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.

How many judgments cite S.A. Builders Ltd. v. CIT?

1,484 judgments on BharatTax cite S.A. Builders Ltd. v. CIT (288 ITR 1), spanning 2008 to 2026.

Which sections of the Income Tax Act does S.A. Builders Ltd. v. CIT come up under?

It is most often cited in judgments turning on Section 143(3), Section 36(1)(iii), Section 14A, Section 1961, Section 148, Section 147.

S.A. Builders Ltd. v. CIT (288 ITR 1)

ACIT 7(2), Mumbai vs. Rupee Finance and Management P.Tld, Mumbai

In the result, appeals filed by the assessee for AYrs

ITA 5122/MUM/2014[2010-11]Status: DisposedITAT Mumbai26 Apr 2017AY 2010-11

Bench: Shri Saktijit Dey () & Shri Ashwani Taneja ()

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

…ons of the assessee. It was the assessee, who was best judge of his business and the AO was nobody to dictate how the business was to be carried out by the assessee. He also placed reliance upon the judgment of Hon’ble Supreme Court in the case of SA Builders 288 ITR 1 (SC) for the proposition that once the amount borrowed is found to be utilized for the purposes of the business of the assessee, then no disallowance of interest can be made by the AO. 15. Per contra, Ld. DR vehemently supported the orders of the lower authorities and submitted that no prudent businessman would carry on the business in this manner.…

DCIT, New Delhi vs. M/S. Mira Exim Ltd., New Delhi

In the result, the Appeal of the Revenue and the Cross Objection of the assessee are dismissed

ITA 125/DEL/2014[2009-10]Status: DisposedITAT Delhi24 Apr 2017AY 2009-10

Bench: Shri I.C. Sudhir & Shri B.P. Jainassessment Year 2009-10 Dcit, Vs. Mira Exim Ltd. Circle-6(1), Room No.413, 523-24, World Trade C.R. Building I.P. Estate, Centre, New Delhi. Barakhamba Road, New Delhi. Pan: Aaacm 2066M (Appellant) (Respondent)

For Respondent: S/Shri H.K. Chaudhary CIT-DR and Rajesh Kumar, Sr.D.R

Section 40Section 9Section 9(1)(vii)

…ercial expediency of the assessee but being in the factually opposition reflected from the record of the assessee, the onus that laid on it stood discharged. " ITA No.125/Del/2014 & CO No.256/Del/2014 14 10.1 In the case of S.A. Builders Ltd. Vs. CIT (2007) 288 ITR 1 (SC) it is held that "The matrix of the case is that the assessee borrowed money from the bank and lent it to its sister concern free of interest. The Apex Court discussed the concept of commercial expediency which was hitherto not discussed in the lower forums including the High Court. Also held that the business expenditure may not have been incu…

Pradeep Kumar Himmatramka, Jaipur vs. ITO, Jhunjhunu

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

ITA 140/JPR/2017[2010-11]Status: DisposedITAT Jaipur18 Apr 2017AY 2010-11

Bench: Ao & No Defect Whatsoever Was Pointed Out In The Same, Thus The Observation Of The Ao & Ld. Cit(A) That The Assessee Has Not Maintained Stock Records Deserves To Be Excluded & Ignored

For Appellant: Shri Manish Agarwal, CAFor Respondent: Smt. Poonam Rai, DCIT-. DR

Section 145(3)Section 54B

…assessee to this effect relied on following case laws:- 1. ITO vs. Triveni Farma, 35 TW 64 (Jaipur Bench) 2. Mukesh K Shah vs. ITO, 92 TTJ 1060 (Mumbai Bench) 10 Shri Pradeep Kumar Himmatramka vs. ITO, Ward- 2 , Jhunjhunu . 3. S.A. Builders Ltd. vs. CIT , 288 ITR 1 (SC) 4. Empire Jute Co. Ltd. vs. CIT , 124 ITR 1 (SC) 3.3 On the other hand, the ld. DR relied on the orders of the lower authorities. 3.4 I have heard the rival contentions and perused the materials available on record. It is noted from the assessment records that the assessee during the year under consideration had assessee had debited a sum…

Laxmi Narayan Himmatramka, Jaipur vs. ITO, Jhunjhunu

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

ITA 973/JPR/2016[2010-11]Status: DisposedITAT Jaipur18 Apr 2017AY 2010-11

For Appellant: Shri Manish Agarwal, CAFor Respondent: Smt. Poonam Rai, DCIT-. DR

Section 145(3)

…e the books of account of the assessee has been rejected, therefore, the estimated addition has been made. It is also noted that the ld. AR of the assessee to this effect relied on the decision of Hon'ble Supreme Court in the case of S.A. Builders vs. CIT , 288 ITR 1 and Empire Jute Co. Ltd. vs. CIT,124 1. Therefore, In view of above decisions and various others decisions of Hon'ble High Court, no separate adhoc disallowance out of the expenses debited in the profit and loss account under the heads wages, general expenses and salary to staff is not justified. Hence, looking to the present facts and circumsta…

DCIT, Chennai vs. M/S. Shriram Sepl Composites Pvt.Ltd., Sriperambudur

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

ITA 2741/CHNY/2016[2012-13]Status: DisposedITAT Chennai13 Apr 2017AY 2012-13

Bench: Shri N.R.S. Ganesan & Shri D.S. Sunder Singhआयकर अपील सं./Ita No.2741/Mds/2016 "नधा"रण वष" / Assessment Year : 2012-13

For Appellant: Shri Supriyo Pal, JCITFor Respondent: Shri R. Sivaraman, Advocate

Section 14ASection 36(1)(iii)

…requirement of subsidiary company and its overhead cost. According to the Ld. counsel, therefore, the advance made by the assessee is for commercial expediency. The Ld.counsel submitted that in view of judgment of Apex Court in S.A. Builders Limited v. CIT (288 ITR 1), the CIT(Appeals) has rightly allowed the claim of the assessee. 4. On a query from the Bench how M/s Shriram Composites Ltd. is a sister company of the assessee? What is the shareholding pattern? Whether the assessee-company is holding major shares in M/s Shriram Composites Ltd.? The Ld.counsel could not furnish any of the details. 5. We ha…

ITO 1(3)(2), Mumbai vs. Sameta Exports P. Ltd, Mumbai

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

ITA 2386/MUM/2014[2008-09]Status: DisposedITAT Mumbai13 Apr 2017AY 2008-09

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

…d interest of ` 90,000/- pertaining to a fixed loan. The learned CIT(A) noticed that the disallowance made in A.Y. 2004-05 & 2006-07 have been deleted by his predecessor by following the decision rendered by Hon'ble Supreme Court in the case of S.A. Builders (288 ITR 1). Accordingly, by following the decision of his predecessor, he directed the Assessing Officer to delete the above said interest disallowance. Aggrieved, the Revenue has filed this appeal before us. 3. Learned Departmental Representative submitted that the revenue has challenged the relief granted by the learned CIT(A) in A.Y. 2004-05 and 2006- 07…

DCIT, Chennai vs. Mustang Trading & Investments Pvt. Ltd., Chennai

In the result, the appeal of the Revenue is dismissed

ITA 3309/CHNY/2016[2012-13]Status: DisposedITAT Chennai12 Apr 2017AY 2012-13

Bench: Shri N.R.S. Ganesan & Shri D.S.Sunder Singh

For Appellant: Mr.G.Gireesh, CAFor Respondent: 22.02.2017

Section 32Section 36(1)(iii)

…has rightly made the impugned disallowance. 3.2 It is submitted that the assessee failed to substantiate that the advances given to subsidiaries / associate companies was made as a measure of commercial expediency as held in the case of CIT vs S.A.Builders (288 ITR 1). 3.3 Having regard to the decision of Hon’ble High Courts in the cases of CIT v. Abhishek Industries Ltd. (286 ITR 1)(P & H) and CIT v. V.I. Baby & Co. (254 ITR 248)(Ker.), the CIT(A) ought to have upheld the impugned disallowance made u/s.36(1)(iii). 4. For these and other grounds that may be adduced at the time of hearing, it is prayed that th…

Splendor Shelters P.Ltd, Dombivali vs. Asst CIT Cir 1, Kalyan

In the result, the appeal of the assessee is partly allowed as indicated above

ITA 3402/MUM/2016[2010-11]Status: DisposedITAT Mumbai31 Mar 2017AY 2010-11

Bench: Shri C.N. Prasad, Jm & Shri Rajesh Kumar, Am Splendor Shelters Pvt Ltd., Asstt. Commissioner Of Income Tax Circle - 1, 1St Floor, G-2, Ravideep, फनधभ/ Near Sarvesh Hall, Mohan Plaza, Wayale Nagar, Vs. Tilak Road, Khadakpada, Dombivili (E)-421201 Kalyan (W)-421201. स्थधमी रेखध सं./ Pan : Aafcs8992E (अऩीरधथी /Appellant) (प्रत्मथी / Respondent) : अऩीरधथी की ओय से / Assessee By : Shri Devdatta Mainkar प्रत्मथी की ओय से/ Revenue By : Ms.Anupama Singla

For Appellant: Shri Devdatta MainkarFor Respondent: Ms.Anupama Singla

Section 250Section 36(1)(iii)

…customer to the tune of Rs.1,59,50,000/- as against the monies advances to the associate concerns of Rs.1,01,43,559/-. In support of his contention, the ld.AR relied on the decision of the Hon’ble Supreme Court in the case of S.A. Builders Ltd. vs CIT [2007] 288 ITR 1 (SC). The ld. AR, lastly, contended that it is for the assessee how to conduct the business and protect the 5 interest of the business and not the revenue to dictate the terms how to run the business. Finally, the ld.AR prayed that since the assessee has sufficient funds, the disallowance made by the AO and confirmed by the FAA amounting to Rs.8,72…

DCIT 8(3)(1), Mumbai vs. Urban Infrastructure Holding P.Ltd, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 1979/MUM/2015[2009-10]Status: DisposedITAT Mumbai31 Mar 2017AY 2009-10

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm Dcit- 8(3)(1), Mumbai – Vs. Urban Infrastructure Holding Pvt. Ltd., 1St Floor, 400 020 Jai Centre, 34 Pd Mello Road, Opp. Rd Gate, Masjid – 400 009 Pan/Gir No. Aajcs2680L Appellant) .. Respondent)

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

…is the most important yardstick for the allowability of deduction under Section 36 (1) (iii) of Income Tax Act, 1961. While explaining the meaning of this phrase the Hon'bIe Supreme Court in the case of S. A. Builders Ltd., vs. CIT(A), Chandigard reported in 288 ITR 1 has used the word "commercial expediency". By using this phrase Hon'ble Supreme Court has given a new dimension and clarified the concept further. In the judgment, the Supreme Court has defined commercial expediency' as "an expression of wide import and' includes such expenditure 'as a prudent ' businessman incurs' for the purpose of business. The…

DCIT 3(2), Mumbai vs. Lml Ltd, Mumbai

The appeal of the revenue is dismissed

ITA 4396/MUM/2013[2009-10]Status: DisposedITAT Mumbai31 Mar 2017AY 2009-10

Bench: Shri R.C. Sharma, Am & Shri Ravish Sood, Jm आमकय अऩीर सं./ I.T.A. No.4396/Mum/2013 (निर्धारण वषा / Assessment Year: 2009-10) Dcit 3(2) Lml Ltd. बिधम/ R. Nho, 674 6Th Floor, Aayakar 714, Raheja Chambers, Bhavan, M.K. Rd. Mumbai Nariman Point Vs. 400020 Mumbai 400021 स्थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaacl0141N (अऩीराथी/Appellant) (प्रत्मथी / Respondent) :

For Appellant: Shri M.C. OmiFor Respondent: Shri Sunil Nahta

Section 139(1)Section 143(1)Section 143(2)Section 143(3)Section 36Section 36(1)(VA)Section 36(1)(va)Section 43B

…n the order passed by his predecessortaking a similar view in the case of the assessee company for A.Y. 2000-01 and 2006-07, as well as fortified his view on the basis of the judgment of the Hon’ble Supreme Court in the case of S.A. Builders Vs. CIT(A) (2007) 288 ITR 1 (SC). The CIT(A) thus, on the aforesaid basis deleted the aforesaid addition of Rs.1,81,81,940/-. 10. The revenue being aggrieved with the order of the CIT(A) therein deleting the disallowance of Rs.1,81,81,940/- made under Sec. 36(1)(iii), had carried the matter in appeal before us. The ld. D.R. assailing the order of the CIT(A), therein submitte…

Strides Arcolab Ltd, Navi Mumbai vs. ACIT 10(3), Mumbai

ITA 8540/MUM/2010[2006-07]Status: DisposedITAT Mumbai31 Mar 2017AY 2006-07

Bench: Shri G.S. Pannu, Am & Shri Ravish Sood, Jm आयकर अपील सं./I.T.A. No. 8540/Mum/2010 (निर्धारण वर्ा / Assessment Year: 2006-07) Strides Shasun Limited The Asst. Commissioner Of [Formerly Known As Strides Income Tax Circle-10(3) Acrolab Limited], Mumbai बिधम/ 201 Devarata, Vs. Sector 17, Vashi, Navi Mumbai – 400 703. स्थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcs8104P (Appellant) : ( Respondent)

For Appellant: Shri. Nitesh JoshiFor Respondent: Shri. N.K Chand, CIT

Section 10Section 115JSection 143(1)Section 143(2)Section 143(3)Section 143(3)(ii)Section 144C(5)Section 14ASection 57Section 92C

…P a g e | 1 IN THE INCOME TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI BEFORE SHRI G.S. PANNU, AM AND SHRI RAVISH SOOD, JM आयकर अपील सं./I.T.A. No. 8540/Mum/2010 (निर्धारण वर्ा / Assessment Year: 2006-07) Strides Shasun Limited The Asst. Commissioner of [Formerly Known as Strides Income Tax Circle-10(3) Acrolab Limited], Mumbai बिधम/ 201 Devarata, Vs. Sector 17, Vashi, Navi Mumbai – 400 703. स्थायीलेखासं./जीआइआरसं./PAN/GIR No. AADCS8104P (Appellant) : ( Respondent) अपीलाथी की ओर से/ Appellant by : Shri. Nitesh Joshi प्रत्यथी की ओर से/Respondent by : Shri. N.K Chand, CIT सुनवाई की तारीख/ : 20/01/2017 Date of Heari…

I.T.O WD-2(1), Kolkata vs. M/S Rajashree Vanijya Pvt. Ltd., Kolkata

In the result, the appeal of revenue is dismissed

ITA 1722/KOL/2013[2009-2010]Status: DisposedITAT Kolkata29 Mar 2017AY 2009-2010

Bench: Shri A. T. Varkey, Jm & Shri Waseem Ahmed, Am]

Section 36(1)(iii)

…r and it was given to the sister concern because of commercial expediency. Before the AO, the Ld. AR of the assessee relied on the decision of the Hon’ble Supreme Court in the case of M/s. S. A. Builders Ltd. Vs. CIT 2 Rajashree Vanijya Pvt. Ltd., AY 2009-10 208 ITR 1 (SC) and argued that the loan was borrowed by the assessee, which have been given to the sister concern due to commercial expediency and the amount was utilized for the business purpose and there was direct nexus between the borrowing and the advance given to the sister concern and demonstrated by evidences that the assessee got back the entire adv…

M/S. Sical Multimodal and Rail Transport Ltd., Chennai vs. ACIT, Chennai

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

ITA 2565/CHNY/2016[2012-13]Status: DisposedITAT Chennai29 Mar 2017AY 2012-13

Bench: Shri N.R.S. Ganesan & Shri D.S. Sunder Singhआयकर अपील सं./Ita No.2565/Mds/2016 "नधा"रण वष" / Assessment Year : 2010-11

For Appellant: Sh. R. Vijayaraghavan, AdvocateFor Respondent: Shri Supriyo Pal, JCIT

…Income-tax Rules, 1962. According to the Ld. counsel, the borrowed funds were invested in the joint venture company for the purpose of business, therefore, there cannot be any disallowance in view of the judgment of Apex Court in S.A. Builders Ltd. v. CIT (288 ITR 1). According to the Ld. counsel, Rule 8D is applicable only in respect of investment made for earning exempted income. Since the assessee invested the funds for the purpose of business in the joint venture company and not for the purpose of earning any exempted income, according to the Ld. counsel, the provisions of Rule 8D cannot be made applica…