30 to CIT v. Indian Molasses Co. (l) Ltd.

101 ITR 221Supreme Court of India1975#3043 most cited

What is 30 to CIT v. Indian Molasses Co. (l) Ltd. authority for?

Expenses incurred are not deductible if they are not dictated by commercial expediency but are inspired by profit hunting and tax avoidance motives.

39

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2012 to 2023.

Also referred to as

CIT v. Indian Molasses Co. (l) Ltd. · 101 ITR 221 · business expediency · commercial expediency · tax avoidance · profit hunting · deduction not allowed · sham transactions · colourable transactions

Issues it is cited on

section 153a proceedings explanation to section 37 section 158bd going concern prohibited by law business expediency section 246 section 30 section 246a section 200 commercial expediency principal commissioner of income-tax

Judgments citing 30 to CIT v. Indian Molasses Co. (l) Ltd.

DCIT, Circle- 21(1), New Delhi vs. Realistic Realitors Pvt. Ltd., New Delhi

In the result, appeal of the Revenue dismissed

ITA 684/DEL/2018[2008-09]Status: DisposedITAT Delhi05 Mar 2021AY 2008-09

Bench: Shri Bhavnesh Saini & Shri N.K. Billaiya

For Appellant: Shri Mayan K. Patwari, CAFor Respondent: Shri Gurmel Singh, Sr. D.R

Section 143(1)Section 145(3)Section 148Section 37

…the above expenditure is an allowable deduction under section 37 of the I.T. Act, 1961 and relied upon Judgments of the Hon’ble Supreme Court in the cases of CIT vs., India Molasses Co. P. Ltd., [1970] 78 ITR 474 (SC); J.K. Cotton Mfrs. Ltd., vs., CIT [1975] 101 ITR 221 (SC) and CIT vs., Panipat Woollen & General Mills Co. Ltd., [1976] 103 ITR 66 (SC). The A.O, 4 ITA.No.1220/Del./2018 M/s. Raghukul Trading Pvt. Ltd., Noida. however, did not accept the contention of assessee in the light of information emanating from the search in the case of Shri Praveen Agarwal for booking the expenditure. The A.O. accordingly…

DCIT, Cir-3(1), Kolkata vs. M/S Saregama India Ltd, Kolkata

ITA 473/KOL/2017[2006-07]Status: DisposedITAT Kolkata29 Jan 2020AY 2006-07

Bench: Shri S.S.Godara & Dr. A.L. Saini

…ompany under the provisions of the Act but this judgment is distinguished in as that it relates to royalty paid and not for M.G. Royalty paid for the acquisition of monopoly right. The Hon'ble Supreme Court in the case of J.K. Cotton Manufactures Ltd. VS. CIT 101 ITR 221 to determine the nature of expenditure, several tests that have been evolved over the years by the Hon'ble Supreme Court as also by the High Court, and they may briefly be formulated as follows: (i) Bringing into existence an asset or advantage of enduring nature would lead to the inference that the expenditure disbursed is of a capital nature. T…

DCIT, Cir-3(1), Kolkata vs. M/S Saregama India Ltd, Kolkata

ITA 472/KOL/2017[2005-06]Status: DisposedITAT Kolkata29 Jan 2020AY 2005-06

Bench: Shri S.S.Godara & Dr. A.L. Saini

…ompany under the provisions of the Act but this judgment is distinguished in as that it relates to royalty paid and not for M.G. Royalty paid for the acquisition of monopoly right. The Hon'ble Supreme Court in the case of J.K. Cotton Manufactures Ltd. VS. CIT 101 ITR 221 to determine the nature of expenditure, several tests that have been evolved over the years by the Hon'ble Supreme Court as also by the High Court, and they may briefly be formulated as follows: (i) Bringing into existence an asset or advantage of enduring nature would lead to the inference that the expenditure disbursed is of a capital nature. T…

DCIT, Cir-3(1), Kolkata vs. M/S Saregama India Ltd, Kolkata

ITA 471/KOL/2017[2004-05]Status: DisposedITAT Kolkata29 Jan 2020AY 2004-05

Bench: Shri S.S.Godara & Dr. A.L. Saini

…ompany under the provisions of the Act but this judgment is distinguished in as that it relates to royalty paid and not for M.G. Royalty paid for the acquisition of monopoly right. The Hon'ble Supreme Court in the case of J.K. Cotton Manufactures Ltd. VS. CIT 101 ITR 221 to determine the nature of expenditure, several tests that have been evolved over the years by the Hon'ble Supreme Court as also by the High Court, and they may briefly be formulated as follows: (i) Bringing into existence an asset or advantage of enduring nature would lead to the inference that the expenditure disbursed is of a capital nature. T…

DCIT, Cir-3(1), Kolkata vs. M/S Saregama India Ltd, Kolkata

ITA 470/KOL/2017[2003-04]Status: DisposedITAT Kolkata29 Jan 2020AY 2003-04

Bench: Shri S.S.Godara & Dr. A.L. Saini

…ompany under the provisions of the Act but this judgment is distinguished in as that it relates to royalty paid and not for M.G. Royalty paid for the acquisition of monopoly right. The Hon'ble Supreme Court in the case of J.K. Cotton Manufactures Ltd. VS. CIT 101 ITR 221 to determine the nature of expenditure, several tests that have been evolved over the years by the Hon'ble Supreme Court as also by the High Court, and they may briefly be formulated as follows: (i) Bringing into existence an asset or advantage of enduring nature would lead to the inference that the expenditure disbursed is of a capital nature. T…

M/S Saregama India Limited, Kolkata vs. DCIT, Cir.-3(1), Kolkata

ITA 312/KOL/2017[2010-11]Status: DisposedITAT Kolkata29 Jan 2020AY 2010-11

Bench: Shri S.S.Godara & Dr. A.L. Saini

…ompany under the provisions of the Act but this judgment is distinguished in as that it relates to royalty paid and not for M.G. Royalty paid for the acquisition of monopoly right. The Hon'ble Supreme Court in the case of J.K. Cotton Manufactures Ltd. VS. CIT 101 ITR 221 to determine the nature of expenditure, several tests that have been evolved over the years by the Hon'ble Supreme Court as also by the High Court, and they may briefly be formulated as follows: (i) Bringing into existence an asset or advantage of enduring nature would lead to the inference that the expenditure disbursed is of a capital nature. T…

M/S Saregama India Limited, Kolkata vs. DCIT, Cir.-3(1), Kolkata

ITA 310/KOL/2017[2004-05]Status: DisposedITAT Kolkata29 Jan 2020AY 2004-05

Bench: Shri S.S.Godara & Dr. A.L. Saini

…ompany under the provisions of the Act but this judgment is distinguished in as that it relates to royalty paid and not for M.G. Royalty paid for the acquisition of monopoly right. The Hon'ble Supreme Court in the case of J.K. Cotton Manufactures Ltd. VS. CIT 101 ITR 221 to determine the nature of expenditure, several tests that have been evolved over the years by the Hon'ble Supreme Court as also by the High Court, and they may briefly be formulated as follows: (i) Bringing into existence an asset or advantage of enduring nature would lead to the inference that the expenditure disbursed is of a capital nature. T…

M/S Saregama India Limited, Kolkata vs. DCIT, Cir.-3(1), Kolkata

ITA 309/KOL/2017[2003-04]Status: DisposedITAT Kolkata29 Jan 2020AY 2003-04

Bench: Shri S.S.Godara & Dr. A.L. Saini

…ompany under the provisions of the Act but this judgment is distinguished in as that it relates to royalty paid and not for M.G. Royalty paid for the acquisition of monopoly right. The Hon'ble Supreme Court in the case of J.K. Cotton Manufactures Ltd. VS. CIT 101 ITR 221 to determine the nature of expenditure, several tests that have been evolved over the years by the Hon'ble Supreme Court as also by the High Court, and they may briefly be formulated as follows: (i) Bringing into existence an asset or advantage of enduring nature would lead to the inference that the expenditure disbursed is of a capital nature. T…

ITO 17(2)(3), Mumbai vs. Morparia & Ranka Construction Co, Mumbai

In the result, cross objection of the assessee and the appeal of the Revenue are allowed for statistical purpose

ITA 2623/MUM/2017[2006-07]Status: DisposedITAT Mumbai28 Aug 2019AY 2006-07

Bench: Shri C.N. Prasad, Hon'Ble & Shri Rajesh Kumar, Hon'Ble

For Appellant: Shri Hiro RaiFor Respondent: Shri D.G. Pansari

…ts remained unproved. (iii) In the absence of pertinent documentary evidences, the genuineness and business expediency of the expenditure has not been established as mandated by the Hon'ble Apex Court in the decisions of CIT vs. Indian Molasses Co. (P.) Ltd., 78 ITR 474 and J.K.Cotton Mfrs. Ltd., 101 ITR 227." 2. "The appellant prays that the order of the A.O. should be restored and order of the Ld. CIT(A) should be set aside." 3. "The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 3. In the cross objection, assessee has challenged the order of the Ld.CIT(A) in n…

Sandeep Marwah vs. Assistant CIT

ITA/1249/2018HC Delhi12 Nov 2018

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI

Section 260ASection 37(1)

…urther (b) must not be; (i) capital expenditure; (ii) personal expense; or (iii) an allowance of the character described in section 30 to 36 and section 80 VV. CIT V. India Molasses Co.(P) Ltd. [1970] 78 ITR 474 (SC)/ J.K .Cotton Mfrs. Ltd. V. CIT (1975) 101 ITR 221 (SC)/ Sasson J. David & co.(P) Ltd. V.CIT (1979) 118 ITR 261 (SC). In the case of CIT v. Shahibag entrepreneurs (P) Ltd. (1995) 215 ITR 810 (Guj), it was held that it cannot be disputed that before an assessee can become entitled to an allowance under Section 37(1), he must satisfy the department of the purpose for which the amount is spen…

Sandeep Marwah vs. Assistant CIT

ITA/1250/2018HC Delhi12 Nov 2018

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI

Section 260ASection 37(1)

…urther (b) must not be; (i) capital expenditure; (ii) personal expense; or (iii) an allowance of the character described in section 30 to 36 and section 80 VV. CIT V. India Molasses Co.(P) Ltd. [1970] 78 ITR 474 (SC)/ J.K .Cotton Mfrs. Ltd. V. CIT (1975) 101 ITR 221 (SC)/ Sasson J. David & co.(P) Ltd. V.CIT (1979) 118 ITR 261 (SC). In the case of CIT v. Shahibag entrepreneurs (P) Ltd. (1995) 215 ITR 810 (Guj), it was held that it cannot be disputed that before an assessee can become entitled to an allowance under Section 37(1), he must satisfy the department of the purpose for which the amount is spen…

Glaxosmithkline Asia (P) Ltd., Gurgaon vs. ACIT, Chandigarh

In the result, appeal of the Assessee is allowed for statistical purposes

ITA 1323/CHANDI/2012[2003-04]Status: DisposedITAT Chandigarh28 Sept 2018AY 2003-04

For Appellant: Sh. Neeraj Jain (C.A), Sh. Abhishek Mukherjee (C.A)For Respondent: Dr. Gulshan Raj

…cular line of business and the stock write off was a cost to get out of unviable business which resulted in enduring benefit to the assessee. The assessing officer placed reliance on the decision of the Apex Court in J.K. Cotton Manufacturers Limited vs. CIT: 101 ITR 221 and Arvind Mills Limited vs. CIT: 197 ITR 422 in this regard. In terms of section 2(14)(i) of the Act, stock-in-trade cannot be regarded as a capital asset. The aforesaid loss on write off of obsolete stock of Aquafresh toothpaste, it is respectfully submitted, is stock-in-trade of the appellant and any loss relating to the same necessarily is i…

M/S Loesche India Pvt. Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, the appeal is allowed

ITA 295/DEL/2016[2010-11]Status: DisposedITAT Delhi13 Aug 2018AY 2010-11

Bench: : Shri Amit Shukla & Shri L.P. Sahuassessment Year: 2010-11

Section 17(2)(iv)Section 37Section 37(1)

…tention to the decisions of Supreme Court in the following cases - CIT v. Indian Molasses Co. (P.) Ltd. [1970] 78 ITR 474 (SC) [for copy of this judgement pl refer pages 56 to 64 of the accompanying paper book - sl no. 8]; J.K. Cotton Mfrs. Ltd. v. CIT [1975] 101 ITR 221 (SC); Sassoon J. David & Co. (P) Ltd. v. CIT [1979] 118 ITR ITR 261 (SC). Section 37(1), generally provides for allowance of the residuary business expenditure. Therefore, business expenditure is allowable u/s 37, the sole condition precedent being the existence of nexus with the purpose of business carried on - Coates of India Ltd. v. CIT [1994]…

M/S. Motherson Sumi Infotech & Designs Ltd., New Delhi vs. DCIT, New Delhi

In the result, appeal of the assessee is allowed

ITA 6331/DEL/2016[2012-13]Status: DisposedITAT Delhi26 Feb 2018AY 2012-13

Bench: Shri Bhavnesh Saini & Shri L.P. Sahu

For Appellant: Shri Anubhav RastogiFor Respondent: Shri Sanjay Kumar Yadav, D.R

Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 92C

…e theory of “Form over substance”. The pages 169 to 172 of the same paper book contain the details :- 1. Swadeshi Cotton Mills Ltd. vs., CIT 63 ITR 57 (SC). 2. Madhavji Dharmashingh Mfg Co. (P) Ltd. vs. CIT 78 ITR 62 (SC). 3. JK Cotton Mfrs Ltd. vs., CIT 101 ITR 221. 4. Mcdowell & Co. Ltd Vs CTO 154 ITR 148 (S). 5. OECD guidelines. 3. The DRP rejected the contentions of the assessee regarding treatment of transactions on account of “outstanding receivables” because of the retrospective amendment of Section 92B(1) of the I.T. Act, 1961 covered all such transactions i.e., “International Transactions”. It…

Noble Consolidated Glazings Limited, Chennai vs. DCIT, Chennai

In the result, the assessee’s appeal is allowed for statistical purposes

ITA 26/CHNY/2017[2012-13]Status: DisposedITAT Chennai27 Jul 2017AY 2012-13

Bench: Shri Sanjay Arora & Shri Duvvuru Rl Reddy

For Appellant: Shri Nagendra Kumar, Dy. CITFor Respondent: 22.06.2017

…this stage and in this context may be made to the decision in Janatha Contract Co. v. CIT [1976] 105 ITR 627 (Ker), wherein the Hon’ble Court, following decisions in CIT v. Indian 10 Noble Consolidated Glazings Ltd. v. Dy.CIT Molasses Co. (P.) Ltd. [1970] 78 ITR 474 (SC) and CIT v. Greaves Cotton & Co. Ltd. [1968] 68 ITR 200 (SC), restored back the matter to the file of the tribunal for factual determination as to accrual or otherwise of the amounts withheld. In sum: 5. The moot question arising in the present case is whether there has been an accrual as income during the year of the sums retained by the ass…

ACIT Cen Cir 11, Mumbai vs. Prakash C. Kanugo, Mumbai

In the result, revenue’s appeal for Asst Year

ITA 5223/MUM/2012[2009-10]Status: DisposedITAT Mumbai02 Sept 2016AY 2009-10

Bench: Shri Shailendra Kumar Yadav (Jm) & Shri Jason P.Boaz (Am) Assessment Year: 2009-10

For Appellant: Shri. Anandi VermaFor Respondent: Dr. K. Shivram & Ms. Neelam Jadhav

Section 132Section 133ASection 143(3)Section 271(1)(c)Section 271A

…reasons, as clarified by the hon’ble court in Janatha Contract Co. v. CIT [1976] 105 ITR 627 (Ker), following the binding decisions by the apex court in CIT v. Greaves Cotton & Co. Ltd. [1968] 68 ITR 200 (SC) and CIT v. Indian Mollasses & Co. (P.) Ltd. [1970] 78 ITR 474 (SC). The authorities on the law in the matter could in fact be multiplied. Then, again, we wonder, rather than reading down the provision, so as to operate to negate the mandatory requirement of the section, defeating the legislative intent, which, as explained by the hon’ble courts as well as the official pronouncements explaining the provision,…

Sahil Study Circle Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee stands allowed

ITA 1434/DEL/2013[2007-08]Status: DisposedITAT Delhi22 Jan 2016AY 2007-08

Bench: Shri G.D. Agrawal & Shri A.T. Varkey

For Appellant: Shri Ajay Wadhwa, AdvocateFor Respondent: Shri B.R.R. Kumar, Senior DR

Section 133ASection 143(3)Section 69A

…ther (b) must not be; (i) capital expenditure; (ii) personal expense; or (iii) an allowance of the character described in sections 30 to 36 and section 80W" A) CIT v. Indian Molasses Co. (P.) Ltd. [1970] 78 ITR 474 (SC) B) J.K. Cotton Mfrs. Ltd. v. CIT [1975] 101 ITR 221 (SC) C) Sassoon J. David & Co. (P.) Ltd. v. CIT [1979] 118 ITR 261 (SC) (ii) As is evident from the ledger of advertisement expenditure (PB 163- 168), the assessee company has incurred advertisement expenditure on advertising the in newspapers and magazines and the same have been incurred: - Wholly and exclusively for the purpose of business, and…

Commissioner of Income Tax Delhi vs. Sunaero Ltd

ITA - 562 / 2008HC Delhi01 Jun 2012

Section 260ASection 4Section 45Section 47

…ficer in the remand report. (v) The respondent assessee is entitled to raise this issue and question before the High Court as one of the facets of the issue or a part of the subject matter of the appeal. (See CIT vs. Indian Molasses Co. (P) Ltd. (1970) 78 ITR 474 (SC), Sundarama and Co. (P) Ltd. vs. CIT (1967) 66 ITR 604 (SC), Raja Sharda Narain Singh vs. CIT (1968) 68 ITR 209 (SC). 2012:DHC:3789-DB ITA 562/2008 Page 20 of 38 (vi) Correspondence of Sunair Hotels Limited with NDMC in the letters dated 12th August, 1993 an…

Commissioner of Income Tax

ITA/562/2008HC Delhi01 Jun 2012

Section 260ASection 4Section 45Section 47

…ficer in the remand report. (v) The respondent assessee is entitled to raise this issue and question before the High Court as one of the facets of the issue or a part of the subject matter of the appeal. (See CIT vs. Indian Molasses Co. (P) Ltd. (1970) 78 ITR 474 (SC), Sundarama and Co. (P) Ltd. vs. CIT (1967) 66 ITR 604 (SC), Raja Sharda Narain Singh vs. CIT (1968) 68 ITR 209 (SC). 2012:DHC:3789-DB ITA 562/2008 Page 20 of 38 (vi) Correspondence of Sunair Hotels Limited with NDMC in the letters dated 12th August, 1993 an…