Birla Cotton Spinning & Weaving Mills Ltd. v. CIT

64 ITR 568High Court1967#4709 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 366,339 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

M/S Elem Investments Pvt.Ltd., Hyderabad vs. ACIT, Hyderabad

In the result, appeal of assessee for AY

ITA 731/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…

ITO, Ward-2(3), Durgapur, Kolkata vs. M/S Height Insurance Services Ltd., Kolkata

Appeal is dismissed

ITA 2266/KOL/2016[2011-12]Status: DisposedITAT Kolkata08 Jun 2018AY 2011-12

Bench: Shri S.S.Godara & Dr. A.L. Sainiassessment Year :2011-12 Income Tax Officer, V/S. M/S Height Insurance Ward-2(3), R/No.10/21, Services Ltd., Room 7Th Floor, Aayakar No.319,3Rd Floor, Bhawan, P-7, Kamalaya Centre, 156A, Chowringhee Square, Lenin Sarani, Kolakta-13 Kolkata-69 [Pan No.Aacch 0943 G] .. अपीलाथ" /Appellant ""यथ"/Respondent Md. Usman, Cit-Dr अपीलाथ" क" ओर से/By Appellant Shri A.K. Tibrewal, Fca ""यथ" क" ओर से/By Respondent 31-05-2018 सुनवाई क" तार"ख/Date Of Hearing 08-06-2018 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per S.S.Godara:- This Revenue’S Appeal For Assessment Year 2011-12 Arises Against Commissioner Of Income Tax (Appeals)-14, Kolkata’S Order Dated 31.08.2016 In Case No. 188/Cit(A)-14/Wd-1(1)/2015-16, In Proceedings U/S 143(3) Of The Income Tax Act, 1961; In Short ‘The Act’. 2. The Revenue’S Solitary Grievance Pleaded In The Instant Appeal Seeks To Revive Section 37 R.W 40(A)(Ia) Disallowances / Addition Of ₹66,18,00,000/- Pertaining To Assessee’S Service Charges Paid To M/S Golden Trust Financial Services (Gtfs) Hereafter For Having Acted As Its Agent. It’S Next Two Averments Are That The Cit(A) Has Erred In Law As Well As On Facts In Examining Assessee’S Exclusive Method Of Accounting In Service Tax Receivable On Output Services As Against Inclusive Method Of Service Tax

Section 143(3)Section 37

…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 not directly related to earning of income, may be allowable deductions if they ar…

I.T.O WD - 8(3), Kolkata vs. M/S Ruia Sons Pvt Ltd., Kolkata

In the result the appeal by the revenue is partly allowed

ITA 365/KOL/2013[2009-10]Status: DisposedITAT Kolkata03 Mar 2017AY 2009-10

Bench: Hon’Ble Sri M.Balaganesh, Am & Shri Partha Sarathi Chaudhury, Jm] I.T.A No. 365/Kol/2013 Assessment Year : 2009-10 I.T.O., Ward-8(3), -Vs.- M/S. Ruia Sons Pvt. Ltd. Kolkata Kolkata [Pan : Aaccr 3949 Q] (Respondent) (Appellant) For The Appellant : Shri Arup Kumar Sinha, Cit For The Respondent : Shri Manoj Kataruka, Advocate

For Appellant: Shri Arup Kumar Sinha, CITFor Respondent: Shri Manoj Kataruka, Advocate
Section 143(2)Section 143(3)Section 194CSection 194JSection 301Section 40

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : KOLKATA [Before Hon’ble Sri M.Balaganesh, AM & Shri Partha Sarathi Chaudhury, JM] I.T.A No. 365/Kol/2013 Assessment Year : 2009-10 I.T.O., Ward-8(3), -vs.- M/s. Ruia Sons Pvt. Ltd. Kolkata Kolkata [PAN : AACCR 3949 Q] (Respondent) (Appellant) For the Appellant : Shri Arup Kumar Sinha, CIT For the Respondent : Shri Manoj Kataruka, Advocate Date of Hearing : 02.02.2017. Date of Pronouncement : 03.03.2017. ORDER Per Shri Partha Sarathi Chaudhury, JM This appeal preferred by the Revenue emanates from the order of ld. CIT(A)- VIII, Kolkata dated 26.11.2012 on t…

I.T.O WD - 7(3), Kolkata. vs. M/S Shalini Properties & Developers Private Limited., Kolkata

In the result the appeal preferred by the revenue is dismissed

ITA 171/KOL/2013[2009-10]Status: DisposedITAT Kolkata28 Feb 2017AY 2009-10

Bench: Hon’Ble Sri M.Balaganesh, Am & Shri Partha Sarathi Chaudhury, Jm] I.T.A No. 171/Kol/2013 Assessment Year : 2009-10 I.T.O., Ward-7(3) -Vs.- M/S. Shalini Properties & Developers Kolkata Pvt. Limited., Kolkata [Pan : Aahcs 7896 N] (Respondent) (Appellant) For The Appellant : Shri Arup Kumar Sinha, Cit For The Respondent : Shri Manoj Kataruka, Advocate

For Appellant: Shri Arup Kumar Sinha, CITFor Respondent: Shri Manoj Kataruka, Advocate
Section 143(3)Section 301Section 37(1)

…hich results in more fund being left for the purpose of carrying on the business there is always a possibility of higher profits. The expenditure which was incurred by the assessee was, therefore, allowable – Birla Cotton Spg. & Wvg. Mills Ltd. Vs. CIT (1967) 64 ITR 568 (Cal) followed. On the facts and in the circumstances of the case, what is to be examined is whether the transaction is a revenue expenditure and if so, whether the said expenditure had been laid out wholly and exclusively for commercial expediency. As the Income-tax Act does not define the terms “ capital expenditure “ and “ revenue expenditure “…

ACIT, New Delhi vs. M/S. Elel Hotels & Investment Ltd., Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 1080/DEL/2014[2008-09]Status: DisposedITAT Delhi29 Jul 2016AY 2008-09

Bench: Smt Diva Singh & Sh.L.P.Sahu

Section 153A

…9 ITR 58 (All.); Nakodar Bus Services Pvt.Ltd. 179 ITR 506 (Pun.); Chennai & Co.Pvt.Ltd. vs CIT 206 ITR 616 (Bom.); Hindustan Page 4 of 10 I.T.A .No.-1080/Del/2014 Chemicals Works Ltd. vs CIT 124 ITR 561; Birla Cotton Spinning & Weaving Mills Ltd. vs CIT 64 ITR 568, 584 (Cal.). 4.1. It was argued that the AO has merely allowed the government dues and has disallowed the remaining claim of expenses relating to security charges, electricity, water charges and salary to one Accountant and one office boy. 4.2. Considering the submissions, the CIT(A) came to the following conclusion:- 3.2. “I have considered t…