Bharat Earth Movers v. CIT

245 ITR 428Supreme Court of India2000#52 most cited

What is Bharat Earth Movers v. CIT authority for?

A business liability that has definitely arisen in an accounting year is deductible even if it needs to be quantified and discharged later, as long as its incurring is certain and can be reasonably estimated.

901

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2006 to 2026.

Also referred to as

Bharat Earth Movers v CIT · 245 ITR 428 · ascertainable liability · unascertainable liability · accrued liability · provision for expenses · deduction · accounting year · future discharge

Also reported as

112 Taxmann 616 SCC 645162 CTR 325

Sections most often in play

Section 37(1)Section 143(3)Section 115JBSection 14ASection 40(a)(ia)Section 195Section 148Section 1961
Read the full judgment

Issues it is cited on

section 35dmercantile system of accountingenduring benefitintangible assetssection 40(a)(i)section 35revenue expenditurebook profitssection 37(1)section 115jbamalgamationsection 37

Judgments citing Bharat Earth Movers v. CIT

Commissioner of Income Tax-XI vs. M/S Dlf Commercial Project Corporation

The appeal is allowed in the above terms

ITA/507/2013HC Delhi15 Jul 2015

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 263Section 32Section 32(1)(iia)

…capement of income or prejudice to the Revenue and there was no error calling for exercise of revisional jurisdiction. 12. Relying upon the decisions reported as Saurashtra Cement and Chemicals v. CIT, 1995 (213) ITR 523 and Bharat Earth Movers v. CIT, 245 ITR 428 (SC), it was submitted that so long as the estimate is based upon reasonable certainty though actual ITA 507/2013 Page 12 quantification may not be possible, such exercise should not be rejected. Likewise, it was submitted – based upon the decision in CIT v. Shoorji Vallabhdas and Co., 1962 (46) ITR 144 that what is to be seen is whe…

Ing Vysya Bank Ltd vs. ACIT

In the result, revenue’s appeal for Assessment Year 2007-08 is dismissed

ITA 898/BANG/2013[2007-08]Status: DisposedITAT Bangalore06 Feb 2015AY 2007-08

Bench: Shri Rajpal Yadav & Shri Jason P. Boaz

For Appellant: Shri S. Ananthan, C.AFor Respondent: Shri Farhat Hussain Qureshi, CIT (D.R)
Section 115JSection 143(3)

…ned and actual expenditure incurred by the assessee and hence is rightly claimed as deduction. In support of these contentions, the learned Authorised Representative has placed reliance on the following judicial pronouncements :- i) Bharat Earth Movers Ltd. (245 ITR 428); ii) Metal Box of India Ltd. (73 ITR 53) (SC); iii) Calcutta Co. Ltd. (37 ITR 1) (SC). iv) Rotork Controls India (P) Ltd. (2009-TIOL-64-SC-IT). 6.3 Per contra, the learned Departmental Representative supported the orders of the authorities below. 6.4 We have heard the rival contentions and perused and carefully considered the material on recor…

DCIT vs. Ing Vysya Bank, Bangalore

In the result, appeal by the Assessee is partly allowed while the 68

ITA 318/BANG/2013[2005-06]Status: DisposedITAT Bangalore06 Feb 2015AY 2005-06

Bench: Shri N.V. Vasudevan & Shri Abraham P. Georgeassessment Year : 2005-06 M/S. Ing Vysya Bank Ltd., Vs. The Assistant Commissioner Of Ing Vysya House, Income Tax, No.22, M.G. Road, Circle 11(4), Bangalore – 560 001. Bangalore. Pan: Aabct 0529M Appellant Respondent Assessment Year : 2005-06 The Deputy Commissioner Of Vs. M/S. Ing Vysya Bank Ltd., Income Tax, Bangalore – 560 001. Circle 11(4), Pan: Aabct 0529M Bangalore. Appellant Respondent Assessee By : Shri S. Ananthan, C.A. Revenue By : Shri C.H. Sundar Rao, Cit-I(Dr) Date Of Hearing : 20.01.2015 Date Of Pronouncement : 06.02.2015 O R D E R Per N.V. Vasudevan

For Appellant: Shri S. Ananthan, C.AFor Respondent: Shri C.H. Sundar Rao, CIT-I(DR)
Section 1Section 10Section 234D

…im that the Hon'ble Delhi High Court in the case of CIT v. Bharath Heavy Electricals Ltd. (352 ITR 88 (Del) while dealing with a similar provision made on account of wage revision, held, following the decision of the Hon'ble Supreme Court in the case of BEML (245 ITR 428) (SC) that when the incurring of the liability is certain and it was only a question of quantification of the liability and if the quantification of the liability by the assessee is on a reasonable basis, then the deduction claimed has to be allowed and cannot be termed as contingent. Our attention was also drawn to the decision of the Hon'ble IT…

Ing Vysya Bank Ltd vs. ACIT, Bangalore

In the result, appeal by the Assessee is partly allowed while the 68

ITA 288/BANG/2013[2005-06]Status: DisposedITAT Bangalore06 Feb 2015AY 2005-06

Bench: Shri N.V. Vasudevan & Shri Abraham P. Georgeassessment Year : 2005-06 M/S. Ing Vysya Bank Ltd., Vs. The Assistant Commissioner Of Ing Vysya House, Income Tax, No.22, M.G. Road, Circle 11(4), Bangalore – 560 001. Bangalore. Pan: Aabct 0529M Appellant Respondent Assessment Year : 2005-06 The Deputy Commissioner Of Vs. M/S. Ing Vysya Bank Ltd., Income Tax, Bangalore – 560 001. Circle 11(4), Pan: Aabct 0529M Bangalore. Appellant Respondent Assessee By : Shri S. Ananthan, C.A. Revenue By : Shri C.H. Sundar Rao, Cit-I(Dr) Date Of Hearing : 20.01.2015 Date Of Pronouncement : 06.02.2015 O R D E R Per N.V. Vasudevan

For Appellant: Shri S. Ananthan, C.AFor Respondent: Shri C.H. Sundar Rao, CIT-I(DR)
Section 1Section 10Section 234D

…im that the Hon'ble Delhi High Court in the case of CIT v. Bharath Heavy Electricals Ltd. (352 ITR 88 (Del) while dealing with a similar provision made on account of wage revision, held, following the decision of the Hon'ble Supreme Court in the case of BEML (245 ITR 428) (SC) that when the incurring of the liability is certain and it was only a question of quantification of the liability and if the quantification of the liability by the assessee is on a reasonable basis, then the deduction claimed has to be allowed and cannot be termed as contingent. Our attention was also drawn to the decision of the Hon'ble IT…

Commissioner of Income Tax-VI vs. M/S. Yum Restaurants (I) Pvt. Ltd

ITA/614/2014HC Delhi30 Jan 2015
Section 260ASection 37

…t cannot be allowed. On the other hand, the assessee’s counsel contended that the provision was made keeping in mind past experience. 31. Here, this Court recollects the decision of the Supreme Court in Bharat Earth Movers v. Commissioner of Income Tax [2000] 245 ITR 428 (SC) is of relevance. The Court had on that occasion observed as follows: "The law is settled: If a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should a…

Commissioner of Income Tax-VI vs. M/S Yum Restaurants (I) Pvt. Ltd

ITA-614/2014HC Delhi30 Jan 2015
Section 260ASection 37

…t cannot be allowed. On the other hand, the assessee’s counsel contended that the provision was made keeping in mind past experience. 31. Here, this Court recollects the decision of the Supreme Court in Bharat Earth Movers v. Commissioner of Income Tax [2000] 245 ITR 428 (SC) is of relevance. The Court had on that occasion observed as follows: "The law is settled: If a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should a…

Oswal Agro Mills Ltd vs. Commissioner of Income Tax

The appeal is partly allowed

ITA/42/2000HC Delhi12 Jan 2015
Section 43B

…the subject and especially relied upon the judgment of the Supreme Court in Kedarnath Jute Manufacturing Co. Ltd. v. CIT: (1971)82 ITR 363 (SC), Calcutta Co. ltd. v. CIT: (1959) 37 ITR 1 (SC) and the judgment reported as Bharat Earth Movers v. CIT: (2000) 245 ITR 428 (SC). It is held that the amount is not an ascertained liability. The Court held that such liability is contingent upon an uncertain fact and, therefore, deduction claimed by the assessee was not permissible in view of Section 43B of the Income Tax Act. This Court is governed by the said precedent and accordingly answers question Nos. 1 an…

Commissioner of Income Tax vs. M/S Vodafone Essar South Ltd

ITA/594/2014HC Delhi29 Oct 2014

…y would be allowed in the profit and loss account when additional conditions stated therein were also satisfied. [See decision of the Supreme Court in Shree Sajjan Mills Ltd. v. CIT, (1985) 156 ITR 585 (SC)] 15. Again in Bharat Earth Movers v. CIT (2000) 245 ITR 428 (SC), it has been observed:- “The law is settled: If a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with…

Oswal Agro Mills Ltd vs. Commissioner of Income Tax

The appeal stands disposed of with no order as to

ITA - 41 / 2000HC Delhi07 Feb 2014
For Appellant: Mr C.S. Aggarwal, Sr. Advocate withFor Respondent: Mr Sanjeev Sabharwal, Sr. Standing Counsel
Section 260A(1)Section 43B

…th Jute Manufacturing Co. Ltd. v. CIT: (1971)82 ITR 363 (SC), Calcutta Co. ltd. v. CIT: (1959) 37 ITR 1 (SC), ACIT v. Rattan Chand Kapoor: (1984) 149 ITR 1 (Del.), CIT v. Kwality Ice Cream: (2008) 304 ITR 384 (Del.) and Bharat Earth Movers v. CIT: (2000) 245 ITR 428 (SC). 16. It was submitted that since the subject liability was in the nature of a trading liability which had accrued, the same could not be treated as a contingent liability. It was contended by the appellant that the subject 2014:DHC:738-DB ITA No.41/2000 Page 10 of 24 obligation was an actual liability in praesenti a…

Oswal Agro Mills Ltd vs. Commissioner of Income Tax

The appeal stands disposed of with no order as to

ITA/41/2000HC Delhi07 Feb 2014
For Appellant: Mr C.S. Aggarwal, Sr. Advocate withFor Respondent: Mr Sanjeev Sabharwal, Sr. Standing Counsel
Section 260A(1)Section 43B

…th Jute Manufacturing Co. Ltd. v. CIT: (1971)82 ITR 363 (SC), Calcutta Co. ltd. v. CIT: (1959) 37 ITR 1 (SC), ACIT v. Rattan Chand Kapoor: (1984) 149 ITR 1 (Del.), CIT v. Kwality Ice Cream: (2008) 304 ITR 384 (Del.) and Bharat Earth Movers v. CIT: (2000) 245 ITR 428 (SC). 16. It was submitted that since the subject liability was in the nature of a trading liability which had accrued, the same could not be treated as a contingent liability. It was contended by the appellant that the subject 2014:DHC:738-DB ITA No.41/2000 Page 10 of 24 obligation was an actual liability in praesenti a…

Commissioner of Income Tax-V vs. Sri S.Venkat Reddy, (PAN ALAPS4009A)

ITTA/501/2013HC Telangana24 Oct 2013

Commissioner of Income Tax-IV vs. M/S Hero Management Service Limited

ITA/439/2013HC Delhi23 Sept 2013
Section 14ASection 271(1)(c)

…arly, with regard to salary of Rs.1,86,651/-, it is pointed out that salary pertains to this year but was paid in the next year. AMC charges of Rs 10,29,643 relate to this year in question. The Supreme Court decision in Bharat Earth Movers v. CIT (2000) 245 ITR 428 (SC) is of relevance and observes:- “The law is settled: If a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimate…

CIT vs. Hero Management Service Ltd

ITA - 439 / 2013HC Delhi23 Sept 2013
Section 14ASection 271(1)(c)

…arly, with regard to salary of Rs.1,86,651/-, it is pointed out that salary pertains to this year but was paid in the next year. AMC charges of Rs 10,29,643 relate to this year in question. The Supreme Court decision in Bharat Earth Movers v. CIT (2000) 245 ITR 428 (SC) is of relevance and observes:- “The law is settled: If a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimate…

Commissioner of Income Tax-III vs. M/s Sree Rayalaseema Green Energy Limited

ITTA/439/2013HC Telangana19 Sept 2013

Commissioner of Income Tax vs. Bharat Heavy Electrical Limited

The appeals are disposed off in the above

ITA/278/2010HC Delhi11 Sept 2012
Section 10Section 37(1)

…d not be allowed and that the claim or deduction was allowable when actually the entire quantum of liability could be calculated. The order of the AO was upheld in appeal. The Tribunal relying the Supreme Court’s decision in CIT vs. Bharat Earth Movers, 245 ITR 428 allowed the assessee’s claim. The Tribunal noticed as follows: - “13. In the assessee’s case also, it is noticed that the provision for the wage revision is factored on the basis of past experience, interim pay commissions of govt. employees, available pay commission reports of public sector employees, union demands and other relevant fac…

Commissioner of Incometa Viz vs. M/S Rajam Extractions Pvt

ITTA/42/2000HC Telangana01 Aug 2012

Bench: GODA RAGHURAM,M.S.RAMACHANDRA RAO

Airports Authority of India vs. Commissioner of Income Tax

Appeals are disposed of in the aforesaid terms

ITA - 432 / 2008HC Delhi16 Dec 2011

…01 crore, but rejected this plea on the ground that the date of release of the money and the person to whom the money had been paid had not been stated. 17. No doubt, having regard to the judgment of the Apex Court in Bharat Earth Movers Vs. CIT, 245 ITR 428 which laid down that the liability should have been actually incurred in the year and it should be capable of reasonable ascertainment, the assessee is to prove that such a liability had actually been 2011:DHC:6488-DB ITA Nos.ITA 432/2008,433/2008,ITA 437/2008,ITA 517/2008 Page 21 of 26 ITA 792/2008,ITA 1250/2008,ITA 1251/2008…

Commissioner of Income Tax vs. Sri. B. Venkatesam

The appeal stands disposed of with no order as to

ITTA/41/2000HC Telangana01 Dec 2011
For Appellant: Mr C.S. Aggarwal, Sr. Advocate withFor Respondent: Mr Sanjeev Sabharwal, Sr. Standing Counsel
Section 260A(1)Section 43B

…th Jute Manufacturing Co. Ltd. v. CIT: (1971)82 ITR 363 (SC), Calcutta Co. ltd. v. CIT: (1959) 37 ITR 1 (SC), ACIT v. Rattan Chand Kapoor: (1984) 149 ITR 1 (Del.), CIT v. Kwality Ice Cream: (2008) 304 ITR 384 (Del.) and Bharat Earth Movers v. CIT: (2000) 245 ITR 428 (SC). 16. It was submitted that since the subject liability was in the nature of a trading liability which had accrued, the same could not be treated as a contingent liability. It was contended by the appellant that the subject ITA No.41/2000 Page 10 of 24 obligation was an actual liability in praesenti and not a liabili…

National Agricultural Co-Operative Marketing Federagin of India Ltd vs. Commissioner of Income Tax Delhi XI & Anr

ITA/1096/2008HC Delhi03 Jun 2011

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

…t though the decision was rendered in the context of land acquisition, however, the ratio is applicable to award made by the Arbitrators. Learned counsel also relied upon the cases of R.C.Gupta v. CIT (2008) 298 ITR 161; Bharat Earth Movers v. CIT (2000) 245 ITR 428 (SC); Navjivan Roller Flour and Pulse Mills Ltd. v. DCIT (2009) ITAs No.1096/2008, 1138/2008, & 1146/2008 Page 7 of 15 315 ITR 190 and J.K. Industries Ltd. v. UOI 297 ITR 176. Faslika Electric Supply Co. v. CIT 143 ITR 551 (Delhi) 5. On the other hand, learned counsel for the Revenue submitted that it was only with the passin…

National Agricultural Co-Operative Marketing Federation of India Ltd vs. Commissioner of Income Tax Delhi XI & Anr

ITA - 1138 / 2008HC Delhi03 Jun 2011

…at though the decision was rendered in the context of land acquisition, however, the ratio is applicable to award made by the Arbitrators. Learned counsel also relied upon the cases of **R.C.Gupta v. CIT** (2008) 298 ITR 161: Bharat Earth Movers v. CIT (2000) 245 ITR 428 (SC); Navjivan Roller Flour and Pulse Mills Ltd. v. DCIT (2009) ![](_page_6_Picture_1.jpeg) 315 ITR 190 and *J.K. Industries Ltd. v. UOI* 297 ITR 176. Faslika Electric Supply Co. v. CIT 143 ITR 551 (Delhi) - 5. On the other hand, learned counsel for the Revenue submitted that it was only with the passing of award by the appellate authority on…