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

Ashok Mittal vs. ITO, Ward-24(3)

In the result, the appeals filed by the assessee are partly allowed, the

ITA 3764/DEL/2004[2001-2002]Status: DisposedITAT Delhi30 Oct 2017AY 2001-2002

Bench: Shri R. K. Panda & Ms. Suchitra Kambleassessment Year : 2001-02 Shri Ashok Mittal, Ito, Ward- 24(3), 42, Sainik Farms, Vs. New Delhi. New Delhi. Pan : Aaspm6882C (Appellant) (Respondent) Assessment Year : 2001-02 Acit, Circle- 24(1), Shri Ashok Mittal, New Delhi. Vs. 42, Sainik Farms, New Delhi. Pan : Aaspm6882C (Appellant) (Respondent)

For Appellant: Shri Gautam Jain, AdvFor Respondent: Shri R. C. Dande, Sr.DR
Section 143(3)

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER Assessment Year : 2001-02 Shri Ashok Mittal, ITO, Ward- 24(3), 42, Sainik Farms, Vs. New Delhi. New Delhi. PAN : AASPM6882C (Appellant) (Respondent) Assessment Year : 2001-02 ACIT, Circle- 24(1), Shri Ashok Mittal, New Delhi. Vs. 42, Sainik Farms, New Delhi. PAN : AASPM6882C (Appellant) (Respondent) C.O. No.257/Del/2009 (In ITA No.2997/Del/2009) Assessment Year : 2001-02 Shri Ashok Mittal, ACIT, Circle- 24(1), 42, Sainik Farms, Vs. New Delhi. New Delhi. PAN : AAS…

The Bombay Dyeing & Mfg. Co. Ltd, Mumbai vs. DCIT RG 2(1)(1), Mumbai

ITA 1716/MUM/2017[2012-13]Status: DisposedITAT Mumbai27 Oct 2017AY 2012-13

Bench: Sri Mahavir Singh, Jm & Sri N K Pradhan, Am The Bombay Dyeing & Mfg. Co. Dy. Commissioner Of Limited Income Tax, Range- Neville House, J.N. Heradia Marg, 2(1)(1), Mumbai Vs. Ballard Estate, Mumbai-400 001 Room No.561, Aayakar Pan No.Aaact2328K Bhavan, Mumbai-400 020

Section 144C(5)

…t of the Company, corporate 24 The Bombay Dyeing & Mfg. Co. Limited (A.Y:2012-13) 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 (SC), 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 assume th…

Sbi Capitalmarkets Ltd vs. DCIT Sp. RG 27

The appeal of the AO stands dismissed

ITA 294/MUM/1999[1994-95]Status: DisposedITAT Mumbai27 Oct 2017AY 1994-95
For Appellant: Shri Nitesh Joshi-ARFor Respondent: Shri BCS Naik-CIT-DR & Saurabh Kumar Rai
Section 254(1)

…आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, , , , मुंबई आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण मुंबई मुंबई “आई मुंबई आई आई ” ” ” ” खंडपीठ आई खंडपीठ खंडपीठ खंडपीठ Income-tax Appellate Tribunal “I”Bench Mumbai सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"", लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं रिवश सूद एवं रिवश सूद रिवश सूद, "याियक रिवश सूद "याियक "याियक सद"य "याियक सद"य सद"य सद"य Before S/Sh. Rajendra,Accountant Member & Ravish Sood, Judicial Member आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं./I.T.A./1380/Mum/1999, िनधा"रण अपील िनधा"रण िनधा"रण वष" िनधा"रण वष" वष" /Assessment Year: 1995-96 वष" आयकर आयक…

ACIT, Cir-3(TDS), Kolkata vs. Vodafone Mobile Services Ltd. (Formerly Known As Vodafone South Ltd.), Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 233/KOL/2016[2012-2013]Status: DisposedITAT Kolkata26 Oct 2017AY 2012-2013

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

ACIT, Circle - 3 (TDS), Kolkata vs. Vodafone Mobile Services Ltd. (Formerly Known As Vodafone East Ltd.), Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 232/KOL/2016[2012-2013]Status: DisposedITAT Kolkata26 Oct 2017AY 2012-2013

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

Vodafone Mobile Services Ltd., Kolkata vs. ACIT, TDS, Cir-59 (TDS) Kolkata, Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 137/KOL/2016[2012-2013]Status: DisposedITAT Kolkata26 Oct 2017AY 2012-2013

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

Vodafone Mobile Services Ltd., Kolkata vs. ACIT, TDS, Cir-59 (TDS) Kolkata, Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 136/KOL/2016[2012-2013]Status: DisposedITAT Kolkata26 Oct 2017AY 2012-2013

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

ACIT, Cir-3(TDS), Kolkata vs. Vodafone South Ltd., Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 1540/KOL/2015[2010-2011]Status: DisposedITAT Kolkata26 Oct 2017AY 2010-2011

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

ACIT, Cir-3(TDS), Kolkata vs. Vodafone South Ltd., Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 1539/KOL/2015[2010-2011]Status: DisposedITAT Kolkata26 Oct 2017AY 2010-2011

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

ACIT, Cir-3(TDS), Kolkata vs. Vodafone East Ltd., Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 1538/KOL/2015[2010-2011]Status: DisposedITAT Kolkata26 Oct 2017AY 2010-2011

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

ACIT, Cir-3(TDS), Kolkata vs. Vodafone East Ltd., Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 1537/KOL/2015[2010-2011]Status: DisposedITAT Kolkata26 Oct 2017AY 2010-2011

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

Vodafone South Ltd., Kolkata vs. DCIT, (TDS) Cir-59 (TDS), Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 1502/KOL/2015[2011-2012]Status: DisposedITAT Kolkata26 Oct 2017AY 2011-2012

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

Vodafone South Ltd., Kolkata vs. DCIT, (TDS) Cir-59 (TDS), Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 1501/KOL/2015[2010-2011]Status: DisposedITAT Kolkata26 Oct 2017AY 2010-2011

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

Vodafone Mobile Services Ltd., Kolkata vs. DCIT, (TDS) Cir-59 (TDS), Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 1500/KOL/2015[2011-2012]Status: DisposedITAT Kolkata26 Oct 2017AY 2011-2012

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

Vodafone Mobile Services Ltd., Kolkata vs. DCIT, (TDS) Cir-59 (TDS), Kolkata

Appeals are partly allowed and that of Revenue stand dismissed

ITA 1499/KOL/2015[2010-2011]Status: DisposedITAT Kolkata26 Oct 2017AY 2010-2011

Bench: Shri Aby.T Varkey & Shri Waseem Ahmed

Section 191Section 194HSection 201(1)Section 250

…or is not given any encouragement, the business will not grow. In that view of the mate, in view of the observations of the Supreme Court, the Income Tax Officer cannot enter into the shoes of the assessee. (S.A. Builder Vs. Commissioner of Income Tax- (2007) 288 ITR 1 (SC) (x) Regarding providing a vehicle it was very clear that by providing vehicle and getting list of expenses will not decide the relation-ship of Principal and Agent. 48. In our considered opinion, Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Dist…

ACIT, New Delhi vs. Sh. Rajesh Kalra, New Delhi

In the result, appeal of the Revenue is dismissed

ITA 6675/DEL/2013[2011-12]Status: DisposedITAT Delhi25 Oct 2017AY 2011-12

Bench: Shri G. D. Agrawal & Shri Amit Shukla

For Respondent: Shri P.C. Yadav, Advocate
Section 131Section 132Section 143(3)Section 153C

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”, NEW DELHI BEFORE SHRI G. D. AGRAWAL, PRESIDENT & SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. No.6675/DEL/2013 Assessment Year:2011-12 ACIT v. Rajesh Kalra Central Circle 12 Prop. M/s Rayana Graphic Machinery New Delhi 89, DSIDC Sheds, Okhla Industrial Area, New Delhi TAN/PAN:AAJPK8606M (Applicant) (Respondent) Applicant by: Shri Vijay Varma, CIT (DR) Respondent by: Shri P.C. Yadav, Advocate Date of hearing: 02 08 2017 Date of pronouncement: 25 10 2017 O R D E R PER AMIT SHUKLA, J.M.: The aforesaid appeal has been filed by the Revenue against impugned order dat…

Essar Power Ltd, Mumbai vs. Addl CIT RG 5(1), Mumbai

In the result, this appeal by the assessee stands partly allowed

ITA 1849/MUM/2015[2009-10]Status: DisposedITAT Mumbai17 Oct 2017AY 2009-10
For Appellant: Shri Vijay MehtaFor Respondent: Shri K. S. Rajendrakumar
Section 115JSection 143(3)Section 144CSection 144C(13)Section 14ASection 271Section 36

…आयकर अपील"य अ"धकरण “ई” "यायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI SANDEEP GOSAIN, JM आयकर अपील सं./I.T.A. No. 1849/Mum/2015 ("नधा"रण वष" / Assessment Year: 2009-10) Essar Power Limited Addl. CIT, Range – 5(1) बनाम/ Equinox Business Park, Tower 2, Mumbai Off BKC, LBS Marg, Kurla (W), Vs. Mumbai-400 070 "थायी लेखा सं./जीआइआर सं./PAN/GIR No. AAACE 0895 J (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant by : Shri Vijay Mehta ""यथ" क" ओर से/Respondent by : Shri K. S. Rajendrakumar सुनवाई क" तार"ख / : 18.08.2017 Date of Hearing…

ITO, New Delhi vs. M/S. Panchkula Finvest (P) Ltd., New Delhi

The appeal of the revenue is dismissed without any cost as prayed for by the Ld AR of the assessee

ITA 2709/DEL/2017[2012-13]Status: DisposedITAT Delhi17 Oct 2017AY 2012-13

Bench: Shri B.P. Jain

For Appellant: Shri P.C. Yadav, AdvFor Respondent: Shri T. Vasanthan Sr. DR
Section 143(3)

…been incurred in capital filed or revenue filed. It is also a settled position of law that it is 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 disp…

ITO, New Delhi vs. M/S. Delhi Press Samachar Patra Pvt. Ltd., New Delhi

In the result ground No. 1 of the appeal of the Revenue is dismissed

ITA 1433/DEL/2013[2008-09]Status: DisposedITAT Delhi12 Oct 2017AY 2008-09

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

For Appellant: Shri Manish Kumar, AdvFor Respondent: Shri Anshu Prakash, Sr. DR
Section 143(2)Section 40A(2)Section 40A(2)(b)

…y not have been incurred under any legal obligation, but yet it is allowable as a business expenditure it was incurred on grounds of commercial expediency from a prudent businessman point of view. The Hon‟ble Supreme Court in the case of CIT v/s S.A.Builders (288 ITR 1). while agreeing with the view taken by the Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377 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…

Kuloday Technopack P. Ltd, Mumbai vs. ITO 8(2)(2), Mumbai

In the result, appeal of the assessee in ITA No

ITA 3300/MUM/2013[2009-10]Status: DisposedITAT Mumbai29 Sept 2017AY 2009-10

Bench: Shri Joginder Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No. 3300/Mum/2013 (नििाारण वर्ा / Assessment Year : 2009-10 ) आयकर अपीऱ सं./I.T.A. No. 2423/Mum/2014 (नििाारण वर्ा / Assessment Year : 2010-11)

For Appellant: Shri. M. SubramanianFor Respondent: Shri Rajesh Kumar Yadav,DR
Section 143(3)Section 154Section 172Section 172(1)Section 194CSection 195Section 40

…that assessee has to prove with reference to books of accounts that the assessee has utilised interest bearing funds for the purposes of business of assessee and he relied upon the decision of the Hon‟ble Supreme Court in the case of S.A Builders Ltd. (2007) 288 ITR 1(SC). Thus, it was fairly submitted by both the parties that this issue can be restored to AO for verification of contention of the assessee on merits in accordance with law. 20. We have considered rival contentions and perused the material on record including case laws. The authorities below have disallowed interest expenses to the tune of Rs. 35,3…