(a) CIT v. Shahibag Entrepreneurs (P) Ltd.

215 ITR 810High Court1995#8871 most cited

What is (a) CIT v. Shahibag Entrepreneurs (P) Ltd. authority for?

Expenditure is deductible as wholly and exclusively for the purpose of trade or business if it is incurred as incidental to trade to keep the business going and profitable, not in any other capacity than as a trader. The assessee must satisfy the department regarding the purpose of the expenditure to be eligible for an allowance under Section 37(1).

12

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2018 to 2025.

Also referred to as

CIT v. Shahibag Entrepreneurs (P) Ltd. · Section 37(1) · expenditure for business purpose · wholly and exclusively for business · incidental to trade · keeping trade going · making trade pay · trader capacity

Sections most often in play

Section 13Section 132Section 142(1)Section 143(1)(a)Section 143(2)Section 143(3)Section 144Section 145

Judgments citing (a) CIT v. Shahibag Entrepreneurs (P) Ltd.

M/S Kanak Vrindavan Resorts Limited, Jaipur vs. Income Tax Officer, Ward 6(2), Jaipur

In the result, the appeal of the assessee is allowed

ITA 543/JPR/2025[2016-17]Status: DisposedITAT Jaipur02 Sept 2025AY 2016-17

Bench: SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member), SHRI NARINDER KUMAR (Judicial Member)

For Appellant: Sh. Tarun Mittal, CAFor Respondent: Sh. Gautam Singh Choudhary, Addl. CIT
Section 143(1)(a)Section 143(2)Section 143(3)Section 145Section 37

…has been maintained by the Appellant and produced during the appellate proceedings to establish the fact that the vehicles have been used wholly and exclusively for the purposes of business. 5.1.13 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 spend. ITAT Cuttack in the case of Sunrise Jewellers, Rayagada vs Ito, Rayagada Ward, Rayagada on 12 March, 2021 ITA No. 91/CTK/2018 wherein the Hon'bl…

Deputy Commissioner of Income Tax, Cir-4(1), Kolkata vs. Sublime Agro Limited, Kolkata

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

ITA 1358/KOL/2023[2012-13]Status: DisposedITAT Kolkata10 Feb 2025AY 2012-13

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 143(2)Section 14ASection 80I

…he ld. Counsel has placed reliance on the decision of Hon’ble Supreme Court in the case of CIT vs. Delhi Safe Deposit Co. Ltd. [1982] 133 ITR 756 (SC) and the decision of Hon’ble Gujrat High Court in the case of CIT vs. Shahibag Entrepreneurs Pvt. Ltd. [1995] 215 ITR 810 (Guj). The Hon’ble Apex Court has held thus: “the true test of an expenditure laid out wholly and exclusively for the purposes of trade or business is that it is incurred by the assessee as incidental to his trade for the purpose of keeping the trade going and of making it pay and not in any other capacity than a trader. In CIT, Kerala vs. Malay…

M/S Sumeru Enterproses, Jaipur vs. Income Tax Officer, Ward-6-4, Jaipur

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

ITA 888/JPR/2019[2014-15]Status: DisposedITAT Jaipur20 Jan 2021AY 2014-15
For Appellant: Shri Manish Agrarwal (C.A.)For Respondent: Shri B.K. Gupta (CIT) a
Section 143(3)Section 36(1)(vii)Section 37(1)

…the profits of the business but they must also be for the purpose of earning the profits of the business. They cannot be deducted if they fall on the assessee in some character other than that of a trader." (c) CIT vs. Shahibag Entrepreneurs (P) Ltd. ( 1995) 215 ITR 810 Guj.)- Purpose must be to keep the trade going - The true test of an expenditure laid out wholly and exclusively fo the purposes of trade or business is that it is incurred by the assessee as incidental to his trade for the purpose of keeping the trade going and of making it pay and not in any other capacity that of a trader. Deduction is limited…

M/S Sumeru Enterproses, Jaipur vs. Income Tax Officer, Ward-6-4, Jaipur

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

ITA 887/JPR/2019[2013-14]Status: DisposedITAT Jaipur20 Jan 2021AY 2013-14
For Appellant: Shri Manish Agrarwal (C.A.)For Respondent: Shri B.K. Gupta (CIT) a
Section 143(3)Section 36(1)(vii)Section 37(1)

…the profits of the business but they must also be for the purpose of earning the profits of the business. They cannot be deducted if they fall on the assessee in some character other than that of a trader." (c) CIT vs. Shahibag Entrepreneurs (P) Ltd. ( 1995) 215 ITR 810 Guj.)- Purpose must be to keep the trade going - The true test of an expenditure laid out wholly and exclusively fo the purposes of trade or business is that it is incurred by the assessee as incidental to his trade for the purpose of keeping the trade going and of making it pay and not in any other capacity that of a trader. Deduction is limited…

M/S Sumeru Enterproses, Jaipur vs. Income Tax Officer, Ward-6-4, Jaipur

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

ITA 886/JPR/2019[2012-13]Status: DisposedITAT Jaipur20 Jan 2021AY 2012-13
For Appellant: Shri Manish Agrarwal (C.A.)For Respondent: Shri B.K. Gupta (CIT) a
Section 143(3)Section 36(1)(vii)Section 37(1)

…the profits of the business but they must also be for the purpose of earning the profits of the business. They cannot be deducted if they fall on the assessee in some character other than that of a trader." (c) CIT vs. Shahibag Entrepreneurs (P) Ltd. ( 1995) 215 ITR 810 Guj.)- Purpose must be to keep the trade going - The true test of an expenditure laid out wholly and exclusively fo the purposes of trade or business is that it is incurred by the assessee as incidental to his trade for the purpose of keeping the trade going and of making it pay and not in any other capacity that of a trader. Deduction is limited…

M/S. Kalyan Awas Vikas Pvt. Ltd, D-25, Lal Bahadur Nagar, Jawahar Lal Nehru Marg, Jaipur vs. ACIT, Central Circle-1, Jaipur

In the result, all these three appeals of the assessee are allowed

ITA 329/JPR/2019[2014-15]Status: DisposedITAT Jaipur11 Sept 2020AY 2014-15
For Appellant: Shri S.L. Poddar, AdvocateFor Respondent: Shri B.K.. Gupta , CIT DR
Section 143(3)Section 153A

…d to both the concerns was under business agreements, therefore there is no occasion for making any disallowance of interest. For this purpose, reliance may be placed on the following judicial pronouncements: (a) CIT Vs. Shahibag Entrepreneurs (P) Ltd. (1995) 215 ITR 810 (Guj) Purpose must be to keep the trade going — The true test of an expenditure laid out wholly and exclusively for the purposes of trade or business is that it is incurred by the assessee as 8 ITA 327/JP/2019 & 2 Ors M/s Kalya Awas Vikas P Ltd. Vs ACIT incidental to his trade for the purpose of keeping the trade going and of making it pay and n…

M/S. Kalyan Awas Vikas Pvt. Ltd. D-25, Lal Bahadur Nagar, Jawahar Lal Nehru Marg, Jaipur vs. Assistant Commissioner of Income Tax, Central Circle-1, Jaipur

In the result, all these three appeals of the assessee are allowed

ITA 328/JPR/2019[2013-14]Status: DisposedITAT Jaipur11 Sept 2020AY 2013-14
For Appellant: Shri S.L. Poddar, AdvocateFor Respondent: Shri B.K.. Gupta , CIT DR
Section 143(3)Section 153A

…d to both the concerns was under business agreements, therefore there is no occasion for making any disallowance of interest. For this purpose, reliance may be placed on the following judicial pronouncements: (a) CIT Vs. Shahibag Entrepreneurs (P) Ltd. (1995) 215 ITR 810 (Guj) Purpose must be to keep the trade going — The true test of an expenditure laid out wholly and exclusively for the purposes of trade or business is that it is incurred by the assessee as 8 ITA 327/JP/2019 & 2 Ors M/s Kalya Awas Vikas P Ltd. Vs ACIT incidental to his trade for the purpose of keeping the trade going and of making it pay and n…

M/S. Kalyan Awas Vikas Pvt. Ltd., Jaipur vs. Assistant Commissioner of Income Tax, Central Circle-1, Jaipur

In the result, all these three appeals of the assessee are allowed

ITA 327/JPR/2019[2012-13]Status: DisposedITAT Jaipur11 Sept 2020AY 2012-13
For Appellant: Shri S.L. Poddar, AdvocateFor Respondent: Shri B.K.. Gupta , CIT DR
Section 143(3)Section 153A

…d to both the concerns was under business agreements, therefore there is no occasion for making any disallowance of interest. For this purpose, reliance may be placed on the following judicial pronouncements: (a) CIT Vs. Shahibag Entrepreneurs (P) Ltd. (1995) 215 ITR 810 (Guj) Purpose must be to keep the trade going — The true test of an expenditure laid out wholly and exclusively for the purposes of trade or business is that it is incurred by the assessee as 8 ITA 327/JP/2019 & 2 Ors M/s Kalya Awas Vikas P Ltd. Vs ACIT incidental to his trade for the purpose of keeping the trade going and of making it pay and n…

The Boston Consulting Group (I) P.Ltd, Mumbai vs. Asst CIT 3(1), Mumbai

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

ITA 7600/MUM/2012[2008-09]Status: DisposedITAT Mumbai31 Jul 2020AY 2008-09

Bench: Shri Saktijit Dey () & Shri N.K. Pradhan () Assessment Year: 2008-09

For Appellant: Mr. Jehangir D. Mistri/Aditya Kastiya, ARFor Respondent: Mr. Michael Jerald, DR
Section 143(3)

…es. Observing that the assessee was not able to bring out adequate evidence to justify its claim of business expediency, the AO made a disallowance of the above amount by relying on the decision of the Hon’ble Gujarat High Court in Shahibag Entrepreneurs Ltd. 215 ITR 810. 12. The Ld. counsel submits that in the given case the spouses have accompanied only at the request of the BCG Holdco, organizing the meet and fringe benefit tax has been paid on these expenses. It is stated that the employees were invited along with their spouses to the meet to ensure The Boston Consulting Group. 13 sufficient networking and b…

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)

…nd 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 spend. In ITA Nos.1249/18 & 1250/18 Page 5 of 8 view of this, the expenses claimed by assessee under the head business…

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)

…nd 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 spend. In ITA Nos.1249/18 & 1250/18 Page 5 of 8 view of this, the expenses claimed by assessee under the head business…

Shreno Limited, Baroda vs. The ACIT, Circle-4, Now Circle-2(1)(1), Baroda

In the result, appeal of the assessee is allowed

ITA 251/AHD/2016[2011-12]Status: DisposedITAT Ahmedabad25 May 2018AY 2011-12

Bench: Tribunal Against The Order Of Learned Cit(A)-2, Vadodara, Dated 19.11.2015 Passed For A.Y. 2011-12. 2. The Grounds Of Appeal Taken By The Assessee Are Not In Consonance With Rule 8 Of Itat Rules, They Are Descriptive & Argumentative In Nature. In Brief, In The First Fold Of Grievance, Assessee Pleaded That The Learned Cit(A) Has Erred In Confirming The Disallowance Required To Be Made U/S. 14A Of The Income Tax Act, 1962 Read With Rule 8D Of The Income Tax Rules. Learned Counsel For The

Section 10(34)Section 143(2)Section 14A

…business activity during the course of visit" but "considering the submissions made, the entire visit cannot be termed as personal". He also noted that as per decisions of Hon'ble jurisdictional High Court in the case of CIT Vs Shahibag Entrepreneurs [(1995) 215 ITR 810 (Guj)], a visit which is wholly personal and gratuitous can be disallowed. Based on the decision of this Tribunal in the case of Parkar Securities Ltd VS DCIT [(2006) 8 SOT 257 (Ahd)], which was on its own facts, disallowed 75% of the expenses and allowed the deduction for 25% of the expenses. The assessee is aggrieved and is in appeal before us.…