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1 - 6 of 6 (0.20 seconds)S. A. Builders Ltd. .. Petitioner vs Commissioner Of Income Tax (Appeals) ... on 14 December, 2006
A.Y. 2006-07 & 2007-08
expenditure whether the exempted income is received in a particular year
or not it was concluded as of being of no consequence so long as the
investment has been made in assets from which income is exempted and
the expenditure has been incurred in earning such exempted income in
a particular year. Considering the provisions of S.36(1)(iii) of the Act in
the context of the judgement of the P&H High Court in the case of
Abhishek Industries Ltd. (288 ITR 1); and S.A.Builders Ltd. vs CIT (269
ITR 535) of the Apex Court he was of the view that even if there is a
nexus of borrowed funds that the funds advanced interest free the
measure of commercial expediency has to be necessarily looked into
before making disallowance of interest on borrowed funds.
Dcit vs S.G. Investments And Industries Ltd. on 29 May, 2003
A.Y. 2006-07 & 2007-08
non-exempted income then it is for the assessee to prove that the
expenditure incurred by him was in relation to non-exempted income as
it is the assessee which was claiming deduction. This is so because all
material facts are in his special and exclusive knowledge. Accordingly in
the circumstances it is for the assessee to prove that the expenditure
incurred by the assessee was in relation to non-exempted income relying
upon ITAT Kolkata Bench in the case of DCIT vs. S.G.Investments &
Industries Ltd. (89 ITD 44). He was of the view that the expression "in
relation to" means to bring into association or connection with. This
term is equivalent to "concerning with" or "pertaining to". The term "in
relation to" has broader meaning then the word "for the purpose of
earning income" as used in Sec.57 (iii) of the Act. Thus holding that the
amount of investment of Rs.5,81,58,214/- with M/s Lakhani India Ltd.,
is more than the sum total of source of funds of Rs.4,98,64,453/-. It
was clear that the assessee would not have to pay any interest if there
was no investment with the sister concern. As such interest of
Rs.19,32,077/- was disallowed.
Munjal Sales Corporation vs Commissioner Of Income Tax,Ludhiana & ... on 19 February, 2008
Referring to
the judgement of the Apex Court in the case of Munjal Sales Corporation
vs CIT 298 ITR 298 he was of the view that establishment of nexus of
borrowed funds with the funds advanced interest free or invested in
assets generating income which does not form total income was and
remained the condition precedent to disallowance of interest on
borrowed funds and the question of examining commercial expediency is
a subsequent matter to be decided in terms of the judgement rendered
in the case of S.A.Builders. The CIT(A) was of the view that the A.O. has
not carried out inspection as to in which year and as to what extent the
investment in shares was made vis a vis availability of reserves and
surplus interest free and interest bearing funds and accordingly following
details were culled out by him.
The Commissioner Of Income Tax(Cntl), ... vs M/S Hero Cycles Pvt. Ltd. Ludhiana on 28 August, 1997
A.Y. 2006-07 & 2007-08
shares exceeds profits earned over the years as seen from the Reserves
& Surplus of only Rs.2.49 crores on 31.3.2004 and share capital Rs.9
lakhs as against investment of Rs.5.81 crores. Considering the
arguments of the assessee that it was a commercial matter by virtue of
order of Tribual in ACIT vs. Lakhani Marketing Inc. for A.Ys. 2000-2001
& 2001-2002 in ITA no. 3784/Del/2004 and 3782/Del/2004, wherein
the decision of CIT(A) in deleting addition had been affirmed by ITAT
against which department's appeal was dismissed by the Jurisdictional
High Court and taking into consideration the judgement of the
Jurisdictional High Court in CIT vs. Hero Cycles 323 ITR 518 he held
that the A.O. has nowhere given a finding that the interest expenditure
incurred by assessee was for the purpose of earning of dividend income
only and that the borrowed funds were not used for the purpose of
business but disallowed the interest only on the presumption that the
investment in shares was more than the money borrowed from bank.
Thus relying upon the group concern case the addition made by way of
disallowance was deleted.
Commissioner Of Income-Tax vs Bharat General And Textile Industries ... on 4 April, 1985
7. Ld.A.R. on the other hand relying upon the impugned order
contended that in 2006-07 no dividend has been earned by assessee as
such he would place heavy reliance upon CIT vs. Winsome Textile
Industries Ltd. 319 ITR 204 of P&H which is the jurisdictional High
Court for the assessee situated at Faridabad. Reliance was also placed
upon WNS Global Services P.Ltd.
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