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 367,164 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

DCIT Cen Cir 13, Mumbai vs. Parinee Realty P. Ltd, Mumbai

In the result, both the appeals of the Revenue and Cross Objections are dismissed

ITA 6215/MUM/2014[2010-11]Status: DisposedITAT Mumbai09 Nov 2016AY 2010-11

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

Section 143(3)

…upon the judgment in the following cases:  CIT vs Reliance Utilities and Power Ltd (2009) 313 ITR 340  Woolcombens of India Ltd Vs. CIT(1982) 134 ITR 209(Cal)  East India Pharmaceutical. Works Ltd vs. CIT (1997) 224 ITR 627  S.A.Builders vs. CIT(A) (2007) 288 ITR 1 (SC)  CIT vs Banswara Fabrics Ltd (2004) 267 ITR 398 (Raj)  UCO Bank vs CIT (1999) 237 ITR 889 (SC)  CIT vs Asian Hotels Ltd (2010) 323 ITR 490 (Delhi) 5.3.2. I find merit in the submission of the appellant that the no additions can be made on Notional income on the basis that the income should have been earned by the appellant. The appellant is…

DCIT Cen Cir 13, Mumbai vs. Parinee Realty P. Ltd, Mumbai

In the result, both the appeals of the Revenue and Cross Objections are dismissed

ITA 6214/MUM/2014[2010-11]Status: DisposedITAT Mumbai09 Nov 2016AY 2010-11

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

Section 143(3)

…upon the judgment in the following cases:  CIT vs Reliance Utilities and Power Ltd (2009) 313 ITR 340  Woolcombens of India Ltd Vs. CIT(1982) 134 ITR 209(Cal)  East India Pharmaceutical. Works Ltd vs. CIT (1997) 224 ITR 627  S.A.Builders vs. CIT(A) (2007) 288 ITR 1 (SC)  CIT vs Banswara Fabrics Ltd (2004) 267 ITR 398 (Raj)  UCO Bank vs CIT (1999) 237 ITR 889 (SC)  CIT vs Asian Hotels Ltd (2010) 323 ITR 490 (Delhi) 5.3.2. I find merit in the submission of the appellant that the no additions can be made on Notional income on the basis that the income should have been earned by the appellant. The appellant is…

M/S Jupiter Entertainment Ventures (P) Ltd vs. ACIT

In the result, the appeal of the revenue is dismissed

ITA 792/BANG/2013[2009-10]Status: DisposedITAT Bangalore03 Nov 2016AY 2009-10

Bench: Shri A.K. Garodia & Smt. Asha Vijayaraghavanassessment Year : 2009-10

For Appellant: Smt. Sheetal Borkar, AdvocateFor Respondent: Ms. Neera Malhotra, CIT(DR)

…f interest-free advances made to the sister concerns in the instant case. It is also the argument of the appellant that the interest-free advances were for commercial expediency. Therefore, the decision of the Hon'ble Supreme Court in the case of SA Builders [288 ITR 1] is applicable to the instant case. The AO relied on the following decisions i. M/s. Continental Construction Ltd. (195-ITR-81) ii. Hindustan Conductors P. Ltd. (240-ITR-762(Bom. H.C) iii. K. Somasundaram & Bros. (238-ITR-939(Mad. H.C) iv. Abhishek Industries Ltd. (286-ITR-1 (P&H H.C) The decision in the case of M/ s. Continental Construction Ltd.…

Sundaram Fasteners Limited, Chennai vs. DCIT, Chennai

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

ITA 813/CHNY/2016[2011-12]Status: DisposedITAT Chennai28 Oct 2016AY 2011-12

Bench: Shri N.R.S. Ganesan & Shri Abraham P. Georgeआयकर अपील सं./Ita No.813/Mds/2016 "नधा"रण वष" / Assessment Year : 2011-12 M/S Sundaram Fasteners Ltd., The Deputy Commissioner Of 98-A, 7Th Floor, V. Income Tax, Dr. Radhakrishnan Salai, Corporate Circle – 6(2), Mylapore, Chennai - 600 004. Chennai - 600 034. Pan : Aaacs 8779 D (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri Vikram Vijayaraghavan, AdvocateFor Respondent: Dr. Milind Madhukar Bhusari, CIT

…ding to the Ld. counsel, the assessee had sufficient surplus funds by way of reserves and paid up capital. Therefore, there cannot be any disallowance. The Ld.counsel also placed his reliance in the judgment of Apex Court in S.A. Builders Ltd. v. CIT (2007) 288 ITR 1. 15. On the contrary, Dr. Milind Madhukar Bhusari, the Ld. Departmental Representative, submitted that the case of the assessee for the assessment year 2011-12 is totally different from 10 I.T.A. No.813/Mds/16 the assessment year 2010-11. Therefore, the order of the DRP cannot be relied upon during the year under deduction. During this year, th…

B.K. Khare & Company, Mumbai vs. Asst CIT 11(Hq), Mumbai

In the result, appeal of the assessee is allowed

ITA 4500/MUM/2014[2009-10]Status: DisposedITAT Mumbai24 Oct 2016AY 2009-10

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm आमकय अऩीर सं./Ita No.4500/Mum/2014 (निर्धारण वषा / Assessment Year :2009-2010) M/S. B.K. Khare & Vs. Acit (11) (2), Mumbai Company, 706-707, Sharda Chambers New Marine Lines, Mumbai – 400 0201 स्थामी रेखा सं./ जीआइआय सं./ Pan/Gir No. : Aaafb0265E (अऩीराथी /Appellant) (प्रत्मथी / Respondent) ..

Section 143(3)Section 37(1)Section 80

…IN THE INCOME TAX APPELLATE TRIBUNAL “B”, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN, JM आमकय अऩीर सं./ITA No.4500/Mum/2014 (निर्धारण वषा / Assessment Year :2009-2010) M/S. B.K. Khare And Vs. ACIT (11) (2), Mumbai Company, 706-707, Sharda Chambers New Marine Lines, Mumbai – 400 0201 स्थामी रेखा सं./ जीआइआय सं./ PAN/GIR No. : AAAFB0265E (अऩीराथी /Appellant) (प्रत्मथी / Respondent) .. Assessee by Shri H.P.Malwani Revenue by Shri Randhir Gupta Date of Hearing 26/07/2016 Date of Pronouncement 24/10/2016 आदेश / O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the or…

Hero Motocorp Limited, New Delhi vs. JCIT, New Delhi

In the result appeal of the assessee in ITA No

ITA 1545/DEL/2015[2010-11]Status: DisposedITAT Delhi24 Oct 2016AY 2010-11

Bench: Sh. I. C. Sudhir & Shri Prashant Maharishihero Motocorp Limited, Jcit, 34, Basant Lok, Vasant Range-1, New Delhi Vs. Vihar, New Delhi Pan: Aaach0812J (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community Vs. New Delhi Centre, Basant Lok, Vasant Vihar, New Delhi-110057 (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. NC Sawain, CIT DR
Section 143Section 143(3)Section 144CSection 92C

…instances of higher purchase price were, therefore, only because of commercial factors/business considerations, the reasonableness of which is to be seen from the point of view of the businessman and cannot be dictated by the Revenue. [Refer: SA Builders Ltd: 288 ITR 1 (SC)]. he further stated that apart from the provisions of section 40A(2), there is no provision under the Act, which clothes the assessing officer with the power to go into the issue of reasonableness of the expenditure incurred by an appellant. Where the party is not related in terms of 40A(2), there is no scope for the assessing officer to exami…

D.C.I.T Cir - 4, Kolkata vs. M/S Tata Tea Limited, Kolkata

In the result, the appeals in ITA No

ITA 2006/KOL/2013[2006-07]Status: DisposedITAT Kolkata21 Oct 2016AY 2006-07

Bench: Shri M.Balaganesh & Shri S.S. Viswanethra Ravi

Section 43(6)

…ns of commercial expediency. It is humbly submitted that granting of interest free advance was a commercial decision taken by the appellant company. Reliance in this regard is placed on the Supreme Court judgment in the case of S.A. Builders -vs. - CIT (2007) 288 ITR 1 (SC) wherein the SC held as under: "In order to decide whether interest on funds borrowed by the assessee to give an interest free loan to a sister concern (e.g. a subsidiary of the assessee) should be allowed as a deduction under section 36(l)(iii) of the Income Tax Act, 1961 one has to enquire whether the loan was given by the assessee as a measu…

D.C.I.T Cir - 12, Kolkata vs. M/S Jct Limited., Kolkata

In the result the appeal by the revenue is dismissed

ITA 1106/KOL/2013[2004-05]Status: DisposedITAT Kolkata19 Oct 2016AY 2004-05

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Dr.Arjun Lal Saini, Am] I.T.A Nos. 1106 To 1109/Kol/2013 Assessment Years : 2004-05, 2006-07,2007-08 & 2008-09 D.C.I.T., Circle-12, -Vs.- M/S. J.C.T. Ltd. Kolkata Kolkata [Pan : Aaacj 6733 E] (Appellant) (Respondent) For The Appellant : Shri Angam Shaiza, Cit For The Respondent : Shri A.K.Gupta, Fca

For Appellant: Shri Angam Shaiza, CITFor Respondent: Shri A.K.Gupta, FCA
Section 145Section 145ASection 43B

…f the loans & advances were given for the purpose of business consideration , interest on such loans & advances will not be disallowed. Reliance was placed on the decision of the Hon’ble Supreme Court in the case of S.A. Builders Ltd. Vs. CIT (Appeals) (2007) 288 ITR 1, Munjal Sales Corporation (2008) 298 ITR 298. The above decision has been followed in the case of CIT vs Rockman Cycle Industries Ltd (2009) 176 Taxman 21 (Punj. & Har). In view of the facts stated above, evidences and the aforementioned decisions, the Assessee pleaded that no interest ought to have been disallowed. 22. The CIT(A) deleted the addi…

ACIT, Circle - 1, Asansol vs. Burnpur Cement Ltd., Asansol

In the result, the appeal of the revenue is dismissed

ITA 28/KOL/2012[2008-09]Status: DisposedITAT Kolkata19 Oct 2016AY 2008-09

Bench: Shri M. Balaganesh, Am & Shri K. Narasimha Chary, Jm आयकर अपील सं./Ita No.28/Kol/2012 ("नधा"रण वष" / Assessment Year :2010-2011) Acit, Circle-I, Lower Vs. Brunpur Cement Ltd., 141, Chelidanga, Asansol-4 Cement House, Saradapally, Ashok Nagar, Asansol, District-Burdwan- 713304 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aacca 1999 B .. (अपीलाथ" /Appellant) (""यथ" / Respondent) राज"व क" ओर से /Revenue By : Shri Niraj Kumar Cit Dr "नधा"रती क" ओर से /Assessee By : Shri S.M.Surana Advocate सुनवाई क" तार"ख / Date Of Hearing : 26/08/2016 घोषणा क" तार"ख/Date Of Pronouncement 19/10/2016 आदेश / O R D E R Per M.Balaganesh, Am This Appeal Of The Assessee Arises Out Of The Order Of Learned Cit(A), Asansol, In Appeal No.296/Cit(A)/Asl/R-I/Asl/10-11 Dated 31.10.2011 Passed Against The Order Of Assessment Framed U/S.144 Of The Income Tax Act, 1961 (Hereinafter Referred To As The ‘Act’).

For Appellant: Shri S.M.Surana AdvocateFor Respondent: Shri Niraj Kumar CIT DR
Section 144

…at the payment has been made to compensate the said party for other transactions , no such transaction have been pointed out by him. The ld CITA also placed reliance on the decision of the Hon’ble Apex Court in the case of S.A.Buiilders Ltd vs CIT reported in 288 ITR 1 (SC) wherein it was held that the ld AO cannot dictate what would be reasonable expenditure once it is established that there is a nexus between the expenditure and the purpose of the business. It is not in dispute that the said agent is also seen to be the stockiest of the assessee and hence the ld AO himself had admitted the commercial relationsh…

Redington (India) Ltd., Chennai vs. DCIT, Chennai

In the result, the appeal of the Revenue is dismissed

ITA 1155/CHNY/2016[2011-12]Status: DisposedITAT Chennai18 Oct 2016AY 2011-12

Bench: Shri Chandra Poojari & Shri G. Pavan Kumar

For Appellant: Sh. R. Vijayaraghavan, AdvocateFor Respondent: Sh. Jayaram Raipura, CIT
Section 143(2)Section 143(3)Section 14A

…आयकर अपील"य अ"धकरण, ’डी’ "यायपीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI "ी चं" पूजार", लेखा सद"य एवं "ी जी. पवन कुमार, "या"यक सद"य केसम" BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER आयकर अपील सं./ITA No.1155/Mds/2016 "नधा"रण वष" / Assessment Year : 2011-12 M/s Redington (India) Ltd., The Deputy Commissioner of No.95, Mount Road, v. Income Tax, SPL Guindy House, Corporate Circle – 5(1), Guindy, Chennai - 600 032. Chennai - 600 034. PAN : AABCR 0347 P (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकर अपील सं./ITA No.1145/Mds/2016 "नधा"रण वष" / Asses…

DCIT, Chennai vs. Redington (India) Ltd., Chennai

In the result, the appeal of the Revenue is dismissed

ITA 1145/CHNY/2016[2011-12]Status: DisposedITAT Chennai18 Oct 2016AY 2011-12

Bench: Shri Chandra Poojari & Shri G. Pavan Kumar

For Appellant: Sh. R. Vijayaraghavan, AdvocateFor Respondent: Sh. Jayaram Raipura, CIT
Section 143(2)Section 143(3)Section 14A

…आयकर अपील"य अ"धकरण, ’डी’ "यायपीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI "ी चं" पूजार", लेखा सद"य एवं "ी जी. पवन कुमार, "या"यक सद"य केसम" BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER आयकर अपील सं./ITA No.1155/Mds/2016 "नधा"रण वष" / Assessment Year : 2011-12 M/s Redington (India) Ltd., The Deputy Commissioner of No.95, Mount Road, v. Income Tax, SPL Guindy House, Corporate Circle – 5(1), Guindy, Chennai - 600 032. Chennai - 600 034. PAN : AABCR 0347 P (अपीलाथ"/Appellant) (""यथ"/Respondent) आयकर अपील सं./ITA No.1145/Mds/2016 "नधा"रण वष" / Asses…

M/S Ananthpur Mining Corporation, Bellary vs. Joint Commissioner of Income Tax, Bangalore

In the result, the appeal of assessee is allowed

ITA 1354/BANG/2014[2009-10]Status: DisposedITAT Bangalore17 Oct 2016AY 2009-10

Bench: Shri Sunil Kumar Yadav & Shri A.K. Garodiaassessment Year : 2009-10

For Appellant: S/Shri Mayank Jain & Madhur Jain, AdvocatesFor Respondent: Ms. Neera Malhotra, CIT(DR)
Section 143

…use the incidental benefit has also accrued to the third party, it does not lead to the inference that assessee had not used the plot for its own business purpose. Reliance was placed upon the Hon’ble Apex Court judgment in the case of S.A. Builders v. CIT, 288 ITR 1 (SC) and it was submitted that the judgment is in the context of section 37 and section 36(1) (iii) wherein it was held by the Hon’ble Apex Court that expenditure for the purpose of business includes expenditure voluntarily incurred for commercial expediency and it is immaterial if a third party also benefits thereby. He submitted that under the…

Sundaram Fasteners Limited, Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee in ITA

ITA 1166/CHNY/2013[2008-2009]Status: DisposedITAT Chennai30 Sept 2016AY 2008-2009

Bench: Shri N.R.S. Ganesan & Shri Abraham P. George]

For Appellant: Shri. R. Vijayaraghavan, Adv

…mmercially expedient. Per contra, the ld. Authorised Representative supported the 22. orders of the Commissioner of Income Tax (Appeals) and submitted that by virtue of judgment of Apex Court in the case of S.A. Builders Ltd vs. CIT (A) and Another (2007) 288 ITR 1(SC) loans given to subsidiary were always deemed commercial expedient. According to him, M/s. SFIL was making investments and giving inter corporate loans to its subsidiaries in China since assessee could not directly invest in a subsidiary in China. Further, as per the ld. Authorised Representative in Revenue’s appeal for assessment year 2005-0…

Sundaram Fasteners Limited, Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee in ITA

ITA 1165/CHNY/2013[2007-2008]Status: DisposedITAT Chennai30 Sept 2016AY 2007-2008

Bench: Shri N.R.S. Ganesan & Shri Abraham P. George]

For Appellant: Shri. R. Vijayaraghavan, Adv

…mmercially expedient. Per contra, the ld. Authorised Representative supported the 22. orders of the Commissioner of Income Tax (Appeals) and submitted that by virtue of judgment of Apex Court in the case of S.A. Builders Ltd vs. CIT (A) and Another (2007) 288 ITR 1(SC) loans given to subsidiary were always deemed commercial expedient. According to him, M/s. SFIL was making investments and giving inter corporate loans to its subsidiaries in China since assessee could not directly invest in a subsidiary in China. Further, as per the ld. Authorised Representative in Revenue’s appeal for assessment year 2005-0…

ACIT, Chennai vs. M/S. Sundaram Fasterners Ltd., Chennai

In the result, the appeals of the assessee in ITA

ITA 675/CHNY/2012[2006-07]Status: DisposedITAT Chennai30 Sept 2016AY 2006-07

Bench: Shri N.R.S. Ganesan & Shri Abraham P. George]

For Appellant: Shri. R. Vijayaraghavan, Adv

…mmercially expedient. Per contra, the ld. Authorised Representative supported the 22. orders of the Commissioner of Income Tax (Appeals) and submitted that by virtue of judgment of Apex Court in the case of S.A. Builders Ltd vs. CIT (A) and Another (2007) 288 ITR 1(SC) loans given to subsidiary were always deemed commercial expedient. According to him, M/s. SFIL was making investments and giving inter corporate loans to its subsidiaries in China since assessee could not directly invest in a subsidiary in China. Further, as per the ld. Authorised Representative in Revenue’s appeal for assessment year 2005-0…

Sundram Fasteners Limited, Chennai vs. Addl.CIT, Chennai

In the result, the appeals of the assessee in ITA

ITA 591/CHNY/2012[2006-07]Status: DisposedITAT Chennai30 Sept 2016AY 2006-07

Bench: Shri N.R.S. Ganesan & Shri Abraham P. George]

For Appellant: Shri. R. Vijayaraghavan, Adv

…mmercially expedient. Per contra, the ld. Authorised Representative supported the 22. orders of the Commissioner of Income Tax (Appeals) and submitted that by virtue of judgment of Apex Court in the case of S.A. Builders Ltd vs. CIT (A) and Another (2007) 288 ITR 1(SC) loans given to subsidiary were always deemed commercial expedient. According to him, M/s. SFIL was making investments and giving inter corporate loans to its subsidiaries in China since assessee could not directly invest in a subsidiary in China. Further, as per the ld. Authorised Representative in Revenue’s appeal for assessment year 2005-0…

DCIT Cir 3, Thane vs. Shubh Builders & Developers, Mumbai

In the result, the appeal filed by the revenue is dismissed

ITA 2380/MUM/2014[2010-11]Status: DisposedITAT Mumbai30 Sept 2016AY 2010-11

Bench: Shri Rajendra & Shri C.N. Prasadआयकर अपील सं /I.Ta No. 2380/Mum/2014 ("नधा"रण वष" / Assessment Year:2010-11 The Dcit, Circle-3, M/S. Shubh Builders & बनाम/ B-Wing, Ashar It Park, Developers, Vs. Road No. 16Z, Ofice No. H. Dev Prayag, Wagle Ind. Estate, Gr Floor, Bhakti Mandir Road, Thane(W),-400 602 Pachpakhadi, Thane(W),-400 602 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Abffs 1174D .. (अपीलाथ" /Appellant) (""यथ" / Respondent) Shri Kailash Gaikwad अपीलाथ" ओर से/ Appellant By: ""यथ" क" ओर से/Respondent By: Shri Subodh Ratnaparakhi

For Respondent: Shri Subodh
Section 143(3)

…easonableness has to be judged from the point of view of a businessman and not revenue. This has been held in several judicial pronouncements as under: (i) CIT -Vs - Walchand & Co. (P) Ltd., 65ITR 381 (SC) (1967) (ii) S.A. Builders Ltd. - Vs - CIT (A) & Anr, 288 ITR 1 (SC) (2007) 9. Further we also find that the issue has been considered by the Ld. CIT(A) with reference to the submissions and evidences on record and deleted the addition which in our view is well reasoned. The relevant portion of the Ld. CIT(A)’s findings are as under: 7 “I have carefully considered the appellant's submissions, the observations…

Royal Cushion Vinyl Rpoducts Ltd, Mumbai vs. ACIT 9(3), Mumbai

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

ITA 4653/MUM/2010[2004-05]Status: DisposedITAT Mumbai30 Sept 2016AY 2004-05

Bench: Shri Saktijit Dey() & Shri N.K. Pradhan () Assessment Year: 2004-05

For Appellant: Shri Mayur A ShahFor Respondent: Smt. Amrita Singh
Section 143(3)Section 37(1)Section 43B

…n extracted by the AO at para 6.1 of the assessment order. Even otherwise, a major portion of the interest liability has been disallowed u/s 43B. Reliance was placed by him on the decision of the Hon’ble Supreme Court in the case of S.A. Builders Ltd. vs. CIT 288 ITR 1 (SC). Therefore, it was submitted that the proportionate interest of Rs.20,92,991/- disallowed by the AO is without any basis and the same should be deleted. 5.4 The ld. DR supported the order of the ld. CIT(A) upholding the above disallowance made by the AO. 5.5 After considering the rival submission and perusing the relevant material on record,…

A.C.I.T Cir - 3, Asansol vs. Riten Basak, Burdwan

In the result, Revenue’s appeal stands partly allowed

ITA 1745/KOL/2013[2008-09]Status: DisposedITAT Kolkata28 Sept 2016AY 2008-09

Bench: Shri Waseem Ahmed & Shri S.S.Viswanethra Raviassessment Years:2008-09

Section 10Section 143(3)Section 14ASection 36(1)(iii)

…u/s 36(1)(iii). The point that was to be examined is whether the funds were diverted for purposes which are not commercial expedient. In absence of such a finding no disallowance can be made. The decision reported in SA Builders vs. CIT(Appeal ) & AIR [2007] 288 ITR 1 is relied upon to arrive at in this decision. Decision like JCIT vs. ITC Ltd. [2008] 299 ITR (AT) 341 (Kol (SB) also support the view. 6. Looking through another angle it is to be considered that exemption u/s. 10(2A) in hands of partner is an income taxed in the hands of firm. Therefore the funds diverted is to earn income in hands of firm. The f…

Jayneer Capital Private Ltd, Mumbai vs. Asst CIT Cir 6(1), Mumbai

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

ITA 694/MUM/2014[2008-09]Status: DisposedITAT Mumbai28 Sept 2016AY 2008-09

Bench: Shri D. Karunakara Rao & Shri Sanjay Gargi.T.A. No.694/M/2014 (Assessment Year:2008-2009) I.T.A. No.695/M/2014 (Assessment Year:2009-2010) फनाभ/ Jayneer Capital Private Limited, Acit, Circle 6(1), Continental Building, Mumbai. Vs. 135, Dr. A.B. Road, Worli, Mumbai – 400 018. स्थामी रेखा सं./ Pan : Aaacj1688G (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) अऩीराथी की ओय से / Appellant By : Shri Niraj Seth प्रत्मथी की ओय से/ Respondent By : Shri Alok Johari, Cit

For Appellant: Shri Niraj SethFor Respondent: Shri Alok Johari, CIT
Section 10(34)Section 14ASection 36(1)(iii)

…est free funds to the tune of Rs. 30.54 Crs (rounded off) as on 31.3.2008, whereas the interest free advances given to the above concerns is only Rs. 10.09 Crs. Assessee relied heavily on the judgment of the Hon‟ble Supreme Court in the case of S.A. Builders (288 ITR 1) (SC). However, CIT (A) distinguished the same and mentioned that the facts relating to the S.A. Builders (supra) are different and the said company advanced to the sister concern for making purchases of raw materials. Whereas, in the present case, the undisputed fact is that the said amounts are given as advance in the beginning and it was convert…