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

Rane Brake Linings Limited, Chennai vs. ACIT, Chennai

In the result the Revenue’s appeal in ITA Nos

ITA 1595/CHNY/2014[2006-07]Status: DisposedITAT Chennai15 Feb 2018AY 2006-07

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…

Rane Brake Linings Limited, Chennai vs. ACIT, Chennai

In the result the Revenue’s appeal in ITA Nos

ITA 1594/CHNY/2014[2001-02]Status: DisposedITAT Chennai15 Feb 2018AY 2001-02

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…

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

In the result the Revenue’s appeal in ITA Nos

ITA 1593/CHNY/2014[1999-2000]Status: DisposedITAT Chennai15 Feb 2018AY 1999-2000

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…

DCIT, Chennai vs. Rane Brake Lining Ltd., Chennai

In the result the Revenue’s appeal in ITA Nos

ITA 1528/CHNY/2014[2010-2011]Status: DisposedITAT Chennai15 Feb 2018AY 2010-2011

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…

DCIT, Chennai vs. Rane Brake Lining Ltd., Chennai

In the result the Revenue’s appeal in ITA Nos

ITA 1527/CHNY/2014[2009-2010]Status: DisposedITAT Chennai15 Feb 2018AY 2009-2010

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…

Arshiya Ftwz Ltd, Mumbai vs. Asst CIT Cir 8(1), Mumbai

In the result, the appeal is partly allowed

ITA 2804/MUM/2014[2007-08]Status: DisposedITAT Mumbai14 Feb 2018AY 2007-08

Bench: Shri D.T. Garasia () & Shri N.K. Pradhan () Assessment Year: 2010-11 M/S Arshiya Ftwz Ltd., Acit-8(1), 402, Level-4, Ceejay House, Aayakar Bhavan, Vs. Shiv Sagar Estate, F-Block, Dr. Mumbai. Annie Besant Road, Worli, Mumbai-400018 Pan No. Aagca7862D Appellant Respondent Assessee By : Mr. Navnit Chaudhary, Ar Revenue By : Mr.Rajesh Kumar Yadav, Sr. Dr Date Of Hearing : 28/12/2017 Date Of Pronouncement : 14/02/2018

For Appellant: Mr. Navnit Chaudhary, ARFor Respondent: Mr.Rajesh Kumar Yadav, Sr. DR
Section 143(3)Section 14ASection 36(1)(iii)Section 37(1)

…esaid subsidiary companies. The grant of loans and advances to the subsidiary companies is for the purpose of business and consequently, interest on such advances should not be disallowed. Reliance is placed by him on the decision in S.A. Builders Ltd. [2007] 288 ITR 1 (SC), CIT v. M/s Delite Enterprises dated26th February, 2009 by Bombay High Court, Tata Industries Ltd. [2017] 82 taxmann.com 227 (Mumbai-Trib.) and Venus records & Tape (P) Ltd. [2013] 33 taxmann.com 49 (Mumbai- Trib.) 6.2 Regarding the disallowance of the above sum made by the AO u/s 37(1), the Ld. counsel submits that the interest expenses incur…

DCIT Cir 6(1)(1), Mumbai vs. Amma Lines P.Ltd, Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 94/MUM/2016[2010-11]Status: DisposedITAT Mumbai13 Feb 2018AY 2010-11

Bench: Shri D.T. Garasia & Shri Rajesh Kumar

For Appellant: Shri Rajesh Kumar YadavFor Respondent: Shri Mani Jain
Section 143(3)Section 36Section 36(1)(iii)

…were purely made on commercial basis and it was essential to make such investments/advances for the purposes of business of the assessee. The M/s. Amma Lines Pvt. Ltd. assessee relied on the decision of the Hon'ble Apex Court in the case of S.A. Builders Ltd. 288 ITR 1 and the decisions of the Hon'ble Supreme Court in the case of CIT vs. Marudhar Chemicals & Pharmaceuticals (P) Ltd. 319 ITR 75. However, the AO was not convinced with the contention of the assessee on the ground that the test of availability of funds is not the decisive factor under Section 36(1)(iii) of the Act and thus denied the claim of the ass…

DCIT Cir 6(1)(1), Mumbai vs. Amma Lines P.Ltd, Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 93/MUM/2016[2011-12]Status: DisposedITAT Mumbai13 Feb 2018AY 2011-12

Bench: Shri D.T. Garasia & Shri Rajesh Kumar

For Appellant: Shri Rajesh Kumar YadavFor Respondent: Shri Mani Jain
Section 143(3)Section 36Section 36(1)(iii)

…were purely made on commercial basis and it was essential to make such investments/advances for the purposes of business of the assessee. The M/s. Amma Lines Pvt. Ltd. assessee relied on the decision of the Hon'ble Apex Court in the case of S.A. Builders Ltd. 288 ITR 1 and the decisions of the Hon'ble Supreme Court in the case of CIT vs. Marudhar Chemicals & Pharmaceuticals (P) Ltd. 319 ITR 75. However, the AO was not convinced with the contention of the assessee on the ground that the test of availability of funds is not the decisive factor under Section 36(1)(iii) of the Act and thus denied the claim of the ass…

Assistant Commissioner of Income-Tax vs. Spicer India Pvt. Ltd., Pune

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

ITA 826/PUN/2016[2011-12]Status: DisposedITAT Pune09 Feb 2018AY 2011-12

Bench: Shri Anil Chaturvedi, Am & Shri Vikas Awasthy, Jm आयकर अपील सं. / Ita No. 376/Pun/2016 "नधा"रण वष" / Assessment Year : 2011-12

For Appellant: Shri R.D. OnkarFor Respondent: Shri Rajeev Kumar, CIT
Section 143(3)Section 92C

…ssing Officer cannot sit in judgment of businessman position in incurring any expenditure. The Hon’ble Supreme Court in Hero Cycles (P) Ltd. Vs. CIT (supra) have applied the ratio laid down by the Apex court in S.A. Builders Ltd. Vs. CIT(A) and another (2007) 288 ITR 1 (SC) and upheld the scope of commercial expediency, wherein it was held that The expression "commercial expediency" is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as business expe…

Spicer India Private Ltd., Pune vs. Assistant Commissioner of Income-Tax

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

ITA 376/PUN/2016[2011-12]Status: DisposedITAT Pune09 Feb 2018AY 2011-12

Bench: Shri Anil Chaturvedi, Am & Shri Vikas Awasthy, Jm आयकर अपील सं. / Ita No. 376/Pun/2016 "नधा"रण वष" / Assessment Year : 2011-12

For Appellant: Shri R.D. OnkarFor Respondent: Shri Rajeev Kumar, CIT
Section 143(3)Section 92C

…ssing Officer cannot sit in judgment of businessman position in incurring any expenditure. The Hon’ble Supreme Court in Hero Cycles (P) Ltd. Vs. CIT (supra) have applied the ratio laid down by the Apex court in S.A. Builders Ltd. Vs. CIT(A) and another (2007) 288 ITR 1 (SC) and upheld the scope of commercial expediency, wherein it was held that The expression "commercial expediency" is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as business expe…

Apurva Developers P. Ltd, Mumbai vs. ITO 9(1)1, Mumbai

ITA 7765/MUM/2011[2005-06]Status: DisposedITAT Mumbai09 Feb 2018AY 2005-06

Bench: Shri D.T. Garasia () & Shri N.K. Pradhan () Assessment Year: 2005-06 & Assessment Year: 2008-09 M/S Apurva Developers Pvt. Ito-9(1)(1), Ltd. Room No. 266, 2Nd Vs. 9, Matru Madhur Floor, Aayakar Bhavan, Apartments, 56, T.P.S. Road, Mumbai-400020 Borivali West, Mumbai-400092 Pan No. Aaaca8270F Appellant Respondent Assesseeby : Mr. Gautam S. Thaker, Ar Revenue By : Mr. T.A. Khan, Dr Date Of Hearing : 27/12/2017 Date Of Pronouncement : 09/02/2018

For Appellant: Mr. Gautam S. Thaker, ARFor Respondent: Mr. T.A. Khan, DR
Section 143(3)Section 2(22)(e)

…draft of the impugned assessment year. The Ld. counsel further submits that interest expense cannot be properly assessed unless it is subjected to the test of commercial expediency. Reliance was placed by him inter alia on the decision in S.A. Builders v. CIT 288 ITR 1 (SC). 6. On the other hand, the Ld. DR relies on the order of the Ld. CIT(A). 7. We have heard the rival submissions and perused the relevant materials on record. We find that the AO has not properly examined the nexus between inflow and outflow of liquidity. Therefore, we set aside the order of the Ld. CIT(A) and restore the matter to the file of…

Rocky Marketing (Chennai) Pvt Ltd., Chennai vs. Dcitcentral Circle 1(1), Chennai

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

ITA 1707/CHNY/2017[2013-14]Status: DisposedITAT Chennai05 Feb 2018AY 2013-14

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

For Respondent: Shri Mohd. Mustafa, JCIT
Section 143(3)Section 250(6)Section 36(1)(iii)

…limits of Rs.16 crores for the group. The assessee had further explained that the amount was advanced to its sister concerns out of commercial exigency and relied in the decision of the Hon’ble Apex Court in the case S.A. Builders Limited vs. CIT reported in 288 ITR 1 and Hero Cycles Pvt. Ltd. vs. CIT reported in 379 ITR 347. It was further explained that the assessee and its sister concern fall under the same tax rate and therefore there was no loss of revenue to the Department. However the Ld.AO disallowed the interest expense of Rs.71,37,500/- which is 12.5% of Rs.5.71 crore interest free loan advanced to th…

DCIT, Cir-55, Kolkata vs. Dilip Chand Kankaria, Kolkata

In the result, the appeal filed by the Revenue (in Ground No

ITA 664/KOL/2014[2010-2011]Status: DisposedITAT Kolkata31 Jan 2018AY 2010-2011

Bench: Shri A. T Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.664/Kol/2014 (िनधा"रणवष" / Assessment Year: 2010-11) Dcit, Circle-55, Kolkata Vs. Dilip Chand Kankaria 54/1, Rafi Ahmed Kidwai Road, 87, Lenin Sarani, Kolkata – 4Th Floor, Kol-16. 700 013. "थायीलेखासं./जीआइआरसं./Pan/Gir No. : Ajxpk 5793 Q (Assessee) .. (Respondent) Assessee By : Shri Saurabh Kumar, Addl. Cit(Dr) Respondent By : Shri Subash Agarwal, Advocate. सुनवाईकीतारीख/ Date Of Hearing : 14/11/2017 घोषणाकीतारीख/Date Of Pronouncement : 31/01/2018 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Appeal Filed By The Revenue, Pertaining To A.Y 2010-11, Is Directed Against An Order Passed By The Commissioner Of Income Tax(Appeals)- Xxxvi, Kolkata, In Appeal No.86/Cit(A)-Xxxvi/Kol/Wd-55(4)/Kol/2013-14, Dated 08.01.2014, Which In Turn Arises Out Of An Order Passed By The Assessing Officer U/S 143(3) Of The I.T Act, 1961 (Hereinafter Referred To As The ‘Act’), Dated 25.03.2013. 2. The Revenue Has Raised The Following Grounds Of Appeal: “1. On The Facts & In The Circumstances Of The Case, Ld. Cit(A) Has Erred In Allowing The Interest Of Rs.74,76,809/- As Not Being Established To Have Been Wholly & Exclusively For The Purpose Of Business. 2. On The Facts & In The Circumstances Of The Case, The Assessee Failed To Establish The Rendering Of Services Of The Brokers & So Ld. Cit(A) Ought To Have Confirmed The Disallowance Of Rs.14,85,451/-. 3. The Appellant Craves Leave To Add, Alter Or Abrogate Any Ground.”

For Appellant: Shri Saurabh Kumar, Addl. CIT(DR)For Respondent: Shri Subash Agarwal, Advocate
Section 143(2)Section 143(3)

…IN THE INCOME TAX APPELLATE TRIBUNAL “B”, BENCH KOLKATA BEFORE SHRI A. T VARKEY, JM &DR. A.L.SAINI, AM आयकरअपीलसं./ITA No.664/Kol/2014 (िनधा"रणवष" / Assessment Year: 2010-11) DCIT, Circle-55, Kolkata Vs. Dilip Chand Kankaria 54/1, Rafi Ahmed Kidwai Road, 87, Lenin Sarani, Kolkata – 4th Floor, Kol-16. 700 013. "थायीलेखासं./जीआइआरसं./PAN/GIR No. : AJXPK 5793 Q (ASSESSEE) .. (RESPONDENT) Assessee by : Shri Saurabh Kumar, Addl. CIT(DR) Respondent by : Shri Subash Agarwal, Advocate. सुनवाईकीतारीख/ Date of Hearing : 14/11/2017 घोषणाकीतारीख/Date of Pronouncement : 31/01/2018 आदेश / O R D E R Per Dr. Arjun Lal Saini, AM:…

Firstsource Solutions Ltd ( Formerly Known As Icici Onesource Ltd), Mumbai vs. DCIT RG 5(2), Mumbai

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

ITA 2658/MUM/2011[2005-06]Status: DisposedITAT Mumbai31 Jan 2018AY 2005-06

Bench: S/Shri B.R. Baskaran (Am) & Ramlal Negi (Jm)

Section 154

…anies are also engaged in the similar line 3 M/s. Firstsource Solutions Limited of business as that of the assessee. Accordingly it was contended, by placing reliance on the decision rendered by Hon’ble Supreme Court in the case of S.A.Builders Ltd Vs. CIT (288 ITR 1), that there is commercial expediency in making investments and hence no disallowance was called for. We notice that the Ld CIT(A) has deleted the disallowance on account of above said reasoning. 6. Before us, the Ld D.R submitted that the Ld CIT(A) has granted relief without discussing much on the issue. On the contrary, the Ld A.R submitted that…

K.P.R.Mill Limited, Chennai vs. ACIT Corporate Circle 2, Coimbatore

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

ITA 1915/CHNY/2017[2013-14]Status: DisposedITAT Chennai24 Jan 2018AY 2013-14

Bench: Shri N.R.S. Ganesan & Shri S. Jayaramanआयकर अपील सं./Ita No.1915/Mds/2017 "नधा"रण वष" / Assessment Year : 2013-14

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Smt. Ruby George, CIT

…interest on the borrowed funds to the extent of `1,43,50,000/-, which was invested in the sister 4 I.T.A. No.1915/Mds/17 concern, could be allowed as deduction while computing total income of the assessee? The Apex Court in S.A. Builders Ltd. v. CIT (2007) 288 ITR 1 had an occasion to consider an identical issue. The Apex Court held that when the borrowed funds were used for the business of sister concern, then the interest can be allowed as deduction even though the borrowed company has not used the loan amount for its business. The utilization of funds by the sister concern would tantamount to utilization of…

Dy. C.I.T. 1(2), Raipur (Cg) vs. M/S Hira Ferro Alloys Ltd., Raipur

In the result, appeal filed for assessment year 2010-11 is dismissed

ITA 360/BIL/2014[2011-12]Status: DisposedITAT Raipur18 Jan 2018AY 2011-12

Bench: S/Shri N.S Saini & Pavan Kumar Gadale

For Appellant: NoneFor Respondent: Shri P.K.Mishra, CIT DR
Section 14ASection 801ASection 80ISection 8Q

…ing Officer has not disputed the submission of the assessee that no expenditure was incurred for making the investment. The CIT(A) has relied on the following judicial pronouncements: i) In S. A. Builders Ltd. vs. Commissioner of Income Tax (Appeals) & ANR. 288 ITR 1 (SC), it was held that interest on borrowed funds cannot be disallowed if the assessee has advanced interest-free loan to a sister-concern as a measure of commercial expediency. ii) The Hon’ble Allahabad High Court in CIT vs. Raj Kumar Singh & Co. (2007) 210 CTR (All) 483 has held that interest paid by assessee on money borrowed for repayment of a…

Dy. C.I.T. 1(2), Raipur (Cg) vs. M/S Hira Ferro Alloys Ltd., Raipur

In the result, appeal filed for assessment year 2010-11 is dismissed

ITA 359/BIL/2014[2010-11]Status: DisposedITAT Raipur18 Jan 2018AY 2010-11

Bench: S/Shri N.S Saini & Pavan Kumar Gadale

For Appellant: NoneFor Respondent: Shri P.K.Mishra, CIT DR
Section 14ASection 801ASection 80ISection 8Q

…ing Officer has not disputed the submission of the assessee that no expenditure was incurred for making the investment. The CIT(A) has relied on the following judicial pronouncements: i) In S. A. Builders Ltd. vs. Commissioner of Income Tax (Appeals) & ANR. 288 ITR 1 (SC), it was held that interest on borrowed funds cannot be disallowed if the assessee has advanced interest-free loan to a sister-concern as a measure of commercial expediency. ii) The Hon’ble Allahabad High Court in CIT vs. Raj Kumar Singh & Co. (2007) 210 CTR (All) 483 has held that interest paid by assessee on money borrowed for repayment of a…

Dy. C.I.T. 1(2), Raipur (Cg) vs. M/S Hira Ferro Alloys Ltd., Raipur

In the result, appeal filed for assessment year 2010-11 is dismissed

ITA 358/BIL/2014[2009-10]Status: DisposedITAT Raipur18 Jan 2018AY 2009-10

Bench: S/Shri N.S Saini & Pavan Kumar Gadale

For Appellant: NoneFor Respondent: Shri P.K.Mishra, CIT DR
Section 14ASection 801ASection 80ISection 8Q

…ing Officer has not disputed the submission of the assessee that no expenditure was incurred for making the investment. The CIT(A) has relied on the following judicial pronouncements: i) In S. A. Builders Ltd. vs. Commissioner of Income Tax (Appeals) & ANR. 288 ITR 1 (SC), it was held that interest on borrowed funds cannot be disallowed if the assessee has advanced interest-free loan to a sister-concern as a measure of commercial expediency. ii) The Hon’ble Allahabad High Court in CIT vs. Raj Kumar Singh & Co. (2007) 210 CTR (All) 483 has held that interest paid by assessee on money borrowed for repayment of a…

Dy.C.I.T.1(1), Raipur (Cg) vs. M/S Navbharat Press, Raipur (Cg)

In the result, appeal filed by Revenue is dismissed

ITA 160/BIL/2014[2010-11]Status: DisposedITAT Raipur15 Jan 2018AY 2010-11

Bench: : Shri N.S.Saini & Shri Pavan Kumar Gadale, Judical Member Dcit-1(1), Raipur-1 Vs Navbharat Press, Press Complex, G.E.Road, Raipur(C.G.)-492001 Pan No. : Aadfn 0350 R (Appellant) Tsednepser .. Revenue By : Shri Ajit Kumar Laskar, Dr Assessee By : None(Written Submission) Date Of Hearing : 12/01/2018 Date Of Pronouncement 15/01/2018 आदेश / O R D E R Per Shri N.S.Saini, Am: This Is An Appeal Filed By The Revenue Against The Order Of The Cit(A), Raipur, Dated 12.06.2014 For The Assessment Year 2010-2011. 2. The Revenue Has Raised The Following Grounds :- “1. Whether In Law & On Facts & Circumstances Of The Case, The Cit(A) Has Erred In Deleting The Disallowance Of Interest U/S.36(1)(Iii) Of The Income Tax Act, 1961 Of Rs.41,54,811/- As Interest Bearing Funds Were Used For Non-Business Purposes.” 3. Brief Facts Of The Case Are That The Assessee Is A Partnership Firm Derives Income From Printing & Publishing Of Hindi Daily Newspaper “Nav Bharat” & English Daily “Central Chronicle” From Raipur. The Assessee Filed Its Return Of Income Declaring Total Income Of Rs.1,85,77,530/-. Thereafter The Ao Framed The Assessment U/S.143(3) Of The Act Determining The Total Income Of The Assessee At Rs.2,27,32,341/-.

For Appellant: None(Written Submission)For Respondent: Shri Ajit Kumar Laskar, DR
Section 143(3)Section 36(1)(iii)Section 44A

…nstrained to dispose of the properties to meet his financial needs and this would have interrupted the credit facilities being enjoyed by the appellant firm. In S. A. Builders Ltd. vs. Commissioner of Income Tax (Appeals) & ANR. (2006) 206 CTR (SC) 63J:(2007) 288 ITR 1 (SC):(2007) 158 Taxman 74 (SC)/ (2007) 158 Taxman 230 (SC) the Apex Court held that interest on borrowed funds cannot be disallowed if the assessee has advanced interest-free loan to a sister-concern as a measure of commercial expediency. Relying on Supreme Court decision in S.A. Builders Ltd. vs. CIT & Anr. (2006) 206 CTR (SC) 631 : (2007) 288 ITR…

Original Kerala Jewellers, Chennai vs. DCIT, Chennai

ITA 196/CHNY/2017[2012-13]Status: DisposedITAT Chennai11 Jan 2018AY 2012-13

Bench: Shri George Mathan & Shri A. Mohan Alankamonyआयकरअपीलसं./I.T.A.Nos. 191 To 196/Mds/2017 (िनधा"रणवष" / Assessment Years: 2007-08 To 2012-13) Vs The Deputy Commissioner Of M/S. Original Kerala Jewellers, No.91, Sundaram Complex, Income Tax, Usman Road, T. Nagar, Non Corporate Circle – 2, Chennai – 600 017. Chennai -34. Pan:Aaafo0104F (अपीलाथ"/Appellant) (""यथ"/Respondent) : Shri R. Vijayaraghavan, Advocate अपीलाथ"क"ओरसे/ Appellant By ""यथ"क"ओरसे/Respondent By : Smt. S. Vijayaprabha, Jcit

For Respondent: Smt. S. Vijayaprabha, JCIT
Section 147Section 250(6)Section 36(1)(iii)Section 43B

…on the diverted fund for non-business purposes cannot be claimed as allowable deduction U/s.36(1)(iii) of the Act”. The Ld.CIT(A) upheld the view of the Ld.AO further relying in the case SA Builders Ltd vs. CIT(A) decided by the Hon’ble Apex Court reported in 288 ITR 1. 12.1 Before us the Ld.AR submitted that the assessee firm had extended credit to the partner of the assessee firm out of non- interest bearing funds / own funds and therefore the above decisions referred by the Ld.Revenue Authorities is not applicable to the case of the assessee. He further argued stating that assessee’s fixed capital & reserves s…