Assam Bengal Cement Co. Ltd. v. CIT

27 ITR 34Supreme Court of India1955#554 most cited

What is Assam Bengal Cement Co. Ltd. v. CIT authority for?

The Supreme Court established the foundational test for distinguishing between capital and revenue expenditure, holding that the aim and object of the expenditure and whether it brings into existence an asset or an advantage of an enduring nature determines its character, irrespective of the payment method. An advantage lasting five years or more can be considered enduring.

174

judgments rely on this decision, according to BharatTax’s citation analysis of 367,518 Indian tax judgments — from 2008 to 2026.

Also referred to as

Assam Bengal Cement Co. Ltd. v. CIT · 27 ITR 34 · SC · Section 37(1) · Section 10(2)(xv) · capital expenditure vs revenue expenditure · enduring benefit test · aim and object of expenditure · protection fee

Sections most often in play

Section 1961Section 143(3)Section 37(1)Section 37Section 143(2)Section 2(14)Section 254Section 32
Read the full judgment

Issues it is cited on

test of enduring benefitsection 10(2)(xv)relinquishment of rightnon-compete feebusiness transfer agreementsection 2(31)enduring benefitslump salegoing concernsection 51revenue expendituresection 40a(2)(b)

Judgments citing Assam Bengal Cement Co. Ltd. v. CIT

ACIT, Sonepat vs. M/S. Atlas Cycles (Haryana) Ltd., Sonepat

In the result ITA Nos. 2484/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 4049/DEL/2013[2008-09]Status: DisposedITAT Delhi29 Jul 2016AY 2008-09

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

ACIT, Sonepat vs. M/S Atlas Cycles (Haryana) Ltd., Sonepat

In the result ITA Nos. 2484/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 4000/DEL/2013[2010-11]Status: DisposedITAT Delhi29 Jul 2016AY 2010-11

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

ACIT, Sonepat vs. M/S. Atlas Cycles (Haryana) Ltd., Sonepat

In the result ITA Nos. 2484/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 2132/DEL/2012[2009-10]Status: DisposedITAT Delhi29 Jul 2016AY 2009-10

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

Addl. CIT, Sonepat vs. M/S Atlas Cycles Haryana Ltd., Sonepat

In the result ITA Nos. 2484/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 3473/DEL/2011[2008-09]Status: DisposedITAT Delhi29 Jul 2016AY 2008-09

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

ACIT, Sonepat vs. M/S. Atlas Cycles Haryana Ltd., Sonepat

In the result ITA Nos. 2484/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 3472/DEL/2011[2005-06]Status: DisposedITAT Delhi29 Jul 2016AY 2005-06

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

DCIT, Sonepat vs. M/S Atlas Cycles (Haryana) Ltd., Sonepat

In the result ITA Nos. 2484/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 2491/DEL/2011[2004-05]Status: DisposedITAT Delhi29 Jul 2016AY 2004-05

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

DCIT, Sonepat vs. M/S Atlas Cycles (Haryana) Ltd., Sonepat

In the result ITA Nos. 2484/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 2490/DEL/2011[2003-04]Status: DisposedITAT Delhi29 Jul 2016AY 2003-04

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

DCIT, Sonepat vs. M/S Atlas Cycles (Haryana) Ltd., Sonepat

In the result ITA Nos. 2489/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 2489/DEL/2011[2006-07]Status: DisposedITAT Delhi29 Jul 2016AY 2006-07

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

DCIT, Sonepat vs. Shri Atlas Cycles Haryana Ltd., Sonepat

In the result ITA Nos. 2484/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 10/DEL/2011[2007-08]Status: DisposedITAT Delhi29 Jul 2016AY 2007-08

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

ACIT, Sonepat vs. M/S. Atlas Cycles (Haryana) Ltd., Sonepat

In the result ITA Nos. 2484/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 913/DEL/2010[2006-07]Status: DisposedITAT Delhi29 Jul 2016AY 2006-07

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

M/S. Atlas Cycles (Haryana) Ltd., Sonepat vs. ACIT, Haryana

In the result ITA Nos. 2484/Del/2011 and 4049/Del/2013 preferred by the department are dismissed

ITA 784/DEL/2010[2006-07]Status: DisposedITAT Delhi29 Jul 2016AY 2006-07

Bench: Shri G.D. Agrawal, Hon’Ble & Shri Sudhanshu Srivastava

…ticular expenditure incurred by the assessee is of capital or revenue nature is always a complex and intricate issue. Such a question has to be considered and answered in the facts and circumstances of each case. In Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), it was held that if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. If on the other hand it is made not for bringing into existence an asset or advantage but for running the busin…

The Pr. Commissionr of Income Tax-4 vs. Godavari Shilpkala Ltd

The appeal is dismissed

ITA/378/2016HC Delhi25 Jul 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE NAJMI WAZIRI

…Page 2 of 2 expenditure. 4. Learned counsel for the Revenue has relied upon the decisions of the Supreme Court in Assam Bengal Cement Co.Ltd. v. Commissioner of Income Tax, West Bengal (1955) 27 ITR 34 (SC) and Ballimal Naval Kishore v. Commissioner of Income Tax (1997) 90 Taxman 402(SC). 5. The Court finds that the specific findings reached in those cases turned on the facts. As far as the present case is concerned, factually it was concluded that no new asset came into existence. In the circumstances, the decision of the CIT (A), affirm…

Price Waterhouse Coppers Private Limited, Kolkata vs. Addl C.I.T RG - 2, Kolkata

In the result, to sum up, the appeals of the revenue in ITA No

ITA 2033/KOL/2013[2003-04]Status: DisposedITAT Kolkata13 Jul 2016AY 2003-04

Bench: Shri M. Balaganesh, Am & Shri S. S. Viswanethra Ravi, Jm]

For Appellant: Shri K. M. Gupta, ARFor Respondent: Shri A. K. Pandey, JCIT, Sr. DR
Section 143(3)

…f a capital expenditure and hence such expenditure on recruitment of staff is an allowable revenue expenditure u/s 37(1) of the Act. In support of which, the assessee placed reliance on the following decisions :- Assam Bengal Cement Co. Ltd vs CIT reported in 27 ITR 34 (SC) Empire Jute Co. Ltd vs CIT reported in 124 ITR 1 (SC) Hindustan Commercial Bank Ltd in RE reported in 21 ITR 353 (All HC) U.M. Cables Ltd vs ITO in ITA No. 2442/Kol/2007 rendered by Kolkata Tribunal The ld CITA taking into account the aforesaid submissions and by placing reliance on the aforesaid decisions deleted the disallowance made by the…

D.C.I.T, Cir-2, Kolkata vs. M/S Price Water House Coopers Pvt., Kolkata

In the result, to sum up, the appeals of the revenue in ITA No

ITA 1523/KOL/2013[2005-2006]Status: DisposedITAT Kolkata13 Jul 2016AY 2005-2006

Bench: Shri M. Balaganesh, Am & Shri S. S. Viswanethra Ravi, Jm]

For Appellant: Shri K. M. Gupta, ARFor Respondent: Shri A. K. Pandey, JCIT, Sr. DR
Section 143(3)

…f a capital expenditure and hence such expenditure on recruitment of staff is an allowable revenue expenditure u/s 37(1) of the Act. In support of which, the assessee placed reliance on the following decisions :- Assam Bengal Cement Co. Ltd vs CIT reported in 27 ITR 34 (SC) Empire Jute Co. Ltd vs CIT reported in 124 ITR 1 (SC) Hindustan Commercial Bank Ltd in RE reported in 21 ITR 353 (All HC) U.M. Cables Ltd vs ITO in ITA No. 2442/Kol/2007 rendered by Kolkata Tribunal The ld CITA taking into account the aforesaid submissions and by placing reliance on the aforesaid decisions deleted the disallowance made by the…

D.C.I.T, Cir-2, Kolkata vs. M/S Pricewaterhouse Coopers Pvt, Kolkata

In the result, to sum up, the appeals of the revenue in ITA No

ITA 1521/KOL/2013[2003-2004]Status: DisposedITAT Kolkata13 Jul 2016AY 2003-2004

Bench: Shri M. Balaganesh, Am & Shri S. S. Viswanethra Ravi, Jm]

For Appellant: Shri K. M. Gupta, ARFor Respondent: Shri A. K. Pandey, JCIT, Sr. DR
Section 143(3)

…f a capital expenditure and hence such expenditure on recruitment of staff is an allowable revenue expenditure u/s 37(1) of the Act. In support of which, the assessee placed reliance on the following decisions :- Assam Bengal Cement Co. Ltd vs CIT reported in 27 ITR 34 (SC) Empire Jute Co. Ltd vs CIT reported in 124 ITR 1 (SC) Hindustan Commercial Bank Ltd in RE reported in 21 ITR 353 (All HC) U.M. Cables Ltd vs ITO in ITA No. 2442/Kol/2007 rendered by Kolkata Tribunal The ld CITA taking into account the aforesaid submissions and by placing reliance on the aforesaid decisions deleted the disallowance made by the…

I.T.O WD - 4(2), Kolkata vs. M/S Marcopolo Products Pvt Ltd, Kolkata

In the result, the appeal of the Revenue is dismissed and the Cross Objection of the assessee is partly allowed

ITA 1390/KOL/2013[2009-10]Status: DisposedITAT Kolkata06 May 2016AY 2009-10

Bench: Shri P. M. Jagtap, A.M. & Shri S.S.Viswanethra Ravi, J.M.)

For Appellant: Shri Sudipta Guha JCIT, Sr.DRFor Respondent: Shri Manish Tiwari
Section 143(2)

…held in that case that the outlay on the ‘acquisition of the concern’ would be capital while an outlay in ‘carrying on the concern’ is revenue. The Court further referred to the following observations in the case of Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC) : TC 16R.841 : "If the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business it is properly attributable to capital and is of the nature of capital expenditure. If, on the other hand, it is made not for the purpose of bringing into existence any such asset or advantage but f…

D.C.I.T Cir - 4, Kolkata vs. M/S Asian Tea & Exports Ltd, Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 1241/KOL/2013[2009-10]Status: DisposedITAT Kolkata29 Apr 2016AY 2009-10

Bench: Shri P..M.Jagtap, Am & Shri S.S.Viswanethra Ravi, Jm]

For Appellant: Shri Sanjoy Mukherjee, JCIT, Sr.DRFor Respondent: Shri S.D.Verma, Advocate & Sri Sanjeev Kadel, FCA
Section 143(2)Section 143(3)Section 37Section 37(1)

…held in that case that the outlay on the ‘acquisition of the concern’ would be capital while an outlay in ‘carrying on the concern’ is revenue. The Court further referred to the following observations in the case of Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC) : TC 16R.841 : "If the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business it is properly attributable to capital and is of the nature of capital expenditure. If, on the other hand, it is made not for the purpose of bringing into existence any such asset or advantage but f…

M/S. Honda Siel Power Products Ltd., Gautam Budh Nagar vs. DCIT, New Delhi

In the result, both the appeals of the assessee-company are partly allowed for statistical purposes

ITA 551/DEL/2014[2009-10]Status: DisposedITAT Delhi13 Apr 2016AY 2009-10

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

For Appellant: S/Sh. Neeraj Jain, AdvFor Respondent: Sh. Armendra Kumar, CIT/ DR
Section 143(3)Section 144CSection 2Section 92B

…) • Bombay Steam Navigation Co. (1953) (P.) Ltd. v. CIT: 56 ITR 52 (SC) • DevidasVithaldas& Co. v. CIT: 84 ITR 277 (SC) • Chelpark Company Ltd. v. CIT: 191 ITR 249 (Mad.) • K.T.M.T.M. Abdul Kayoom v. CIT: 44 ITR 689 (SC) • Assam Bengal Cement Co. Ltd. v. CIT: 27 ITR 34 (SC) • L.H. Sugar Factory & Oil Mills P. Ltd. v. CIT: 125 ITR 293 (SC) • Dalmia Jain & Co. Ltd. v. CIT: 81 ITR 754 (SC) • M.K. Bros. (P.) Ltd. v. CIT: 86 ITR 38 (SC) • Travancore Sugars & Chemicals Ltd. v. CIT: 62 ITR 566 (SC) • CIT v. B.N. Elias & Co. (P.) Ltd.: 168 ITR 190 (Cal.) • CIT v. Hindustan General Electric Corpn. Ltd.: 81 ITR 243 (Cal.)…

DCIT, New Delhi vs. M/S. Encorp E Services Ltd., New Delhi

In the result, the appeals of the department are dismissed

ITA 4461/DEL/2011[2007-08]Status: DisposedITAT Delhi11 Jan 2016AY 2007-08

Bench: Sh. N. K. Saini, Am & Sh. Kuldip Singh, Jm Ita No. 1799/Del/2011 : Asstt. Year : 2005-06 Dy. Commissioner Of Income Vs M/S Encorp E Services Ltd., Tax, Circle-11(1), M-4, Surya Mansion, Kausalya Park, New Delhi New Delhi-110016 (Appellant) (Respondent) Ita Nos. 4460 & 4461/Del/2011 : Asstt. Years : 2006-07 & 2007-08 Dy. Commissioner Of Income Vs M/S Encorp E Services Ltd., Tax, Circle-11(1), Office No. 202, F-46, Bhagat Singh New Delhi Market, New Delhi-110001 (Appellant) (Respondent) Pan No. Aabce3129L Assessee By : Sh. Anoop Sharma, Adv. Revenue By : Ms. Kesang Y. Shirpa, Sr. Dr Date Of Hearing : 26.10.2015 Date Of Pronouncement : 11.01.2016 Order Per N. K. Saini, Am:

For Appellant: Sh. Anoop Sharma, AdvFor Respondent: Ms. Kesang Y. Shirpa, Sr. DR
Section 143(1)

…was disallowed and added to the income of the assessee. The reliance was placed on the following case laws: " Hylam Ltd. Vs CIT (1973) 87 ITR 310 (AP) " CIT Vs Singareni Collieries Co. Ltd. (1980) 121 ITR 466 (AP) " Assam Bengal Cement Co. Ltd. Vs CIT (1955) 27 ITR 34 (SC) 6. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted as under: “(i) The appellant company in its profit and loss account for the year under reference has claimed Rs.2,06,23,921/- by debiting the same under Advertisement and Brand Building Account. The expenditure were incurred mainly on business promotion, incent…

DCIT, New Delhi vs. M/S Encorp E Service Ltd., New Delhi

In the result, the appeals of the department are dismissed

ITA 1799/DEL/2011[2005-06]Status: DisposedITAT Delhi11 Jan 2016AY 2005-06

Bench: Sh. N. K. Saini, Am & Sh. Kuldip Singh, Jm Ita No. 1799/Del/2011 : Asstt. Year : 2005-06 Dy. Commissioner Of Income Vs M/S Encorp E Services Ltd., Tax, Circle-11(1), M-4, Surya Mansion, Kausalya Park, New Delhi New Delhi-110016 (Appellant) (Respondent) Ita Nos. 4460 & 4461/Del/2011 : Asstt. Years : 2006-07 & 2007-08 Dy. Commissioner Of Income Vs M/S Encorp E Services Ltd., Tax, Circle-11(1), Office No. 202, F-46, Bhagat Singh New Delhi Market, New Delhi-110001 (Appellant) (Respondent) Pan No. Aabce3129L Assessee By : Sh. Anoop Sharma, Adv. Revenue By : Ms. Kesang Y. Shirpa, Sr. Dr Date Of Hearing : 26.10.2015 Date Of Pronouncement : 11.01.2016 Order Per N. K. Saini, Am:

For Appellant: Sh. Anoop Sharma, AdvFor Respondent: Ms. Kesang Y. Shirpa, Sr. DR
Section 143(1)

…was disallowed and added to the income of the assessee. The reliance was placed on the following case laws: " Hylam Ltd. Vs CIT (1973) 87 ITR 310 (AP) " CIT Vs Singareni Collieries Co. Ltd. (1980) 121 ITR 466 (AP) " Assam Bengal Cement Co. Ltd. Vs CIT (1955) 27 ITR 34 (SC) 6. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted as under: “(i) The appellant company in its profit and loss account for the year under reference has claimed Rs.2,06,23,921/- by debiting the same under Advertisement and Brand Building Account. The expenditure were incurred mainly on business promotion, incent…