AVM Ltd. v. CIT

146 ITR 355High Court1984#5278 most cited

What is AVM Ltd. v. CIT authority for?

A deposit received in connection with a business is not necessarily a trading receipt if it cannot be dealt with by the assessee as part of its trade.

22

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2011 to 2025.

Also referred to as

AVM Ltd v CIT · 146 ITR 355 · security deposits · exhibitors · cinematograph films · trading receipts · business connection

Sections most often in play

Section 41(1)Section 40(a)(ia)Section 133ASection 142(2A)Section 250Section 28(iv)Section 36(1)(iii)Section 43(5)

Issues it is cited on

section 256(2)waiver of loansection 256section 73substance over formspeculation losssection 28(iv)resulting companysection 43(5)speculative transactiondemergersection 142(2a)

Judgments citing AVM Ltd. v. CIT

N.K. INDUSTRIES LTD.,AHMEDABAD vs. THE DY.CIT, CIRCLE-3(1)(1), AHMEDABAD

In the result, the appeal of the assessee on this ground is allowed

ITA 448/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad25 Apr 2025AY 2013-14

Bench: Dr. B.R.R. Kumarms. Suchitra Kamble

For Appellant: NK Industries Ltd (Cross Appeals)
Section 250

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE PRESIDENT MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.TA. Nos.442 & 443/Ahd/2023 (Assessment Year: 2010-11 & 2013-14) Dy. Commissioner of Vs. M/s. N.K. Industries Ltd., Income-tax, 7th Floor, Popular House, Ashram Circle3(1)(1), Road, Ahmedabad-380015 Ahmedabad [PAN : AAACN 9376 P] I.TA. Nos.447 & 448/Ahd/2023 (Assessment Year: 2010-11 & 2013-14) M/s. N.K. Industries Ltd., Vs. M/s. N.K. Industries Ltd., 7th Floor, Popular House, Ashram 7th Floor, Popular House, Ashram Road, Ahmedabad-380015 Road, Ahmedabad-380015 [PAN : AAACN 9…

N.K. INDUSTRIES LTD.,AHMEDABAD vs. THE DY.CIT, CIRCLE-3(1)(1), AHMEDABAD

In the result, the appeal of the assessee on this ground is allowed

ITA 447/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad25 Apr 2025AY 2010-11

Bench: Dr. B.R.R. Kumarms. Suchitra Kamble

For Appellant: NK Industries Ltd (Cross Appeals)
Section 250

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE PRESIDENT MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.TA. Nos.442 & 443/Ahd/2023 (Assessment Year: 2010-11 & 2013-14) Dy. Commissioner of Vs. M/s. N.K. Industries Ltd., Income-tax, 7th Floor, Popular House, Ashram Circle3(1)(1), Road, Ahmedabad-380015 Ahmedabad [PAN : AAACN 9376 P] I.TA. Nos.447 & 448/Ahd/2023 (Assessment Year: 2010-11 & 2013-14) M/s. N.K. Industries Ltd., Vs. M/s. N.K. Industries Ltd., 7th Floor, Popular House, Ashram 7th Floor, Popular House, Ashram Road, Ahmedabad-380015 Road, Ahmedabad-380015 [PAN : AAACN 9…

THE DY.CIT, CIRCLE-3(1)(1)., AHMEDABAD vs. N.K. INDUSTRIES LTD., AHMEDABAD

In the result, the appeal of the assessee on this ground is allowed

ITA 443/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad25 Apr 2025AY 2013-14

Bench: Dr. B.R.R. Kumarms. Suchitra Kamble

For Appellant: NK Industries Ltd (Cross Appeals)
Section 250

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE PRESIDENT MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.TA. Nos.442 & 443/Ahd/2023 (Assessment Year: 2010-11 & 2013-14) Dy. Commissioner of Vs. M/s. N.K. Industries Ltd., Income-tax, 7th Floor, Popular House, Ashram Circle3(1)(1), Road, Ahmedabad-380015 Ahmedabad [PAN : AAACN 9376 P] I.TA. Nos.447 & 448/Ahd/2023 (Assessment Year: 2010-11 & 2013-14) M/s. N.K. Industries Ltd., Vs. M/s. N.K. Industries Ltd., 7th Floor, Popular House, Ashram 7th Floor, Popular House, Ashram Road, Ahmedabad-380015 Road, Ahmedabad-380015 [PAN : AAACN 9…

THE DY.CIT, CIRCLE-3(1)(1)., AHMEDABAD vs. N.K. INDUSTRIES LTD., AHMEDABAD

In the result, the appeal of the assessee on this ground is allowed

ITA 442/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad25 Apr 2025AY 2010-11

Bench: Dr. B.R.R. Kumarms. Suchitra Kamble

For Appellant: NK Industries Ltd (Cross Appeals)
Section 250

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE PRESIDENT MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I.TA. Nos.442 & 443/Ahd/2023 (Assessment Year: 2010-11 & 2013-14) Dy. Commissioner of Vs. M/s. N.K. Industries Ltd., Income-tax, 7th Floor, Popular House, Ashram Circle3(1)(1), Road, Ahmedabad-380015 Ahmedabad [PAN : AAACN 9376 P] I.TA. Nos.447 & 448/Ahd/2023 (Assessment Year: 2010-11 & 2013-14) M/s. N.K. Industries Ltd., Vs. M/s. N.K. Industries Ltd., 7th Floor, Popular House, Ashram 7th Floor, Popular House, Ashram Road, Ahmedabad-380015 Road, Ahmedabad-380015 [PAN : AAACN 9…

DCIT, CHENNAI vs. COOPER STANDARD AUTOMOTIVE INDIA P LTD., CHENGALPUT

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

ITA 794/CHNY/2016[2005-06]Status: DisposedITAT Chennai10 Aug 2022AY 2005-06

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. No.794/Chny/2016 िनधा"रण वष"/Assessment Year: 2005-06 The Deputy Commissioner Of Vs. M/S. Cooper Standard Automotive Income Tax, India P. Ltd., Plot No. 3-A, Ford Corporate Circle 1(2), Supplier Park, Kilkaranai Village, Chennai 600 034. Melrosapuram Post Via Singaperumal Koil, Chengalpet 603 204. [Pan:Aabcc3665P] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri Varuvooru Sreedhar, Addl. Cit ""थ" की ओर से/Respondent By : Shri R. Meenakshisundaram, Advocate सुनवाई की तारीख/ Date Of Hearing : 08.06.2022 घोषणा की तारीख /Date Of Pronouncement : 10.08.2022 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Revenue Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 1, Chennai, Dated 05.01.2016 Relevant To The Assessment Year 2005-06. The Only Effective Ground Raised In The Appeal Of The Revenue Is As To Whether The Waiver Of Loan Amount Taken For Business Purposes Is Assessable As Business Income Under Section 28(Iv) R.W.S. 41(1) Of The Income Tax Act, 1961 [“Act” In Short] Or Not.

For Appellant: Shri Varuvooru Sreedhar, Addl. CITFor Respondent: Shri R. Meenakshisundaram, Advocate
Section 143(1)Section 147Section 148Section 28

…in fiduciary capacity. In Pioneer Consolidated 5 I.T.A. No. 794/Chny/16 Company of India Ltd v. CIT 104 ITR 686 the unclaimed surplus of customers was treated as income in the hands of the assessee and were shown as such by it. In the case of CIT v AVM Ltd 146 ITR 355 the assessee a distributor of films took security deposits from exhibitors which were adjusted wholly or partly against dues. The unadjusted deposits which were forfeited were treated as chargeable receipts of the assessee from trade. In CIT v. Batliboi & Company P Ltd 149 ITR 604 a dealer in machinery was accepting deposits from intending purcha…

ACIT, CIRCLE - 16 (1), MUMBAI vs. BBC WORLDWIDE MEDIA PVT. LTD., MUMBAI

In the result, both the appeals filed by the revenue are dismissed

ITA 158/MUM/2019[2013-14]Status: DisposedITAT Mumbai06 Jan 2022AY 2013-14

Bench: Shri Shamim Yahya & Shri Pavan Kumar Gadale & Dcit -16(1), Vs. M/S. Bbc World Wide Room No. 439, 4Th Media Pvt Ltd., Floor, Aayakar Bhavan, 401, 4Th Floor, Mk Road, Mumbai – Construction House A, 400 020. Off Linking Road, 24Th Road, Khar (West), Mumbai – 400052 Pan/Gir No. : Aadcb2307F Appellant .. Respondent

For Appellant: Shri.C T Mathew. DRFor Respondent: Shri.Siddhesh Chougle. AR
Section 143(1)Section 143(2)Section 143(3)Section 28Section 41(1)Section 92C

…epresent a trading liability owed by the assessee to M/s Janki Dass Banarsi Dass, nor had this amount of liability been allowed as a deduction in earlier assessments." (Emphasis supplied) The Hon'ble Madras High Court in the case of CIT v. A.V.M. Ltd.: (1984) 146 ITR 355 has held that every deposit money does not constitute trading receipt. It further held that, although such a receipt may be in connection with business, it could not be dealt with by the assessee as a receipt of its trade. The relevant extract of the judgement is produced far your kind reference: ITA No. 158 & 2770/Mum/2019 M/s BBC World Wide Me…

THE DCIT, CIRCLE-4,, BARODA vs. M/S. YUVRAJ INDUSTRIES LTD.,, BARODA

In the result, appeal of the Revenue is allowed

ITA 2751/AHD/2011[2007-08]Status: DisposedITAT Ahmedabad13 Dec 2021AY 2007-08

Bench: Shri Rajpal Yadav, Vice- & Shri Pradipkumar Kedia

For Appellant: NoneFor Respondent: Shri Vijaykumar Jaiswal, CIT-
Section 41Section 41(1)

…आयकर अपील"य अ"धकरण, अहमदाबाद "यायपीठ, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD [Through Virtual Court] BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI PRADIPKUMAR KEDIA, ACCOUNTANT MEMBER ITA.No.2751/Ahd/2011 "नधा"रण वष"/Asstt.Year : 2007-08 DCIT, Cir.4 M/s.Yuvraj Industries Ltd. Vs. Baroda. Kamadhenu Bunglow 36, Parichay Park Society Nr.JP Road Police Station Vadodara 390 007 PAN : AAACY 0665 Q अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee by : None Revenue by : Shri Vijaykumar Jaiswal, CIT- DR सुनवाई क" तार"ख/Date of Hearing : 25/10/2021 घोषणा क" तार"ख /Date of Pronouncem…

DCIT, CHENNAI vs. SICAL LOGISTICS LTD., CHENNAI

ITA 1697/CHNY/2014[2010-11]Status: DisposedITAT Chennai18 Aug 2017AY 2010-11

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri Milind Madhukar, JCIT &For Respondent: Shri S. Sridhar, Advocate
Section 10Section 14A

…cannot be treated as a trading receipt; therefore, the amount referred to the loans obtained by the assessee towards the purchase of its capital assets would not constitute a trading receipt and the same view has been held in the case of AVM Ltd. vs. CIT (146 ITR 355). According to the CIT(Appeals), the contention of the AO regarding the application of sec.28(iv) of the Act is also not tenable, as the section can be applicable only to the cases, where the benefit or perquisite are received in kind. This section does not apply to the benefits in cash or money and it applies only to a transaction arising from…

DCIT, CHENNAI vs. SICAL LOGISTICS LTD., CHENNAI

ITA 1696/CHNY/2014[2009-10]Status: DisposedITAT Chennai18 Aug 2017AY 2009-10

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri Milind Madhukar, JCIT &For Respondent: Shri S. Sridhar, Advocate
Section 10Section 14A

…cannot be treated as a trading receipt; therefore, the amount referred to the loans obtained by the assessee towards the purchase of its capital assets would not constitute a trading receipt and the same view has been held in the case of AVM Ltd. vs. CIT (146 ITR 355). According to the CIT(Appeals), the contention of the AO regarding the application of sec.28(iv) of the Act is also not tenable, as the section can be applicable only to the cases, where the benefit or perquisite are received in kind. This section does not apply to the benefits in cash or money and it applies only to a transaction arising from…

DCIT, CHENNAI vs. SICAL LOGISTICS LTD., CHENNAI

ITA 1695/CHNY/2014[2008-09]Status: DisposedITAT Chennai18 Aug 2017AY 2008-09

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri Milind Madhukar, JCIT &For Respondent: Shri S. Sridhar, Advocate
Section 10Section 14A

…cannot be treated as a trading receipt; therefore, the amount referred to the loans obtained by the assessee towards the purchase of its capital assets would not constitute a trading receipt and the same view has been held in the case of AVM Ltd. vs. CIT (146 ITR 355). According to the CIT(Appeals), the contention of the AO regarding the application of sec.28(iv) of the Act is also not tenable, as the section can be applicable only to the cases, where the benefit or perquisite are received in kind. This section does not apply to the benefits in cash or money and it applies only to a transaction arising from…

ITO 1(3)(2), MUMBAI vs. SAURABH INDUSTRIES LTD, MUMBAI

In the result the appeal is dismissed

ITA 460/MUM/2015[2006-07]Status: DisposedITAT Mumbai12 May 2017AY 2006-07

Bench: Shri Joginder Singh () & Shri N.K. Pradhan () Assessment Year: 2006-07

For Appellant: Shri K.K. Lalkaka, ARFor Respondent: Shri Vishwas Mundhe, DR
Section 143(3)Section 28Section 41(1)

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) Assessment Year: 2006-07 ITO 1(3)(2) Vs. M/s. Sourabh Industries Ltd. 5th Floor, R. No. 541 Empire House, Gr. Floor, A.K. Naik Aayakar Bhaven, Marg, Fort Mumbai - 400020 Mumbai – 400001 PAN No. AAFCS9949G (Appellant) (Respondent) Revenue by : Shri Vishwas Mundhe, DR Assessee by: Shri K.K. Lalkaka, AR Date of Hearing : 16/02/2017 Date of pronouncement: 12/05/2017 ORDER PER N.K. PRADHAN, AM This is an appeal filed by the revenue. The relevant assessment year is…

THE COMMISSIONER OF INCOME TAX II vs. MAHAVIR IRRIGATION P.LTD.

Appeal is dismissed

ITA - 1266 / 2009HC Delhi03 Aug 2011
Section 143Section 251(2)Section 271

…y the assessee even if he had refused to render any service. We are of the view that this is reading too much into the words used by the authorities below. Reliance has also been placed on Commissioner of Income-Tax, Tamil Nadu-I v. A.V.M. Ltd., [1984] 146 ITR 355, which is a decision of the Division Bench of the Madras High Court. The facts there were totally different. The assessee was carrying on business as a distributor of cinematograph films and had taken security deposits from exhibitors which was to be adjusted against receipts by way of ticket sales. This is not the case where. For the s…

THE COMMISSIONER OF INCOME TAX-II vs. MAHAVIR IRRIGATION PVT. LTD

Appeal is dismissed

ITA/1266/2009HC Delhi03 Aug 2011
Section 143Section 251(2)Section 271

…y the assessee even if he had refused to render any service. We are of the view that this is reading too much into the words used by the authorities below. Reliance has also been placed on Commissioner of Income-Tax, Tamil Nadu-I v. A.V.M. Ltd., [1984] 146 ITR 355, which is a decision of the Division Bench of the Madras High Court. The facts there were totally different. The assessee was carrying on business as a distributor of cinematograph films and had taken security deposits from exhibitors which was to be adjusted against receipts by way of ticket sales. This is not the case where. For the s…

THE MOTOR & GENERAL FINANCE LT vs. COMMISSIONER OF INCOME TAX VI

ITA/123/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ali Swgar Warks (P) I-td, | 236 ITR 5181 related to statutory liabilities. . Further, in the following cases, the amounts transferred to the profit and loss account were held to be chargeable receipts of the assessee from trade:- (a) (b) (c) (d) CIT Vs, AVM , 146 ITR 355. Punjab Steel Scrap Merchants Ass. Vs. ClT, 43 ITR 164. CIT Vs. Batlibol, 149 ITR 664. Punjab Distilling lndustries Vs. ClT, 35 ITR 519. L4. Ms. Chopra, thus concluded her arguments by submitting that since the amount collected by the assessee remained unclaimed, ITA 458 of L9B4 & other connected matters Page 11 of 24 -- and was never given bac…

COMMISSIONER OF INCOME TAX DEL vs. THE MOTOR & GENERAL FINANCE LT

ITA/231/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ali Swgar Warks (P) I-td, | 236 ITR 5181 related to statutory liabilities. . Further, in the following cases, the amounts transferred to the profit and loss account were held to be chargeable receipts of the assessee from trade:- (a) (b) (c) (d) CIT Vs, AVM , 146 ITR 355. Punjab Steel Scrap Merchants Ass. Vs. ClT, 43 ITR 164. CIT Vs. Batlibol, 149 ITR 664. Punjab Distilling lndustries Vs. ClT, 35 ITR 519. L4. Ms. Chopra, thus concluded her arguments by submitting that since the amount collected by the assessee remained unclaimed, ITA 458 of L9B4 & other connected matters Page 11 of 24 -- and was never given bac…

THE MOTOR & GENERAL FINANCE LTD. vs. COMMISSIONER OF INCOME TAX DELHI

ITA/1233/2008HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…SuEali Sugar Works (P) Ltd. | 236 ITR 51Bl related to statutory liabilities. Further, in the following cases, the amounts transferred to the profit and loss account were held to be chargeable receipts of the assessee from trade:- (a) (b) (c) (d) CIT Vs. AVM , 146 ITR 355 Punjab Steel Scrap Merchants Ass. Vs. ClT, 43 ITR 164. CIT Vs. Batlibol, 149 ITR 664. Punjab Distilling lndustries Vs. ClT, 35 ITR 519. 14. Ms. Chopra, thqs concluded her arguments by submitting that since the amount collected by the assessee remained uncla'imed, ITA 458 of 1984 &.other connected matters Page77 of24 and was hever given back to…

COMMISSIONER OF INCOME TAX DEL vs. THE MOTOR & GENERAL FINANCE LT

ITA/209/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ali Swgar Warks (P) I-td, | 236 ITR 5181 related to statutory liabilities. . Further, in the following cases, the amounts transferred to the profit and loss account were held to be chargeable receipts of the assessee from trade:- (a) (b) (c) (d) CIT Vs, AVM , 146 ITR 355. Punjab Steel Scrap Merchants Ass. Vs. ClT, 43 ITR 164. CIT Vs. Batlibol, 149 ITR 664. Punjab Distilling lndustries Vs. ClT, 35 ITR 519. L4. Ms. Chopra, thus concluded her arguments by submitting that since the amount collected by the assessee remained unclaimed, ITA 458 of L9B4 & other connected matters Page 11 of 24 -- and was never given bac…

THE MOTOR & GENERAL FINANCE LT vs. COMMISSIONER OF INCOME TAX VI

ITA/117/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ali Swgar Warks (P) I-td, | 236 ITR 5181 related to statutory liabilities. . Further, in the following cases, the amounts transferred to the profit and loss account were held to be chargeable receipts of the assessee from trade:- (a) (b) (c) (d) CIT Vs, AVM , 146 ITR 355. Punjab Steel Scrap Merchants Ass. Vs. ClT, 43 ITR 164. CIT Vs. Batlibol, 149 ITR 664. Punjab Distilling lndustries Vs. ClT, 35 ITR 519. L4. Ms. Chopra, thus concluded her arguments by submitting that since the amount collected by the assessee remained unclaimed, ITA 458 of L9B4 & other connected matters Page 11 of 24 -- and was never given bac…

THE MOTOR & GENERAL FINANCE LT vs. COMMISSIONER OF INCOME TAX VI

ITA/124/2007HC Delhi18 Feb 2011

Bench: CASES PERTAINING TO SPECIAL BENCHES

…ali Swgar Warks (P) I-td, | 236 ITR 5181 related to statutory liabilities. . Further, in the following cases, the amounts transferred to the profit and loss account were held to be chargeable receipts of the assessee from trade:- (a) (b) (c) (d) CIT Vs, AVM , 146 ITR 355. Punjab Steel Scrap Merchants Ass. Vs. ClT, 43 ITR 164. CIT Vs. Batlibol, 149 ITR 664. Punjab Distilling lndustries Vs. ClT, 35 ITR 519. L4. Ms. Chopra, thus concluded her arguments by submitting that since the amount collected by the assessee remained unclaimed, ITA 458 of L9B4 & other connected matters Page 11 of 24 -- and was never given bac…

LOGITRONICS PVT LTD vs. COMMISSIONER OF INCOME TAX & ANR

ITA/1623/2010HC Delhi18 Feb 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

Section 2(24)Section 41(1)

…he amount referable to the loans obtained by the Assessee towards the purchase of its capital asset would not constitute a trading receipt. The said issue has been fortified by the judgment of this Court in Commissioner of Income Tax v. A.V.M. Ltd. (1984) 146 ITR 355.” 21. The Court was also of the view that Section 28(iv) of the Act would not be attracted, as it would not be treated income under the said provision in the following terms: “xxx xxx xxx 27.2. The Division Bench of the Bombay High Court presided over by His Lordship Justice S.H. Kapadia (as he then was) in Mahindra and Mahindra L…

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