unitech Limited Circle-27(1), Room Vs. 6, Community Centre, No. 193 Saket C.R. Building New Delhi – 110 017 New Delhi PAN AAACU1482H (Appellant) (Respondent) For Assessee : Shri Shailesh Gupta, Advocate For Revenue : Shri…

Philip Anil Cherian, Pathanamthitta vs. ACIT, Thiruvalla

In the result, the appeals of the assessee are partly allowed for statistical

ITA 77/COCH/2018[2008-09]Status: DisposedITAT Cochin05 Feb 2019AY 2008-09

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

Section 36(1)(iii)

…ailability of surplus funds for giving Interest free advances, but took a stand that on an earlier occasion, the Tribunal allowed the assessee’s case on the same issue relying on the decision of the Supreme Court in S. A. Builders Ltd. v. CIT (Appeals) (2007) 288 ITR 1. In similar case, we have found that the decision of the Supreme Court could be applied only if commercial expediency is established with facts. Unless the interest free loan goes to advance business interest of the assessee, there cannot be any commercial expediency. For e.g., if a company or a firm supplying raw material for manufacture of produc…

Sri.Philip Anil Cherian, Pathanamthitta vs. The DCIT, Cir-1, Thiruvalla

In the result, the appeals of the assessee are partly allowed for statistical

ITA 412/COCH/2018[2011-12]Status: DisposedITAT Cochin05 Feb 2019AY 2011-12

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

Section 36(1)(iii)

…ailability of surplus funds for giving Interest free advances, but took a stand that on an earlier occasion, the Tribunal allowed the assessee’s case on the same issue relying on the decision of the Supreme Court in S. A. Builders Ltd. v. CIT (Appeals) (2007) 288 ITR 1. In similar case, we have found that the decision of the Supreme Court could be applied only if commercial expediency is established with facts. Unless the interest free loan goes to advance business interest of the assessee, there cannot be any commercial expediency. For e.g., if a company or a firm supplying raw material for manufacture of produc…

DCIT, New Delhi vs. M/S. Albasta Wholesale Services Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 6546/DEL/2015[2011-12]Status: DisposedITAT Delhi04 Feb 2019AY 2011-12

Bench: Shri Before Shri G.D. Agrawal, Before Shri Before Shri G.D. Agrawal, G.D. Agrawal, Vice G.D. Agrawal, Vice & And & Ms. Suchitra Kamble Ms. Suchitra Kamblems. Suchitra Kamble Ms. Suchitra Kamble

For Appellant: Ms. Paramita M. Biswas, CIT-DRFor Respondent: Shri Gautam Jain, Advocate &
Section 14Section 28Section 37

…he advance was given to the subsidiary. Therefore, giving of advance was for the purpose of assessee’s business. In support of this contention, he relied upon the decision of Hon’ble Apex Court in the case of S.A. Builders Ltd. Vs. CIT(A) and Another – [2007] 288 ITR 1 (SC). (i) Hero Cycles P.Ltd. Vs. CIT – [2015] 379 ITR 347 (SC). (ii) CIT Vs. Modi Entertainment Ltd. – [2014] 89 CCH 0014 (Del). 6 ITA-6546/Del/2015 He, therefore, stated that the order of learned CIT(A) should be sustained and Revenue’s appeal may be dismissed. 6. In the rejoinder, it is stated by the learned CIT-DR that the appeal for assess…

Assistant Commissioner of Income Tax vs. Prasanna Purple Mobility Solutions Pvt.Ltd, Pune

In the result, appeal of the Revenue is dismissed

ITA 158/PUN/2017[2012-13]Status: DisposedITAT Pune23 Jan 2019AY 2012-13

Bench: Shri R.S. Syal, Vp & Shri Partha Sarathi Chaudhury, Jm

For Respondent: Shri Pankaj Garg
Section 143(1)Section 143(3)Section 36(1)(iii)Section 37

…ppellant or without any investigation resulting into such apparent decision on his part, bereft A.Y.2012-13 of any factual analysis of the case of the appellant, in fact the Hon'ble Supreme Court decision in the case of S A Builder Ltd. Vs. CIT (Appeal 2007) 288 ITR 1 (SC) while deciding the issue relating to disallowances u/s.36(1)(iii) of the Act. In this said case the disallowances of interest to the extent of Rs.16,39,010/- made by the AO was set-aside by the CIT(A) holding that the interest paid by the assessee of which deduction was claimed was for business purposes and, therefore, the entire interest paid…

M/S. Bright Enterprises Pvt. Ltd., Jalandhar vs. Asstt. Commissioner of Income-Tax, Jalandhar

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

ITA 126/ASR/2015[2012-13]Status: DisposedITAT Amritsar17 Jan 2019AY 2012-13

Bench: Sh. N. K. Saini, Hon’Ble & Sh. Ravish Soodita No.354/Asr./2014 : Asstt. Year : 2010-11 Ita No.126/Asr./2015 : Asstt. Year : 2012-13 M/S Bright Enterprises Pvt. Ltd., Vs Deputy Commissioner Of Income Mbd House, Railway Road, Tax, Central Circle-Ii, Jalandhar Jalandhar (Appellant) (Respondent) Pan No. Aaacb9469K Assessee By : Sh. Sudhir Sehgal, Adv. Revenue By : Sh. Pawan K. Kumar, Cit Dr Date Of Hearing : 08.01.2019 Date Of Pronouncement : 17.01.2019 Order Per N. K. Saini: These Two Appeals By The Assessee Are Directed Against The Orders Dated 08.05.2014 & 15.01.2015 Of The Ld. Cit(A)-5, Ludhiana For The Assessment Years 2010-11 & 2012-13 Respectively. 2. Since, The Issues Involved Are Common & The Appeals Were Heard Together, So These Are Being Disposed Off By This Consolidated Order For The Sake Of Convenience & Brevity.

For Appellant: Sh. Sudhir Sehgal, AdvFor Respondent: Sh. Pawan K. Kumar, CIT DR
Section 40A(2)(b)Section 4G

…t in the arm chair of a businessman to decide that how much expenditure is. reasonable and cannot disallow the ITA No. 354/Asr./2014 9 Bright Enterprises Pvt. Ltd. expenditure in an adhoc manner as per the judgment on the Hon'ble Supreme Court as reported in 288 ITR 1 (SC): The Ld. AO has failed to produce any evidence which shows that the expenditure incurred by the appellant is excessive or unreasonable. (a) The Ld. AO has contended that the appellant is purchasing such large number of magazines and still the sale of scrap is Rs. 269,289 during the year. The appellant would like to submit that most of the gu…

M/S Bright Enterprises Pvt. Ltd, Jalandhar vs. The Dy. Commissioner of Income-Tax, Jalandhar

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

ITA 354/ASR/2014[2010-11]Status: DisposedITAT Amritsar17 Jan 2019AY 2010-11

Bench: Sh. N. K. Saini, Hon’Ble & Sh. Ravish Soodita No.354/Asr./2014 : Asstt. Year : 2010-11 Ita No.126/Asr./2015 : Asstt. Year : 2012-13 M/S Bright Enterprises Pvt. Ltd., Vs Deputy Commissioner Of Income Mbd House, Railway Road, Tax, Central Circle-Ii, Jalandhar Jalandhar (Appellant) (Respondent) Pan No. Aaacb9469K Assessee By : Sh. Sudhir Sehgal, Adv. Revenue By : Sh. Pawan K. Kumar, Cit Dr Date Of Hearing : 08.01.2019 Date Of Pronouncement : 17.01.2019 Order Per N. K. Saini: These Two Appeals By The Assessee Are Directed Against The Orders Dated 08.05.2014 & 15.01.2015 Of The Ld. Cit(A)-5, Ludhiana For The Assessment Years 2010-11 & 2012-13 Respectively. 2. Since, The Issues Involved Are Common & The Appeals Were Heard Together, So These Are Being Disposed Off By This Consolidated Order For The Sake Of Convenience & Brevity.

For Appellant: Sh. Sudhir Sehgal, AdvFor Respondent: Sh. Pawan K. Kumar, CIT DR
Section 40A(2)(b)Section 4G

…t in the arm chair of a businessman to decide that how much expenditure is. reasonable and cannot disallow the ITA No. 354/Asr./2014 9 Bright Enterprises Pvt. Ltd. expenditure in an adhoc manner as per the judgment on the Hon'ble Supreme Court as reported in 288 ITR 1 (SC): The Ld. AO has failed to produce any evidence which shows that the expenditure incurred by the appellant is excessive or unreasonable. (a) The Ld. AO has contended that the appellant is purchasing such large number of magazines and still the sale of scrap is Rs. 269,289 during the year. The appellant would like to submit that most of the gu…

Late Sh. D.K. Jain, New Delhi vs. DCIT, New Delhi

Appeal of the assessee is partly allowed

ITA 6551/DEL/2014[2010-11]Status: DisposedITAT Delhi16 Jan 2019AY 2010-11

Bench: Shri N. K. Billaiya & Ms Suchitra Kamble

Section 14ASection 57

…1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘B’ NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. No. 6551/DEL/2014 (A.Y 2010-11) Late Sh. D. K. Jain Vs DCIT Through Legal Hier Mrs. Usha Jain Circle-32(1) D-19, Nizamuddin East New Delhi. New Delhi AAKPJ4559P (RESPONDENT) (APPELLANT) Appellant by Sh. Ved Jain, CA Respondent by Ms. Ashima Neb, Sr. DR Date of Hearing 14.01.2019 Date of Pronouncement 16.01.2019 ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the assessee against the order dated 19/09/2014 passed by CIT(A)-XXVI, New Delhi f…

M/S Morani Cars Pvt. Ltd., Jaipur vs. Assistant Commissioner of Income Tax, Circle-6, Jaipur

In the result, the addition so made by the AO is hereby set- aside

ITA 1088/JPR/2018[2010-11]Status: DisposedITAT Jaipur09 Jan 2019AY 2010-11
For Appellant: Shri P.C. Parwal (C.A.)For Respondent: Shri P.P. Meena (JCIT) a
Section 40Section 40A(2)

…आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 1088/JP/2018 fu/kZkj.k o"kZ@Assessment Years : 2010-11 cuke M/s Morani Cars Pvt. Ltd., The ACIT, 14, Bajaj Nagar, Vs. Circle-6, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAFCM 1226 N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (C.A.) jktLo dh vksj ls@ Revenue by : Shri P.P. Meena (JCIT) a…

M/S Merlin Resources Pvt Ltd, Kolkata vs. D.C.I.T Cir - 8, Kolkata

In the result, the appeal filed by the Revenue in ITA No

ITA 1239/KOL/2013[2008-09]Status: DisposedITAT Kolkata31 Dec 2018AY 2008-09

Bench: Shri S. S. Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.1239/Kol/2013 ("नधा"रणवष" / Assessment Year: 2008-09)

For Appellant: Shri J.P. Khaitan& S.K. Bajaj, ARFor Respondent: Shri G. Mallikarjuna, CIT-DR & Saurabh Kumar, Addl. CIT, Sr. DR
Section 115JSection 143(3)Section 234BSection 271(1)(c)

…ans to other parties without having regard to the fact that the assessee company could not establish ‘commercial expediency’ in advancing such interest- free loans and the Hon’ble Supreme Court had laid down in the case of S.A. Builders Limited vs. CIT (2007) 288 ITR 1, that establishing ‘commercial expediency was essential.’ 2) Ground No.2:That, on the facts and in circumstances of the case and in law, the ld. CIT(A) erred in deleting disallowance of claim of bad debt of Rs.3,80,00,000/- without appreciating the fact that the assessee company could not establish that such loan was advanced in course of its money…

Cosmos Industries Ltd., Ghaziabad vs. DCIT, New Delhi

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

ITA 3730/DEL/2015[2010-11]Status: DisposedITAT Delhi31 Dec 2018AY 2010-11

Bench: Shri R.K. Panda & Ms Suchitra Kambleassessment Year: 2010-11 Cosmos Industries Ltd., Vs. Dcit, C/O Garg R. Kumar & Associates, Cas, Circle-3(1), 7, Advocate Chambers, New Delhi. Raj Nagar District Centre, Above Dominos Pizza, Ghaziabad. Pan: Aaacc6682R (Appellant) (Respondent) Assessee By : Shri Akhilesh Kumar, Advocate Revenue By : Shri Anil Katoch, Sr.Dr Date Of Hearing : 17.12.2018 Date Of Pronouncement : 31.12.2018 Order Per R.K. Panda, Am: This Appeal By The Assessee Is Directed Against The Order Dated 18Th March, 2015 Of The Cit(A)-14, New Delhi, Relating To Assessment Year 2010-11. 2. The Facts Of The Case, In Brief, Are That The Assessee Is A Company & Is Engaged In The Business Of Manufacturing & Trading Of Sugar. It Filed Its Return Of Income On 31St March, 2011 Declaring Total Income Of Rs.3,36,93,430/- & Income U/S 115Jb At Rs.4,01,70,500/-. This Case Was Selected For Scrutiny By Issue Of Statutory Notices. During The Course Of Assessment Proceedings, The Assessing

For Appellant: Shri Akhilesh Kumar, AdvocateFor Respondent: Shri Anil Katoch, Sr.DR
Section 115JSection 2(14)Section 37

….2015, he submitted that when the holding company invests amounts for business of its subsidiary, it must be held for business expediency. The Hon'ble High Court, relying on the decision of Hon'ble Supreme Court in the case of SA Builders (P) ltd. vs. CIT, 288 ITR 1 (SC), has held that two companies may be in different lines of business, still it makes no difference. He drew our attention to paras 34 and 35 of the said order which read as under:- “34. We agree with the view taken by the Delhi High Court in CIT vs. Dalmia Cement (Bharat) Ltd. (2002) 254 ITR 377 that once it is established that there was nexus…