Brooke Bond India Ltd. v. CIT

225 ITR 798Supreme Court of India1997#390 most cited

What is Brooke Bond India Ltd. v. CIT authority for?

Expenditure incurred for increasing a company's share capital or expanding its capital base, such as expenses related to the issue of shares, constitutes capital expenditure. Such expenses are not deductible as revenue expenditure under Section 37(1) of the Income-tax Act, 1961, even if they incidentally benefit the business.

228

judgments rely on this decision, according to BharatTax’s citation analysis of 367,514 Indian tax judgments — from 2006 to 2026.

Also referred to as

Brooke Bond India Ltd. v. CIT · Section 37(1) · capital expenditure · revenue expenditure · share issue expenses · increase in capital · capital base expansion · deductibility · professional fees · enduring benefit

Also reported as

91 Taxmann 26

Sections most often in play

Section 37(1)Section 143(3)Section 14ASection 10BSection 28Section 35DSection 43(5)Section 143(1)
Read the full judgment

Issues it is cited on

section 35dspeculation losssection 43(5)strategic investmentenduring benefitsection 35capital expenditurerevenue expendituredisallowance under section 14abook profitscommercial expediencysection 37(1)

Judgments citing Brooke Bond India Ltd. v. CIT

DCIT, New Delhi vs. M/S. Housing and Urban Development Corporation Ltd., New Delhi

In the result, this ground of appeal is allowed for statistical purposes

ITA 3692/DEL/2013[2009-10]Status: DisposedITAT Delhi12 Feb 2016AY 2009-10

Bench: H.S. Sidhu & Sh. O.P. Kant

Section 35DSection 37

…rm loans etc., and therefore he held the expenses as capital in nature being for the purpose of extension of business of the assessee, in view of the judgment of the Hon’ble Supreme Court in the case of Brooke Bond India Vs. Commissioner of Income Tax, (1997) 225 ITR 798, and therefore not allowable. Before the learned Commissioner of Income Tax (Appeals), the assessee claimed that it was a non-banking financial institution engaged in providing long term finances for housing projects and urban development and for this purpose, the assessee raised funds by way of issue of bonds, debenture, deposits, loans in advan…

M/S Housing & Urban Devlopment Corporation Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, both the appeals filed by the Revenue are allowed for statistical purpose

ITA 3366/DEL/2013[2009-10]Status: DisposedITAT Delhi09 Feb 2016AY 2009-10

Bench: H.S. Sidhu & Sh. O.P. Kantsl. No.

Section 139(5)Section 143(1)Section 143(2)Section 14A

…rm loans etc., and therefore he held the expenses as capital in nature being for the purpose of extension of business of the assessee, in view of the judgment of the Hon’ble Supreme Court in the case of Brooke Bond India Vs. Commissioner of Income Tax, (1997) 225 ITR 798, and therefore not allowable. Before the learned Commissioner of Income Tax (Appeals), the assessee claimed that it was a non-banking financial institution engaged in providing long term finances for housing projects and urban development and for this purpose, the assessee raised funds by way of issue of bonds, debenture, deposits, loans in advan…

M/S Housing & Urban Devlopment Corporation Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, both the appeals filed by the Revenue are allowed for statistical purpose

ITA 3365/DEL/2013[2008-09]Status: DisposedITAT Delhi09 Feb 2016AY 2008-09

Bench: H.S. Sidhu & Sh. O.P. Kantsl. No.

Section 139(5)Section 143(1)Section 143(2)Section 14A

…rm loans etc., and therefore he held the expenses as capital in nature being for the purpose of extension of business of the assessee, in view of the judgment of the Hon’ble Supreme Court in the case of Brooke Bond India Vs. Commissioner of Income Tax, (1997) 225 ITR 798, and therefore not allowable. Before the learned Commissioner of Income Tax (Appeals), the assessee claimed that it was a non-banking financial institution engaged in providing long term finances for housing projects and urban development and for this purpose, the assessee raised funds by way of issue of bonds, debenture, deposits, loans in advan…

ACIT, New Delhi vs. M/S. Housing & Urban Development Corp. Ltd. (Hudco), New Delhi

In the result, both the appeals filed by the Revenue are allowed for statistical purpose

ITA 1562/DEL/2012[2007-08]Status: DisposedITAT Delhi09 Feb 2016AY 2007-08

Bench: H.S. Sidhu & Sh. O.P. Kantsl. No.

Section 139(5)Section 143(1)Section 143(2)Section 14A

…rm loans etc., and therefore he held the expenses as capital in nature being for the purpose of extension of business of the assessee, in view of the judgment of the Hon’ble Supreme Court in the case of Brooke Bond India Vs. Commissioner of Income Tax, (1997) 225 ITR 798, and therefore not allowable. Before the learned Commissioner of Income Tax (Appeals), the assessee claimed that it was a non-banking financial institution engaged in providing long term finances for housing projects and urban development and for this purpose, the assessee raised funds by way of issue of bonds, debenture, deposits, loans in advan…

ACIT, New Delhi vs. M/S. Housing & Urban Development Corp. Ltd. (Hudco), New Delhi

In the result, both the appeals filed by the Revenue are allowed for statistical purpose

ITA 1561/DEL/2012[2006-07]Status: DisposedITAT Delhi09 Feb 2016AY 2006-07

Bench: H.S. Sidhu & Sh. O.P. Kantsl. No.

Section 139(5)Section 143(1)Section 143(2)Section 14A

…rm loans etc., and therefore he held the expenses as capital in nature being for the purpose of extension of business of the assessee, in view of the judgment of the Hon’ble Supreme Court in the case of Brooke Bond India Vs. Commissioner of Income Tax, (1997) 225 ITR 798, and therefore not allowable. Before the learned Commissioner of Income Tax (Appeals), the assessee claimed that it was a non-banking financial institution engaged in providing long term finances for housing projects and urban development and for this purpose, the assessee raised funds by way of issue of bonds, debenture, deposits, loans in advan…

M/S. Housing & Urban Development Corporation Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, both the appeals filed by the Revenue are allowed for statistical purpose

ITA 1168/DEL/2012[2007-08]Status: DisposedITAT Delhi09 Feb 2016AY 2007-08

Bench: H.S. Sidhu & Sh. O.P. Kantsl. No.

Section 139(5)Section 143(1)Section 143(2)Section 14A

…rm loans etc., and therefore he held the expenses as capital in nature being for the purpose of extension of business of the assessee, in view of the judgment of the Hon’ble Supreme Court in the case of Brooke Bond India Vs. Commissioner of Income Tax, (1997) 225 ITR 798, and therefore not allowable. Before the learned Commissioner of Income Tax (Appeals), the assessee claimed that it was a non-banking financial institution engaged in providing long term finances for housing projects and urban development and for this purpose, the assessee raised funds by way of issue of bonds, debenture, deposits, loans in advan…

M/S. Housing & Urban Development Corporation Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, both the appeals filed by the Revenue are allowed for statistical purpose

ITA 1167/DEL/2012[2006-07]Status: DisposedITAT Delhi09 Feb 2016AY 2006-07

Bench: H.S. Sidhu & Sh. O.P. Kantsl. No.

Section 139(5)Section 143(1)Section 143(2)Section 14A

…rm loans etc., and therefore he held the expenses as capital in nature being for the purpose of extension of business of the assessee, in view of the judgment of the Hon’ble Supreme Court in the case of Brooke Bond India Vs. Commissioner of Income Tax, (1997) 225 ITR 798, and therefore not allowable. Before the learned Commissioner of Income Tax (Appeals), the assessee claimed that it was a non-banking financial institution engaged in providing long term finances for housing projects and urban development and for this purpose, the assessee raised funds by way of issue of bonds, debenture, deposits, loans in advan…

M/S. Housing & Urban Development Corporation Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, both the appeals filed by the Revenue are allowed for statistical purpose

ITA 1166/DEL/2012[2005-06]Status: DisposedITAT Delhi09 Feb 2016AY 2005-06

Bench: H.S. Sidhu & Sh. O.P. Kantsl. No.

Section 139(5)Section 143(1)Section 143(2)Section 14A

…rm loans etc., and therefore he held the expenses as capital in nature being for the purpose of extension of business of the assessee, in view of the judgment of the Hon’ble Supreme Court in the case of Brooke Bond India Vs. Commissioner of Income Tax, (1997) 225 ITR 798, and therefore not allowable. Before the learned Commissioner of Income Tax (Appeals), the assessee claimed that it was a non-banking financial institution engaged in providing long term finances for housing projects and urban development and for this purpose, the assessee raised funds by way of issue of bonds, debenture, deposits, loans in advan…

M/S. Housing and Urban Development Corporation Ltd (Hudco), New Delhi vs. DCIT, New Delhi

In the result, both the appeals filed by the Revenue are allowed for statistical purpose

ITA 4303/DEL/2009[2004-05]Status: DisposedITAT Delhi09 Feb 2016AY 2004-05

Bench: H.S. Sidhu & Sh. O.P. Kantsl. No.

Section 139(5)Section 143(1)Section 143(2)Section 14A

…rm loans etc., and therefore he held the expenses as capital in nature being for the purpose of extension of business of the assessee, in view of the judgment of the Hon’ble Supreme Court in the case of Brooke Bond India Vs. Commissioner of Income Tax, (1997) 225 ITR 798, and therefore not allowable. Before the learned Commissioner of Income Tax (Appeals), the assessee claimed that it was a non-banking financial institution engaged in providing long term finances for housing projects and urban development and for this purpose, the assessee raised funds by way of issue of bonds, debenture, deposits, loans in advan…

Addl.CIT, Range - 7, Kolkata vs. OSD Coke Pvt. Ltd., Kolkata

In the result, both the appeals of revenue are dismissed

ITA 1874/KOL/2008[2005-06]Status: DisposedITAT Kolkata03 Feb 2016AY 2005-06

Bench: Shri Mahavir Singh, Jm & Shri M. Balaganesh, Am]

For Appellant: Shri P. B. Pramanik, JCITFor Respondent: S/Shri J. P. Khaitan & J. M. Thard, Advocates
Section 143(3)Section 271(1)(c)Section 31Section 32Section 37(1)

…law as well as in facts by deleting the addition of Rs.15,000/- which was added u/s. 35D of the Act in view of the judgment held in the case of Punjab State Industrial Development Corporation Ltd. vs. CIT 225 ITR 792 (SC) and Brooke Bond (India) Ltd. Vs. CIT, 225 ITR 798 (SC).” 9. Brief facts relating to the above issue that the assessee claimed expenses of Rs.23,000/- towards amortization of share issue expenses written off. According to AO, these are not allowable in view of the decision of Hon’ble Supreme court in the case of Punjab State Industrial Dvelopment Corporation Ltd. Vs. CIT (1997) 225 ITR 792 (SC).…

ITO, Ward - 7(2), Kolkata vs. OSD Coke Pvt. Ltd., Kolkata

In the result, both the appeals of revenue are dismissed

ITA 1873/KOL/2008[2004-05]Status: DisposedITAT Kolkata03 Feb 2016AY 2004-05

Bench: Shri Mahavir Singh, Jm & Shri M. Balaganesh, Am]

For Appellant: Shri P. B. Pramanik, JCITFor Respondent: S/Shri J. P. Khaitan & J. M. Thard, Advocates
Section 143(3)Section 271(1)(c)Section 31Section 32Section 37(1)

…law as well as in facts by deleting the addition of Rs.15,000/- which was added u/s. 35D of the Act in view of the judgment held in the case of Punjab State Industrial Development Corporation Ltd. vs. CIT 225 ITR 792 (SC) and Brooke Bond (India) Ltd. Vs. CIT, 225 ITR 798 (SC).” 9. Brief facts relating to the above issue that the assessee claimed expenses of Rs.23,000/- towards amortization of share issue expenses written off. According to AO, these are not allowable in view of the decision of Hon’ble Supreme court in the case of Punjab State Industrial Dvelopment Corporation Ltd. Vs. CIT (1997) 225 ITR 792 (SC).…

DCIT, New Delhi vs. M/S Alcobex Metals Ltd., New Delhi

In the result, appeal filed by the revenue is dismissed

ITA 5344/DEL/2010[2003-04]Status: DisposedITAT Delhi12 Jan 2016AY 2003-04

Bench: Shri A.T.Varkey & Shri L.P. Sahu

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Shri K.K. Jaiswal, Senior DR
Section 10(2)(xv)

…ges paid for issue of debenture certificates. We notice that the Assessing Officer had made disallowance by relying upon the judgment of the Apex Court in the case of Punjab State Industrial Development Corporation 225 ITR 792 and M/s. Brook Bond India Ltd. 225 ITR 798 and CIT(A) on appeal, further allowed the claim of deduction and as such this appeal by the revenue. 10. The learned DR contended that the CIT(A) has failed to distinguish partly convertible debentures and fully convertible debentures furnished and therefore, any expenditure incurred considering the stamp duty charges for issue of debentures ar…

ACIT, Chennai vs. Thiru Arooran Sugars Limited, Chennai

In the result, the appeals of the assessee are partly

ITA 1559/CHNY/2015[2011-12]Status: DisposedITAT Chennai18 Dec 2015AY 2011-12

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…lso involved in production of spirits and cogeneration of power. The Assessing Officer has disallowed share issue expenses on the ground that share issue expenditure is capital expenditure and relied on the decisions of the Brooke Bond India Limited vs. CIT, 225 ITR 798 (SC) and Punjab State Industrial Corporation vs. CIT 225 ITR 792 (SC). The ld. Authorised Representative submitted that the share issue expenses are incurred in connection with the extension of its industrial undertaking in earlier years and the same to be allowed as Revenue expenditure or alternatively share issue expenditure to be treated as…

Thiru Arooran Sugars Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee are partly

ITA 1348/CHNY/2015[2005-06]Status: DisposedITAT Chennai18 Dec 2015AY 2005-06

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…lso involved in production of spirits and cogeneration of power. The Assessing Officer has disallowed share issue expenses on the ground that share issue expenditure is capital expenditure and relied on the decisions of the Brooke Bond India Limited vs. CIT, 225 ITR 798 (SC) and Punjab State Industrial Corporation vs. CIT 225 ITR 792 (SC). The ld. Authorised Representative submitted that the share issue expenses are incurred in connection with the extension of its industrial undertaking in earlier years and the same to be allowed as Revenue expenditure or alternatively share issue expenditure to be treated as…

Thiru Arooran Sugars Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee are partly

ITA 1347/CHNY/2015[2000-01]Status: DisposedITAT Chennai18 Dec 2015AY 2000-01

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…lso involved in production of spirits and cogeneration of power. The Assessing Officer has disallowed share issue expenses on the ground that share issue expenditure is capital expenditure and relied on the decisions of the Brooke Bond India Limited vs. CIT, 225 ITR 798 (SC) and Punjab State Industrial Corporation vs. CIT 225 ITR 792 (SC). The ld. Authorised Representative submitted that the share issue expenses are incurred in connection with the extension of its industrial undertaking in earlier years and the same to be allowed as Revenue expenditure or alternatively share issue expenditure to be treated as…

Thiru Arooran Sugars Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee are partly

ITA 1346/CHNY/2015[1999-00]Status: DisposedITAT Chennai18 Dec 2015AY 1999-00

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…lso involved in production of spirits and cogeneration of power. The Assessing Officer has disallowed share issue expenses on the ground that share issue expenditure is capital expenditure and relied on the decisions of the Brooke Bond India Limited vs. CIT, 225 ITR 798 (SC) and Punjab State Industrial Corporation vs. CIT 225 ITR 792 (SC). The ld. Authorised Representative submitted that the share issue expenses are incurred in connection with the extension of its industrial undertaking in earlier years and the same to be allowed as Revenue expenditure or alternatively share issue expenditure to be treated as…

Asst CIT 4(3), Mumbai vs. People Interactive (I) P.Ltd, Mumbai

ITA 6990/MUM/2013[2007-08]Status: DisposedITAT Mumbai21 Oct 2015AY 2007-08

Bench: Shri Shailendra Kumar Yadav & Shri Ramit Kochar

For Appellant: Sh. R. S.SamariaFor Respondent: Shri B S Bisht
Section 143(3)Section 147Section 148Section 151Section 37

…o increase in share capital of the company and hence are capital expenditure. The AO relied upon the decision of Hon’ble Supreme Court in M/s Punjab State Industrial Corporation Limited v. CIT (1997) 225 ITR 792(SC) and Brooke Bond India Limited v. CIT(1997) 225 ITR 798 (SC) and held these expenses as capital expenditure not allowable as revenue expenses , more so these are merely share premium foregone and no such actual expenditure is incurred by the assessee company .Thus, AO disallowed the ESOP expenditure of Rs.81,93,150/- and added the same to income of the assessee company in the orders dated 25th Oct…

Asst CIT 4(3), Mumbai vs. People Ineractive (I) P.Ltd, Mumbai

ITA 6986/MUM/2013[2008-09]Status: DisposedITAT Mumbai21 Oct 2015AY 2008-09

Bench: Shri Shailendra Kumar Yadav & Shri Ramit Kochar

For Appellant: Sh. R. S.SamariaFor Respondent: Shri B S Bisht
Section 143(3)Section 147Section 148Section 151Section 37

…o increase in share capital of the company and hence are capital expenditure. The AO relied upon the decision of Hon’ble Supreme Court in M/s Punjab State Industrial Corporation Limited v. CIT (1997) 225 ITR 792(SC) and Brooke Bond India Limited v. CIT(1997) 225 ITR 798 (SC) and held these expenses as capital expenditure not allowable as revenue expenses , more so these are merely share premium foregone and no such actual expenditure is incurred by the assessee company .Thus, AO disallowed the ESOP expenditure of Rs.81,93,150/- and added the same to income of the assessee company in the orders dated 25th Oct…

Inventurus Knowledge Services P.Ltd, Navi Mumbai vs. ITO 5(2)(1), Mumbai

In the result appeal of the assessee company is partly allowed

ITA 5922/MUM/2013[2009-10]Status: DisposedITAT Mumbai21 Oct 2015AY 2009-10

Bench: Shri Joginder Singh & Shri Ramit Kocharassessment Year: - 2009-10 Inventurus Knowledge Services V. Income Tax Officer Pvt. Ltd. 5(2)(1), C/O. Seren Properties Pvt. Ltd. 525, Aaykar Bhavan, (Sez), Unit No. 204, Build No. 5, M.K. Road, Mindspace Airoli Camp, Plot No. Mumbai - 400 020. 3, Gat No. 95, Kalwa Trans, Thane Creek, Midc Industrial Area, Thane Belapur Road, Airoli, Navi Mumbai – 400 708. Pan/Gir No. Aabck4601P

…Rs. Rs. 7,45,286/- and Stamp duty of Rs.2,59,000/- towards increase in authorized capital of the company , the CIT(A) rejected the contention of the assessee in view of the decision of Hon’ble Supreme Court in the case of Brooke Bond India Ltd. v. CIT (1997) 225 ITR 798 (SC), Punjab State Ind. Corp. Ltd. v. CIT (1997) 225 ITR 792 (SC) and CIT v.Kodak India Ltd. (2002) 253 ITR 445 (SC) and held the same expenditure to be capital in nature as the expenditure for expansion of capital retains the character of capital expenditure since it is directly related to the expansion of the capital base of the appellant. 5.…

People Interactive (I) P.Ltd, Mumbai vs. Asst CIT 4(3), Mumbai

ITA 4979/MUM/2013[2009-10]Status: DisposedITAT Mumbai21 Oct 2015AY 2009-10

Bench: Shri Shailendra Kumar Yadav & Shri Ramit Kochar

For Appellant: Sh. R. S.SamariaFor Respondent: Shri B S Bisht
Section 143(3)Section 147Section 148Section 151Section 37

…o increase in share capital of the company and hence are capital expenditure. The AO relied upon the decision of Hon’ble Supreme Court in M/s Punjab State Industrial Corporation Limited v. CIT (1997) 225 ITR 792(SC) and Brooke Bond India Limited v. CIT(1997) 225 ITR 798 (SC) and held these expenses as capital expenditure not allowable as revenue expenses , more so these are merely share premium foregone and no such actual expenditure is incurred by the assessee company .Thus, AO disallowed the ESOP expenditure of Rs.81,93,150/- and added the same to income of the assessee company in the orders dated 25th Oct…