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Commisioner Of Income Tax Delhi-I, New ... vs Bharti Televenture Ltd. Qutab ... on 3 January, 2011
cites
Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., ... on 17 April, 1979
Thus, the ratio of Madhav
Prasad Jantia's case (supra) is that the borrowed fund
advanced to a third party should be for commercial
expediency if it is sought to be allowed under Section
36(1)(iii) of the Act."
Eastern Investments Ltd vs Commissioner Of Income-Tax,West ... on 4 May, 1951
The above test in
Atherton's case (supra) has been approved by this
Court in several decisions e.g. Eastern Investments
Ltd. vs. CIT (1951) 20 ITR 1, CIT vs. Chandulal
Keshavlal & Co. (1960) 38 ITR 601 etc.
In our opinion, the High Court as well as the
Tribunal and other Income Tax authorities should
have approached the question of allowability of
interest on the borrowed funds from the above angle.
In other words, the High Court and other authorities
should have enquired as to whether the interest free
loan was given to the sister company (which is a
subsidiary of the assessee) as a measure of
commercial expediency, and if it was, it should have
been allowed.
The Commissioner Of Income-Tax,Bombay vs Chandulal Keshavlal & Co., Petlad on 17 February, 1960
The above test in
Atherton's case (supra) has been approved by this
Court in several decisions e.g. Eastern Investments
Ltd. vs. CIT (1951) 20 ITR 1, CIT vs. Chandulal
Keshavlal & Co. (1960) 38 ITR 601 etc.
In our opinion, the High Court as well as the
Tribunal and other Income Tax authorities should
have approached the question of allowability of
interest on the borrowed funds from the above angle.
In other words, the High Court and other authorities
should have enquired as to whether the interest free
loan was given to the sister company (which is a
subsidiary of the assessee) as a measure of
commercial expediency, and if it was, it should have
been allowed.
Phaltan Sugar Works Ltd. vs Commissioner Of Income-Tax on 25 March, 1949
The law laid down by the Bombay High Court in Phaltan
Sugar Works Ltd. v. CIT (1995) 215 ITR 582 was over-
ruled whereas that of Delhi High Court in CIT v. Dalmia
Cement (B.) Ltd. (2002) 254 ITR 377 was approved. It
was further held that it all depends on the facts and
circumstance of the case as to whether the director
s of the sister concern utilized the amount advanced to it by
the assessee for their personal benefit, which obviously
could not be said to be an advance as a measure of
commercial expediency.
Commissioner Of Income-Tax vs Dalmia Cement (B.) Ltd. on 4 September, 2001
The law laid down by the Bombay High Court in Phaltan
Sugar Works Ltd. v. CIT (1995) 215 ITR 582 was over-
ruled whereas that of Delhi High Court in CIT v. Dalmia
Cement (B.) Ltd. (2002) 254 ITR 377 was approved. It
was further held that it all depends on the facts and
circumstance of the case as to whether the director
s of the sister concern utilized the amount advanced to it by
the assessee for their personal benefit, which obviously
could not be said to be an advance as a measure of
commercial expediency.
Section 28 in The Income Tax Act, 1961 [Entire Act]
Indian Metals And Ferro Alloys Ltd. vs Commissioner Of Income-Tax And Anr. on 22 March, 1993
7. Making same submissions before us as made before the
ITAT, learned counsel for the revenue relied upon the
judgment in „Indian Metals & Ferro Alloys Ltd. Vs.
Commissioner of Income Tax‟, (1992) 193 ITR 0344
and also submitted that where the assessee sought to
deduct certain items from business profits, the onus of
proving the same fell on him. She submitted that Section
36(1)(iii) relates to the amount of interest paid on capital
borrowed for the purpose of business, profession or
vocation and not for advancing interest-free amounts from
the borrowed funds to its subsidiaries. Since admittedly, the
interest-free advances had been given by the assessee to
its subsidiaries, it was upon the assessee to show that the
amounts so advanced were from its own funds.
Section 260A in The Income Tax Act, 1961 [Entire Act]
S. A. Builders Ltd. .. Petitioner vs Commissioner Of Income Tax (Appeals) ... on 14 December, 2006
In the case of S.A. Builders (supra) the Hon‟ble Supreme
Court was seized of the similar matter. In that case, it was
held as under: