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M/S. Jaypee Capital Services Ltd., New ... vs Dcit, New Delhi on 17 January, 2020 cites

Commissioner Of Income Tax (Large Tax ... vs M/S Reliance Industries Ltd on 2 January, 2019

9. Undisputedly, during the year under assessment, assessee company has earned dividend income of Rs.1,36,19,200/- and claimed the same as exempt u/s 10(34) of the Act. Ld. AR for the assessee challenging the impugned order contended that the entire investment in the shares have been made by the assessee company out of its own funds and drew our attention towards balance sheet, available at page 16 of the paper book. Perusal of the balance sheet qua the year under assessment shows that the assessee company is having paid up share capital of Rs.7,64,75,500/- with reserve and surplus of Rs.3,17,17,14,177/- (total Rs.3,24,81,89,677/-). These facts go to prove that as against the total investment of Rs.2,97,33,89,709/-, assessee company was having its own share capital and surplus & reserves to the tune of 7 ITA No.1384/Del./2017 Rs.3,24,81,89,677/-. It is settled principle of law that in case the assessee company is having sufficient own interest free funds, it is to be presumed that the investment is not made out of borrowed funds but out of its own interest free funds. Reliance in this regard is placed on the decision rendered by Hon'ble Supreme Court in case of CIT vs. Reliance Industries Ltd. in Civil Appeal No.10 of 2019 dated 02.01.2019 and decision rendered by Hon'ble High Court of Punjab & Haryana in CIT vs. Max India Ltd. in ITA No.186 of 2013 dated 06.09.2016.
Supreme Court - Daily Orders Cites 3 - Cited by 143 - Full Document

Cit vs Max India Ltd. on 1 November, 2007

9. Undisputedly, during the year under assessment, assessee company has earned dividend income of Rs.1,36,19,200/- and claimed the same as exempt u/s 10(34) of the Act. Ld. AR for the assessee challenging the impugned order contended that the entire investment in the shares have been made by the assessee company out of its own funds and drew our attention towards balance sheet, available at page 16 of the paper book. Perusal of the balance sheet qua the year under assessment shows that the assessee company is having paid up share capital of Rs.7,64,75,500/- with reserve and surplus of Rs.3,17,17,14,177/- (total Rs.3,24,81,89,677/-). These facts go to prove that as against the total investment of Rs.2,97,33,89,709/-, assessee company was having its own share capital and surplus & reserves to the tune of 7 ITA No.1384/Del./2017 Rs.3,24,81,89,677/-. It is settled principle of law that in case the assessee company is having sufficient own interest free funds, it is to be presumed that the investment is not made out of borrowed funds but out of its own interest free funds. Reliance in this regard is placed on the decision rendered by Hon'ble Supreme Court in case of CIT vs. Reliance Industries Ltd. in Civil Appeal No.10 of 2019 dated 02.01.2019 and decision rendered by Hon'ble High Court of Punjab & Haryana in CIT vs. Max India Ltd. in ITA No.186 of 2013 dated 06.09.2016.
Supreme Court of India Cites 5 - Cited by 786 - Full Document

S. A. Builders Ltd. .. Petitioner vs Commissioner Of Income Tax (Appeals) ... on 14 December, 2006

12. It is also contended by the ld. AR for the assessee that advances to the group companies have been given out of its own paid up share capital and reserve & surplus of Rs.3,24,81,89,677/- for commercial expediency to the group companies and relied upon the decision of S.A. Builders Ltd. vs. CIT (2007) 158 taxman 74 (SC). So, in view of the financials brought on record by the assessee company discussed in the preceding para, we are of the considered view that since transactions are pertaining of business of shares/future/option of securities & advances having been given on account of commercial expediency of the group companies, disallowance made by the AO and confirmed by the ld. 9 ITA No.1384/Del./2017 CIT (A) u/s 36(1)(iii) is not sustainable, hence ordered to be deleted. So, grounds no.5, 6, 7 & 8 are determined in favour of the assessee.
Supreme Court of India Cites 12 - Cited by 1104 - M Katju - Full Document
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