Birla Cotton Spinning & Weaving Mills Ltd. v. CIT

64 ITR 568High Court1967#4716 most cited

What is Birla Cotton Spinning & Weaving Mills Ltd. v. CIT authority for?

Expenses incurred for the purpose of business, even if not directly generating immediate profits, are deductible if they serve to carry on the business and protect the assessee's interests. The assessee determines commercial expediency, not the tax authorities.

25

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2016 to 2023.

Also referred to as

Birla Cotton Spinning & Weaving Mills Ltd. v. CIT · business expenditure · commercial expediency · deductible expenses · protection of business interest · allowable deductions · income tax act

Judgments citing Birla Cotton Spinning & Weaving Mills Ltd. v. CIT

ADDL. CIT, SPECIAL RANGE- 1, NEW DELHI vs. AMWAY INDIA ENTERPRISES PVT. LTD., NEW DELHI

In the result, the appeal of the revenue is dismissed

ITA 6707/DEL/2018[2012-13]Status: DisposedITAT Delhi08 May 2023AY 2012-13

Bench: Shri C.M. Garg & Dr. B. R. R. Kumaraddl. Cit, Vs. Amway India Enterprises Pvt. Ltd, 1St Floor, Plot No. 8, Elegance Special Range-1, New Delhi Tower, Jasola, New Delhi -110025 (Appellant) (Respondent) Pan: Aaaca5603Q Assessee By : Sh. Sudesh Garg, Adv Sh. Prince Bansal, Ca Ms. Bhavya Garg, Ca Revenue By: Sh. P. Praveen Sidharth, Cit Dr Date Of Hearing 16/02/2023 Date Of Pronouncement 08/05/2023

For Appellant: Sh. Sudesh Garg, AdvFor Respondent: Sh. P. Praveen Sidharth, CIT DR
Section 32Section 37(1)

…d be incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business (Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect his own interest. It is not open to Income-tax department to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency is not a term of ar…

DY. COMMISSIONER OF INCOME TAX , CIRCLE-16(1), HYDERABAD vs. NIPRO MEDICAL INDIA PRIVATE LIMITED , HYDERABAD

In the result, appeal of the Revenue is dismissed

ITA 1410/HYD/2019[2016-17]Status: DisposedITAT Hyderabad15 Dec 2022AY 2016-17

Bench: Shri Rama Kanta Panda & Shri K.Narasimha Chary

For Appellant: Shri Kishor Phadke, ARFor Respondent: Shri Naveen Kumar, DR
Section 115JSection 143(3)Section 37(1)

…s was to be allowed as business expenditure, inasmuch as it was paid to make the contractual obligation and that too through proper arbitration and, therefore, in the light of the decision reported in Birla Cotton Spinning and Weaving Mills Ltd vs. CIT (1967) 64 ITR 568 (Cal) and CIT vs. Navsari Cotton and Silk Mills Ltd (1982) 135 ITR 546 (Guj), the same is allowable as an expenditure. Ld. CIT(A) deleted the addition made on account of the late payment of PF also. 5. Challenging the order of the Ld. CIT(A) in respect of the addition of Rs. 3 crores under section 37(1) of the Act, Revenue is in this appeal. It i…

ITO WARD - 2(2), NEW DELHI vs. ALL CHECK DEALS INDIA PVT. LTD., NEW DELHI

The appeal of the revenue is dismissed

ITA 2923/DEL/2019[2014-15]Status: DisposedITAT Delhi24 Nov 2022AY 2014-15

Bench: Shri Shamim Yahya & Shri Anubhav Sharmaito, Vs. All Check Deals India Pvt. Ltd, Ward-2(2). 94, Meghdoot Building, Gf- New Delhi 12A, Nehru Place, New Delhi (Appellant) (Respondent)

For Appellant: Shri Sharat Rao, AdvFor Respondent: Shri Kanav Bali, Sr. DR
Section 143(3)Section 37(1)Section 40Section 40A(2)(a)Section 94C

…pon the judgments of Hon’ble Supreme Court in the case of CIT Vs. Malyalam Plantation Ltd. 53 ITR 140, Shri Meenakshi Mills Ltd. Vs. CIT, 63 ITR 207, CIT Vs. Dhanrajgirji Raja Narsingirji, 94 ITR 544 (SC), Birla Cotton Spinning and Weaving Mills Ltd. Vs. CIT, 64 ITR 568 (Calcutta), CIT Vs. Modi Revlon Pvt. Ltd., 26 taxmann.com 133 (Delhi) in support of its contention that expenses incurred for the purposes of business has to be allowed. These judgments supports the argument of the appellant wherein it is held that expenditure incurred for carrying on business and to protect the interest of business has to be cons…

HIGHGRACE INVESTMENTS P. LTD., HYD,HYDERABAD vs. ACIT, CENTRAL CIRCLE-8, HYD, HYDERABAD

Appeals are allowed in above terms

ITA 635/HYD/2015[2008-09]Status: DisposedITAT Hyderabad13 Apr 2022AY 2008-09

Bench: Shri S.S. Godara & Shri L. P. Sahu

For Respondent: Shri T. Sunil Goutam. (D.R.)
Section 143(3)Section 37(1)Section 40A(2)(a)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

HIGHGRACE INVESTMENTS P. LTD., HYD,HYDERABAD vs. ACIT, CENTRAL CIRCLE-8, HYD, HYDERABAD

Appeals are allowed in above terms

ITA 634/HYD/2015[2007-08]Status: DisposedITAT Hyderabad13 Apr 2022AY 2007-08

Bench: Shri S.S. Godara & Shri L. P. Sahu

For Respondent: Shri T. Sunil Goutam. (D.R.)
Section 143(3)Section 37(1)Section 40A(2)(a)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

ELEM INVESTMENTS P. LTD., HYD,HYDERABAD vs. ACIT, CENTRAL CIRCLE-8, HYD, HYDERABAD

Appeals are allowed in above terms

ITA 624/HYD/2015[2007-08]Status: DisposedITAT Hyderabad13 Apr 2022AY 2007-08

Bench: Shri S.S. Godara & Shri L. P. Sahu

For Respondent: Shri T. Sunil Goutam. (D.R.)
Section 143(3)Section 37(1)Section 40A(2)(a)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

ITO, WARD - 2(3), KOLKATA, KOLKATA vs. M/S. HEIGHT INSURANCE SERVICES LTD.,, KOLKATA

In the result, the appeal of the revenue is dismissed

ITA 2163/KOL/2017[2009-10]Status: DisposedITAT Kolkata22 Jan 2020AY 2009-10

Bench: Shri S.S.Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.2163/Kol/2017 ("नधा"रणवष" / Assessment Year: 2009-10)

For Appellant: Shri Radhey Shyam, CITFor Respondent: Shri A.K. Tibrewal, FCA
Section 133Section 143(3)

…the business and to earn profits, the assessee can claim deduction even though there was no compelling necessity to incur such expenditure. Further, within the jurisdictional High Court, in the case of Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal), it was held that though the main objects of business is to earn profits, business purposes are wider than profit-making purposes. Business expediency does not require that expenses should be incurred only for earning immediate profits. Expenses incurred though M/s Height Insurance Services Ltd. Assessment Year:2009-10 not directly related t…

M/S. ELEL HOTELS AND INVESTMENTS LTD.,MUMBAI vs. DCIT, NEW DELHI

In the result, the appeal of Revenue and the assessee for assessment year 2012-13 are dismissed

ITA 4654/DEL/2014[2010-11]Status: DisposedITAT Delhi04 Dec 2018AY 2010-11

Bench: Sh. H.S. Sidhu & Sh. O.P. Kantassessment Year: 2010-11 M/S. Elel Hotels & Vs. Dcit, Investments Ltd., Central Circle-13, New Delhi Mandlik House, Mandlik Road, Colaba, Mumbai Pan :Aaace2846D (Appellant) (Respondent) & Assessment Years: 2012-13 M/S. Elel Hotels & Vs. Acit, Investments Ltd., Central Circle-03, R/O. Mandlik House, Mandlik Jhandewalan, New Delhi Road, Colaba, Mumbai Pan :Aaace2846D (Appellant) (Respondent) & Assessment Years: 2010-11 Acit, Vs. M/S. Elel Hotels & Central Circle-13, Investments Ltd., New Delhi R/O. Mandlik House, Mandlik Road, Colaba, Mumbai Pan :Aaace2846D (Appellant) (Respondent)

Section 143(2)

…identals are also essential for preserving and maintaining the hotel property owned by the appellant company are also bare minimum expenses required for maintaining the company and its assets. It was held in Birla Cotton Spinning & Weaving Mills Ltd. vs. CIT [64 ITR 568, 584 (Cal.)] that business includes day-to-day running of the business, preservation of business and protection of its assets and property from expropriation, coercive process or hostile title, payment of statutory dues and taxes and things incidental to carrying on business and expenses relating thereto were allowable business expenses. This ruli…

M/S ELEM INVESTMENT(P)LIMITED,HYDERABAD vs. THE DICT, HYDERABAD

In the result, appeal of assessee for AY

ITA 121/HYD/2010[2005-06]Status: DisposedITAT Hyderabad03 Aug 2018AY 2005-06

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiahappellant Respondent

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

M/S FINCITY INVESTMENTS PVT LTD,HYDERABAD vs. DCIT, HYDERABAD

In the result, appeal of assessee for AY

ITA 119/HYD/2010[2005-06]Status: DisposedITAT Hyderabad03 Aug 2018AY 2005-06

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiah

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It :- 14 -: M/s…

M/S HIGHGRACE INVESTMENTS PVT LTD,HYDERABAD vs. DCIT, HYDERABAD

In the result, appeal of assessee for AY

ITA 114/HYD/2010[2005-06]Status: DisposedITAT Hyderabad03 Aug 2018AY 2005-06

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiahappellant Respondent

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

M/S FINCITY INVESTMENTS PVT.LTD.,,HYDERABAD vs. ACIT, HYDERABAD

In the result, appeal of assessee for AY

ITA 591/HYD/2006[2002-03]Status: DisposedITAT Hyderabad03 Aug 2018AY 2002-03

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiah

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It :- 14 -: M/s…

M/S HIGHGRACE INVESTEMENTS PVT.LTD.,,HYDERABAD vs. ACIT, HYDERABAD

In the result, appeal of assessee for AY

ITA 590/HYD/2006[2002-03]Status: DisposedITAT Hyderabad03 Aug 2018AY 2002-03

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiahappellant Respondent

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

M/S ELEM INVESTMENTS PVT.LTD.,,HYDERABAD vs. ACIT, HYDERABAD

In the result, appeal of assessee for AY

ITA 589/HYD/2006[2002-03]Status: DisposedITAT Hyderabad03 Aug 2018AY 2002-03

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiahappellant Respondent

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

M/S VECYES INVESTEMENT PVT LTD.,,HYDERABAD vs. ACIT, HYDERABAD

In the result, the appeal of assessee is partly allowed

ITA 588/HYD/2006[2002-03]Status: DisposedITAT Hyderabad03 Aug 2018AY 2002-03

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiah

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…only for earning immediate :- 13 -: profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

M/S HIGH GRACE INVESTMENTS PVT.LTD.,,HYDERABAD vs. ACIT, HYDERABAD

In the result, appeal of assessee for AY

ITA 619/HYD/2008[2004-05]Status: DisposedITAT Hyderabad03 Aug 2018AY 2004-05

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiahappellant Respondent

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

M/S ELEM INVESTMENTS PVT.LTD.,,HYDERABAD vs. ACIT, HYDERABAD

In the result, appeal of assessee for AY

ITA 617/HYD/2008[2004-05]Status: DisposedITAT Hyderabad03 Aug 2018AY 2004-05

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiahappellant Respondent

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

M/S FINCITY INVESTMENTS PVT.LTD.,,HYDERABAD vs. ACIT, HYDERABAD

In the result, appeal of assessee for AY

ITA 616/HYD/2008[2004-05]Status: DisposedITAT Hyderabad03 Aug 2018AY 2004-05

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiah

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It :- 14 -: M/s…

M/S HIGHGRACE INVESTEMENTS PVT.LTD.,,HYDERABAD vs. ACIT, HYDERABAD

In the result, appeal of assessee for AY

ITA 733/HYD/2006[2003-04]Status: DisposedITAT Hyderabad03 Aug 2018AY 2003-04

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiahappellant Respondent

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It mean everyth…

M/S FINCITY INVESTMENTS PVT.LTD.,,HYDERABAD vs. ACIT, HYDERABAD

In the result, appeal of assessee for AY

ITA 732/HYD/2006[2003-04]Status: DisposedITAT Hyderabad03 Aug 2018AY 2003-04

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiah

For Appellant: Shri K.C. Devdas, ARFor Respondent: Smt. Suman Malik, DR
Section 37(1)Section 40A(2)

…incurred only for earning immediate profits. Expenses incurred though not directly related to earning to income, may be allowable deductions if they are related to the carrying on of the business vide Birla Cotton Spinning & Weaving Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal)). It is for the assessee to decide how best to protect its own interest. It is not open to AO to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure (CIT Vs. Dhanrajgiri Raja Narasingiri (1973) 91 ITR 544 (SC)). Expression "commercial expediency" is not a term of art. It :- 14 -: M/s…

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Birla Cotton Spinning & Weaving Mills Ltd. v. CIT (64 ITR 568) — Cited in 25 Judgments | BharatTax