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

Addl CIT 2(1), Mumbai vs. Bombay Dyeing & Mfg Co. Ltd, Mumbai

In the result, ground of appeal raised by Revenue is dismissed

ITA 557/MUM/2012[2007-08]Status: DisposedITAT Mumbai02 Apr 2018AY 2007-08

Bench: Shri R.C. Sharma & Shri Pawan Singhacit -2(1) M/S Bombay Dyeing & Mfg. Co. Aayakar Bhavan, M.K. Road, Ltd. Neville House, J N Heredia Room No. 575, 5Th Floor, M.K. Vs. Marg, Ballard Estate, Road, Mumbai-20. Mumbai-400001 Pan:Aaact2328K (Appellant) (Respondent) M/S Bombay Dyeing & Mfg. Co. Acit -2(1) Ltd. Neville House, J N Heredia Aayakar Bhavan, M.K. Road, Marg, Ballard Estate, Mumbai-20. Vs. Mumbai-400001 Pan:Aaact2328K (Appellant) (Respondent) Acit -2(1) M/S Bombay Dyeing & Mfg. Co. Room No. 561, 5Th Floor, Ltd. Neville House, J N Heredia Vs. Aayakar Bhavan, M.K. Road, Marg, Ballard Estate, Mumbai-20. Mumbai-400001 Pan:Aaact2328K (Appellant) (Respondent) M/S Bombay Dyeing & Mfg. Co. Acit -2(1) Ltd. Neville House, J N Heredia Aayakar Bhavan, M.K. Road, Mumbai-20. Marg, Ballard Estate, Vs. Mumbai-400001 Pan:Aaact2328K (Appellant) (Respondent)

For Appellant: Shri Yogesh A. Thar with MsFor Respondent: Shri Saurabh Deshpande (DR)
Section 14ASection 253Section 254(1)

…ing regard to the direct or indirect commercial interest of the Company, corporate guarantee is given with a view to safeguard and to further business interest. Hence, relying on the Hon'ble Supreme Court's decision in case of S.A. Builders Ltd. v. CIT [2007] 288 ITR 1/158 Taxman 74, wherein it has been held 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 claim to put itself in the arm- chair of the businessman or in the position of the board of directors and…

M/S. Liberty Marketers, Ernakulam vs. The ACIT, Cochin

In the result, the appeals of the assessee are dismissed

ITA 86/COCH/2016[2011-12]Status: DisposedITAT Cochin30 Mar 2018AY 2011-12

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

Section 36(1)(iii)

…he statement that interest free funds exceeded interest bearing funds in the relevant year was not controverted by the authorities below. 6.1 The Ld. AR relied on the judgments of the Supreme Court to contravene the disallowance: 1) S.A. Builders vs. CIT (288 ITR 1) (SC) 2) CIT vs. Hotel Savera (239 ITR 795) (Mad.) 3) Chanchal Katyal vs. CIT (298 ITR 182) (All) 4) CIT vs. Prem heavy Engineering Works (P) Ltd. (285 ITR 554) (All) 5) ONGC vs. DCIT (262 ITR 648) (Uttaranchal) 6) CIT vs. Raghuvir Sythetics Ltd. (36 Taxman.com 275) (Guj) 7) CIT vs. Reliance Utilities & Power Ltd. (178 Taxman 135) (Bom) I.T.A. Nos…

M/S. Liberty Marketers, Ernakulam vs. The ACIT, Cochin

In the result, the appeals of the assessee are dismissed

ITA 85/COCH/2016[2010-11]Status: DisposedITAT Cochin30 Mar 2018AY 2010-11

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

Section 36(1)(iii)

…he statement that interest free funds exceeded interest bearing funds in the relevant year was not controverted by the authorities below. 6.1 The Ld. AR relied on the judgments of the Supreme Court to contravene the disallowance: 1) S.A. Builders vs. CIT (288 ITR 1) (SC) 2) CIT vs. Hotel Savera (239 ITR 795) (Mad.) 3) Chanchal Katyal vs. CIT (298 ITR 182) (All) 4) CIT vs. Prem heavy Engineering Works (P) Ltd. (285 ITR 554) (All) 5) ONGC vs. DCIT (262 ITR 648) (Uttaranchal) 6) CIT vs. Raghuvir Sythetics Ltd. (36 Taxman.com 275) (Guj) 7) CIT vs. Reliance Utilities & Power Ltd. (178 Taxman 135) (Bom) I.T.A. Nos…

M/S.Liberty Marketers, Ernakulam vs. The ACIT, Cochin

In the result, the appeals of the assessee are dismissed

ITA 409/COCH/2014[2009-10]Status: DisposedITAT Cochin30 Mar 2018AY 2009-10

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

Section 36(1)(iii)

…he statement that interest free funds exceeded interest bearing funds in the relevant year was not controverted by the authorities below. 6.1 The Ld. AR relied on the judgments of the Supreme Court to contravene the disallowance: 1) S.A. Builders vs. CIT (288 ITR 1) (SC) 2) CIT vs. Hotel Savera (239 ITR 795) (Mad.) 3) Chanchal Katyal vs. CIT (298 ITR 182) (All) 4) CIT vs. Prem heavy Engineering Works (P) Ltd. (285 ITR 554) (All) 5) ONGC vs. DCIT (262 ITR 648) (Uttaranchal) 6) CIT vs. Raghuvir Sythetics Ltd. (36 Taxman.com 275) (Guj) 7) CIT vs. Reliance Utilities & Power Ltd. (178 Taxman 135) (Bom) I.T.A. Nos…

DCIT, Circle-1(1), Kolkata vs. M/S Kamarhatty Company Ltd., Kolkata

In the result, appeal of Revenue (in Ground No

ITA 2080/KOL/2016[2011-12]Status: DisposedITAT Kolkata28 Mar 2018AY 2011-12

Bench: Shri Aby T. Varkey & Dr.A.L. Sainiassessment Year :2011-12

Section 139(1)Section 143(3)Section 14ASection 36(1)(va)

…d funds and the loan given to subsidiary company. We note that money was advanced to the subsidiary company on account of commercial expediency and the ratio of the judgment of Hon'ble Supreme Court in the case of S.A. Builders Ltd. vs. CIT And Another (2007) 288 ITR 1 (SC) is applicable to the facts of the assessee’s case under consideration. We also note that assessee was having sufficient interest free fund and the Assessing Officer was unable to establish any nexus between borrowed fund and the loan fund to the subsidiary company. Therefore, the ratio laid down of the judgment of Hon'ble Supreme Court in the…

ITO, Sunam Hq Sangrur vs. M/S Shree Bhagwati Rice Mills, Khanouri

In the result appeal of the Revenue is dismissed and the cross objection of

ITA 1279/CHANDI/2017[2011-12]Status: DisposedITAT Chandigarh27 Mar 2018AY 2011-12

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumar

For Appellant: Sh. Deepak AnandFor Respondent: Sh. J.K. Garg
Section 145(3)

…eing made by the assessee and that the amount was paid in lieu of the purchases or was adjusted in the next year purchases. It was argued that the advances were made on account of commercial expediency. The Ld. AR relied on the judgment of SA Builders Vs. CIT 288 ITR 1(Supreme Court). Further the assessee submitted that the assessee has its own capital of Rs. 72,62,060/- and if the interest component is calculated @12% it would also amount to Rs. 8,71,440/-. Ld. AR further relied on the judgments in case of M/s Munjal Sales Corporation Vs. CIT 215 CTR 105 for the proposition that interest free loan if less th…

Asst CIT 14(1), Mumbai vs. Milan Jewellers, Mumbai

In the result, ground no.2 raised by revenue is dismissed

ITA 6351/MUM/2014[2010-11]Status: DisposedITAT Mumbai23 Mar 2018AY 2010-11

Bench: Shri G.S. Pannu & Shri Pawan Singhacit 14 (1), M/S Milan Jewellers 2Nd Floor, Earnest House, 1002, 10Th Floor, Panchartna, Vs. Nariman Point, Opera House, Mumbai-400004. Mumbai-400021. Pan: Aaafm7721J (Appellant) (Respondent)

For Appellant: Shri Reepal TraishawalaFor Respondent: Shri Suman Kumar (DR)
Section 143(3)Section 253Section 254(1)Section 36(1)(iii)

…IT(A)was of the view that the primary condition for allowability of interest on borrowed capital is that capital should have been borrowed for the purpose of business or profession. And on the basis of Hon’ble Apex Court decision in SA Builders Vs CIT [2007] 288 ITR 1(SC) concluded that Eternity Jewels is a group concern to whom the assessee made supplies diamonds and thus there is a business connection between two entity. Therefore, the transaction between the related parties has to be examined from the prospective of principle of ordinary commercial trading. The ld. CIT(A) also examined the account of Ete…

Santosh Builders, Mumbai vs. ITO 17(3)(2), Mumbai

In the result, appeals of assessee are allowed

ITA 2134/MUM/2017[2012-13]Status: DisposedITAT Mumbai19 Mar 2018AY 2012-13

Bench: Shri R.C.Sharma, Am & Shri Amarjit Singh Jm

Section 143(3)Section 147

…that the impugned expenditure falls within the scope of the expression "wholly and exclusively for the purpose of business or profession" within the meaning of section 37(1) of the Act 14. Further more Hon'ble Supreme Court in the case of S A Builders v CIT (288 ITR 1) held that "The expression 'commercial expediency' is an expression used is for the Section 37 that the expression 'for the purpose of business' includes expenditure voluntarily incurred for commercial expediency, and it is immaterial if a third party also benefits thereby. The expression 'commercial expediency' is an expression of wide import and…

ITO 9(1)(3), Mumbai vs. Anchor Residency P.Ltd, Mumbai

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

ITA 4407/MUM/2015[2011-12]Status: DisposedITAT Mumbai14 Mar 2018AY 2011-12

Bench: Shri Joginder Singh () & Shri G Manjunatha ()

Section 143(2)Section 36(1)(iii)

…1 ITA 4407/Mum/2015 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI Before Shri Joginder Singh (JUDICIAL MEMBER) AND Shri G Manjunatha (ACCOUNTANT MEMBER) I.T.A No.4407/Mum/2015 (Assessment year: 2011-12) ITO-9(1)(3), Mumbai vs M/s Anchor Residency Pvt Ltd (Formerly known as Anchor Malls Pvt Ltd), Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road, Jogeshwari (E), Mumbai-60 PAN : AAFC A2252C Appellant by Shri Rajesh Damar Respondent by Shri Ms. Dinkle Hariya Date of hearing 07-02-2018 Date of pronouncement 14-03-2018 O R D E R Per G Manjunatha, AM : This appeal filed by the reve…

DCIT 3(1), Mumbai vs. Edelweiss Capital Ltd, Mumbai

In the result appeals of Revenue are dismissed

ITA 7797/MUM/2011[2007-08]Status: DisposedITAT Mumbai14 Mar 2018AY 2007-08

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm

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

…inance and Capital Markets. In the assessment orders passed u/s. 143(3), in the cases of wholly owned subsidiary companies, there is no finding recorded that the funds borrowed have not been used for business purposes. In the case of S.A. Builders Ltd. v CIT (288 ITR 1)(SC), it has been held on page 10 as under: "However, where it Is obvious that a holding company has a deep interest in its subsidiary, and hence if the holding company advances borrowed money to a subsidiary and the same is used by the subsidiary for some business purposes, the appellant would, in our opinion, ordinarily be entitled to deduction o…

Deputy Commissioner of Income-Tax vs. M/S. Rajmal Lakhichand

In the result, appeal of the Department is dismissed

ITA 832/PUN/2015[2010-11]Status: DisposedITAT Pune28 Feb 2018AY 2010-11

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

For Appellant: Shri Sunil PathakFor Respondent: Shri Rajeev Kumar
Section 143(2)Section 14ASection 2(22)(e)Section 36(1)(iii)Section 40A(2)(a)

…r.w. Rule 8D, the ld. DR submitted that the Commissioner of Income Tax (Appeals) has deleted disallowance on the basis of decision of Hon‟ble Supreme Court of India in the case of S.A. Builders Ltd. Vs. Commissioner of Income Tax (Appeals) & Anr. reported as 288 ITR 1. During the course of assessment proceedings, the Assessing Officer has recorded the fact that the assessee has diverted its interest bearing funds for investment in its sister concerns. There is a direct nexus of borrowings and investments made in subsidiary companies from borrowed funds. The assessee has not been able to show that the funds have…

M/S. Rajmal Lakhichand vs. Deputy Commissioner of Income-Tax

In the result, appeal of the Department is dismissed

ITA 670/PUN/2015[2010-11]Status: DisposedITAT Pune28 Feb 2018AY 2010-11

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

For Appellant: Shri Sunil PathakFor Respondent: Shri Rajeev Kumar
Section 143(2)Section 14ASection 2(22)(e)Section 36(1)(iii)Section 40A(2)(a)

…r.w. Rule 8D, the ld. DR submitted that the Commissioner of Income Tax (Appeals) has deleted disallowance on the basis of decision of Hon‟ble Supreme Court of India in the case of S.A. Builders Ltd. Vs. Commissioner of Income Tax (Appeals) & Anr. reported as 288 ITR 1. During the course of assessment proceedings, the Assessing Officer has recorded the fact that the assessee has diverted its interest bearing funds for investment in its sister concerns. There is a direct nexus of borrowings and investments made in subsidiary companies from borrowed funds. The assessee has not been able to show that the funds have…

Vodafone Digilink Limited, Jaipur vs. ITO, Jaipur

In the result, appeal of the assessee is allowed

ITA 67/JPR/2015[2011-12]Status: DisposedITAT Jaipur28 Feb 2018AY 2011-12
For Appellant: Ms. Ishita Farsaiya (Adv.)For Respondent: Shri Varinder Mehta (CIT)
Section 191Section 194HSection 201Section 201(1)

…आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jkWo] U;kf;d lnL; ,oa Jh HkkxpUn] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI BHAGCHAND, AM vk;dj vihy la-@ITA No. 67/JP/2015 fu/kZkj.k o"kZ@Assessment Year : 2011-12. cuke Vodafone Digilink Ltd., The Income Tax Officer (TDS)-2, Vs. (Formerly known as Vodafone Jaipur. Essar Digilink Limited) 5th Floor, Gaurav Towers, Malviya Nagar, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@TAN No. JPRA 02455 F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Ms. Ishita Farsaiy…

Zakaulla Siddqui, Mumbai vs. Asst CIT Cen Cir 47, Mumbai

In the result, the appeal filed by the assessee for the AY 2011-12 is partly allowed whereas the appeal filed by the Revenue is dismissed

ITA 302/MUM/2015[2011-12]Status: DisposedITAT Mumbai26 Feb 2018AY 2011-12

Bench: Shri Mahavir Singh () & Shri N.K. Pradhan () Assessment Year: 2006-07 & Assessment Year: 2010-11 & Assessment Year: 2011-12 Mr. Zakaullah Siddiqui Asst. Commissioner Of A-Wing, 604 A, Simla Income-Tax, Central Vs. House, Napean Sea Road, Circle-47, Mumbai-400036. Mumbai. Pan No. Aakps6026J Appellant Respondent Assessment Year: 2011-12 A.C.I.T.-Cc-8(4) Mr. Zakaullah Siddiqui 6Th Floor, Room No. 658, A-Wing, 604 A, Simla Vs. Aayakarbhavan, M.K. House, Napean Sea Road, Road, Mumbai-400036. Mumbai-400020 Pan No. Aakps6026J Appellant Respondent Assesseeby : Mr. Ajay R. Singh, Ar Revenue By : Mr. A.K. Jha, Cit-Dr Date Of Hearing : 06/12/2017 Date Of Pronouncement : 26/02/2018

For Appellant: Mr. Ajay R. Singh, ARFor Respondent: Mr. A.K. Jha, CIT-DR
Section 132Section 132(1)Section 143(3)Section 153Section 153A

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) Assessment Year: 2006-07 & Assessment Year: 2010-11 & Assessment Year: 2011-12 Mr. Zakaullah Siddiqui Asst. Commissioner of A-Wing, 604 A, Simla Income-Tax, Central Vs. House, Napean Sea Road, Circle-47, Mumbai-400036. Mumbai. PAN No. AAKPS6026J Appellant Respondent Assessment Year: 2011-12 A.C.I.T.-CC-8(4) Mr. Zakaullah Siddiqui 6th floor, Room No. 658, A-Wing, 604 A, Simla Vs. AayakarBhavan, M.K. House, Napean Sea Road, Road, Mumbai-400036. Mumbai-400020 PAN No.…

ITO 25(3)(1), Mumbai vs. Mita Samir Shah, Mumbai

In the result, this appeal by the assessee stands allowed

ITA 7382/MUM/2012[2009-10]Status: DisposedITAT Mumbai23 Feb 2018AY 2009-10
For Appellant: Shri T. A. KhanFor Respondent: Dr. K. Shivaram
Section 194CSection 37(1)Section 40

…ounted for the sum received. Thereafter, the ld. Counsel of the assessee gave various submissions disputing the Assessing Officer’s findings. The ld. Counsel of the assessee placed reliance on the decision in the case of S.A. Builders Ltd. vs. CIT (A) [2007] 288 ITR 1 (SC) for the following proposition : No businessman can be complelled to maximize its profit. The income tax authorities must put themselves in the shoes of the assessee and see how a prudent businessman would act. The authorities must not look at the matter from their own view point but that of a prudent businessman. A transaction must be viewed…

Essa I Merchant, Mumbai vs. JCIT RG 17(1), Mumbai

In the result the appeal of the assessee is allowed

ITA 1592/MUM/2017[2012-13]Status: DisposedITAT Mumbai21 Feb 2018AY 2012-13

Bench: Shri R.C. Sharma & Shri Pawan Singhessa Ismail Merchant Jcit 13(3), (Prop. Of M/S Advance Aayakar Bhavan, Computers), 123, Ground Floor, Mumbai-400020 Vs. Zakari Masjid Street, Masjid, Mumbai-400009. Pan: Afspm6894H (Appellant) (Respondent) Acit 17(1), Essa Ismail Merchant Aayakar Bhavan, (Prop. Of M/S Advance Mumbai-400020 Computers), 123, Ground Floor, Vs. Zakari Masjid Street, Masjid, Mumbai-400009. Pan: Afspm6894H (Appellant) (Respondent) Essa Ismail Merchant Jcit 17(1), (Prop. Of M/S Advance Aayakar Bhavan, Computers), Unit No.9, Yusuf Mumbai-400020 Building, Ground Floor, Junction Vs. Of M.G. Road & Veer Nariman Road, Flora Fountain, Fort, Mumbai-400001. Pan: Afspm6894H (Appellant) (Respondent) Ita No. 3618 & 4521/M/2016 & 1592 & 3426/M/17 Essa Ismail Merchant

For Respondent: Shri Ram Tiwari (DR)
Section 133(6)Section 143(3)Section 253Section 254(1)

…non-existent party or the commission came back to the assessee in any form. As we have already address, PAN Number and accounts. The assessee has deducted TDS wherever applicable and furnished the details thereof. The Hon’ble Apex Court in SA Builder Vs CIT 288 ITR 1 (SC) held that the revenue authorities cannot step into shoe of the assessee and dictate him how to conduct the business. Thus, considering the facts of the case and following the various decisions as cited above the ground of appeal raised by assessee in its appeal is allowed. The AO is directed to delete the disallowance of commission payment…

Ess Ismail Merchant, Mumbai vs. Jt CIT 13(3), Mumbai

In the result the appeal of the assessee is allowed

ITA 3618/MUM/2016[2011-12]Status: DisposedITAT Mumbai21 Feb 2018AY 2011-12

Bench: Shri R.C. Sharma & Shri Pawan Singhessa Ismail Merchant Jcit 13(3), (Prop. Of M/S Advance Aayakar Bhavan, Computers), 123, Ground Floor, Mumbai-400020 Vs. Zakari Masjid Street, Masjid, Mumbai-400009. Pan: Afspm6894H (Appellant) (Respondent) Acit 17(1), Essa Ismail Merchant Aayakar Bhavan, (Prop. Of M/S Advance Mumbai-400020 Computers), 123, Ground Floor, Vs. Zakari Masjid Street, Masjid, Mumbai-400009. Pan: Afspm6894H (Appellant) (Respondent) Essa Ismail Merchant Jcit 17(1), (Prop. Of M/S Advance Aayakar Bhavan, Computers), Unit No.9, Yusuf Mumbai-400020 Building, Ground Floor, Junction Vs. Of M.G. Road & Veer Nariman Road, Flora Fountain, Fort, Mumbai-400001. Pan: Afspm6894H (Appellant) (Respondent) Ita No. 3618 & 4521/M/2016 & 1592 & 3426/M/17 Essa Ismail Merchant

For Respondent: Shri Ram Tiwari (DR)
Section 133(6)Section 143(3)Section 253Section 254(1)

…non-existent party or the commission came back to the assessee in any form. As we have already address, PAN Number and accounts. The assessee has deducted TDS wherever applicable and furnished the details thereof. The Hon’ble Apex Court in SA Builder Vs CIT 288 ITR 1 (SC) held that the revenue authorities cannot step into shoe of the assessee and dictate him how to conduct the business. Thus, considering the facts of the case and following the various decisions as cited above the ground of appeal raised by assessee in its appeal is allowed. The AO is directed to delete the disallowance of commission payment…

DCIT, Chennai vs. Diamond Engineering (Chennai) P Ltd., Chennai

In the result, the appeal of the Revenue is allowed for 5

ITA 936/CHNY/2017[2008-09]Status: DisposedITAT Chennai15 Feb 2018AY 2008-09

Bench: Shri Abraham P. George & Shri Duvvuru Rl Reddy] आयकर अपील सं./I.T.A. No.936/Chny/2017. "नधा"रण वष" /Assessment Year : 2008-2009. Deputy Commissioner Of Vs. M/S. Diamond Engineering Income Tax, (Chennai) P. Ltd, Corporate Circle 1(1) No.179, Rajiv Gandhi Salai, Chennai. Sholinganallur, Chennai 600 119. [Pan Aaacd 3949E]

Section 36(1)

…wing the interest aggregating to ₹3,27,78,927/- in view of the non-interest bearing loan to sister concerns is not warranted. Ld. D.R vehemently argued in support of the orders of the Revenue and also relied on decision of S.A. Builders Vs. CIT(A) reported in 288 ITR 1. 5. We have heard both the parties and carefully perused the materials available on record. On perusing the balance sheet submitted by the assessee it is apparent ITA No. 936/CHNY /2018 :- 4 -: that the assessee is having reserves and surplus of ₹11.8 crores approximately and ₹20/- crore equity as on 01.04.2008. This fund of the assessee is non-…

Rajasayee Fine Linen Private Limited, Chennai vs. DCIT, Coimbatore

In the result, the assessee’s appeal is treated as allowed for

ITA 1034/CHNY/2017[2012-13]Status: DisposedITAT Chennai15 Feb 2018AY 2012-13

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Shri.Vijayaraghavan, AdvocateFor Respondent: Shri. ARV Sreenivasan, JCIT
Section 37

…and paid. This amount only represents the actual business related payments and the outstanding amount of Rs.12,69,71,011 represents diversion of funds from interest bearing borrowed capital. The assessee company relied on the case of M/s. SA Builders cited in 288 ITR 1 In support of its claim. However, it is submitted that on a SLP filed by Department against the Delhi High Court's decision in the case of CIT v Tulip Star Hotels Ltd [2012J 204 Taxman 11 (Mag.)/[2011] 16 taxmann.com 335, the Hon'ble Supreme Court ruled that their earlier decision In the case of S. A. Builders Ltd. needs reconsideration. In view of…

Rane Brake Linings Limited, Chennai vs. ITO (OSD), Chennai

In the result the Revenue’s appeal in ITA Nos

ITA 1596/CHNY/2014[2007-08]Status: DisposedITAT Chennai15 Feb 2018AY 2007-08

Bench: Shri N.R.S. Ganesan & Shri A.Mohan Alankamony

For Respondent: Shri R. Vijayaraghavan, Advocate
Section 143(3)Section 14ASection 250(6)Section 40Section 9(1)(vii)

…they were borrowed and entire interest debited is only for the business activity of the assessee. [ CIT v. Calcutta Agency Ltd, 19 ITR 191 (SC) ] (ii) whether the loans advanced to sister concerns are out of commercial expediency [ S.A. Builders Ltd v. CIT, 288 ITR 1 (SC) ], 6.2.1 In the instant case, it is made very clear by the AO that the loans advanced to the sister concerns have a direct nexus with their 0.0. funds borrowed from the ICICI bank. Therefore, the interest burden directly fell on the appellant and the entire interest debited in its account was not meant for the business activity of the appella…