CIT 126 Taxman 544 (Bom) Dalmia Jain & Co. vs. CIT (1971) 81 ITR 754 (SC) Avery India Ltd. v. CIT

86 ITR 38Supreme Court of India1972#7516 most cited

What is CIT 126 Taxman 544 (Bom) Dalmia Jain & Co. vs. CIT (1971) 81 ITR 754 (SC) Avery India Ltd. v. CIT authority for?

The distinction between capital and revenue expenditure is a thin one and must be decided on a case-to-case basis by applying the relevant yardsticks to the facts.

15

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2015 to 2025.

Also referred to as

M.K. Bros. Pvt. Ltd. vs. CIT · 86 ITR 38 (SC) · capital expenditure · revenue expenditure · enduring benefit · profits and gains of business or profession · section 37(1) · section 32 · section 35

Sections most often in play

Section 1961Section 143(3)Section 147Section 112Section 132Section 143(2)Section 144Section 148

Issues it is cited on

section 35abbtest of enduring benefitenduring benefitsection 92bsection 32(1)section 35revenue expenditurecapital expenditureprofits and gains of business or professionsection 32section 37(1)section 92

Judgments citing CIT 126 Taxman 544 (Bom) Dalmia Jain & Co. vs. CIT (1971) 81 ITR 754 (SC) Avery India Ltd. v. CIT

V Ramakrishnan, Chennai vs. DCIT Central Circle III(4), Chennai

In the result, the appeal for the A

ITA 744/CHNY/2005[2000-01]Status: DisposedITAT Chennai26 Dec 2025AY 2000-01

Bench: Shri Manu Kumar Giri & Shri S. R. Raghunatha

For Appellant: Shri. N. Arjun Raj, AdvocateFor Respondent: Shri. Bipin. C.N., C.I.T
Section 132Section 148Section 15Section 158BSection 17(1)(iv)

…t follow: :-8-: IT(SS)A Nos. 153 & 162/Chny/2003 & ITA. Nos:744 & 2197/Chny/2005 CIT, Bombay v. Sitaldas Tirathdas (1961) 41 ITR 367 (SC) CIT, W.B. v. Imperial Chemical Industries Pvt. Ltd. (1969) 74 ITR 17 (SC) M.K. Brother Pvt. Ltd. v. CIT, Kanpur (1972) 86 ITR 38 (SC) Addl. CIT v. Rani Preetam Kunwar (1980) 125 ITR 102 (All) Tuticorin Alikali Chemicals & Fertilizers Ltd. 227 ITR 172 (SC) As already observed, M/s PPL was liable to pay interest on the loans taken from various financial institutions. The Appellant in the capacity of Managing Director was under no legal obligation to discharge the liabilities o…

V Ramakrishnan, Chennai vs. DCIT Central Circle III(4), Chennai

In the result, the appeal for the A

ITA 2197/CHNY/2005[1999-2000]Status: DisposedITAT Chennai26 Dec 2025AY 1999-2000

Bench: Shri Manu Kumar Giri & Shri S. R. Raghunatha

For Appellant: Shri. N. Arjun Raj, AdvocateFor Respondent: Shri. Bipin. C.N., C.I.T
Section 132Section 148Section 15Section 158BSection 17(1)(iv)

…t follow: :-8-: IT(SS)A Nos. 153 & 162/Chny/2003 & ITA. Nos:744 & 2197/Chny/2005 CIT, Bombay v. Sitaldas Tirathdas (1961) 41 ITR 367 (SC) CIT, W.B. v. Imperial Chemical Industries Pvt. Ltd. (1969) 74 ITR 17 (SC) M.K. Brother Pvt. Ltd. v. CIT, Kanpur (1972) 86 ITR 38 (SC) Addl. CIT v. Rani Preetam Kunwar (1980) 125 ITR 102 (All) Tuticorin Alikali Chemicals & Fertilizers Ltd. 227 ITR 172 (SC) As already observed, M/s PPL was liable to pay interest on the loans taken from various financial institutions. The Appellant in the capacity of Managing Director was under no legal obligation to discharge the liabilities o…

ACIT Circle-17(1), New Delhi vs. Metronation Chennai Television Ltd., New Delhi

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 7181/DEL/2019[2016-17]Status: DisposedITAT Delhi21 Aug 2024AY 2016-17

Bench: SHRI S.RIFAUR RAHMAN (Accountant Member), MS. MADHUMITA ROY (Judicial Member)

Section 143(1)Section 143(3)Section 144CSection 32(1)Section 37(1)Section 92B

…capital or revenue- Assam Bengal Cement Co. Ltd vs. CIT 27 ITR 34 (SC) Taparia Tools Ltd. vs. Jt. CIT 126 Taxman 544 (Bom) Dalmia Jain & Co. vs. CIT (1971) 81 ITR 754 (SC) Avery India Ltd. vs. CIT (1993) 199 ITR 754 (Cal) M.K. Bros. Pvt. Ltd. vs. CIT (1972) 86 ITR 38 (SC) Travancore Sugar and Chemicals Ltd. vs. CIT (1966) 62 ITR 566 (SC) F. Woodrofe and Co.Ltd. vs. CIT (1976) 102 ITR 0665 (Madras) CIT vs. J.K. Synthetics Ltd. (2009) 309 ITR 0371 (Delhi) From the aforementioned judicial precedents, one thing becomes clear the dividing line between capital expenditure and revenue expenditure is thin and the decis…

DCIT, Circle-16(2), New Delhi vs. Metronation Chennai Television Ltd., New Delhi

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 2536/DEL/2018[2014-15]Status: DisposedITAT Delhi21 Aug 2024AY 2014-15

Bench: SHRI S.RIFAUR RAHMAN (Accountant Member), MS. MADHUMITA ROY (Judicial Member)

Section 143(1)Section 143(3)Section 144CSection 32(1)Section 37(1)Section 92B

…capital or revenue- Assam Bengal Cement Co. Ltd vs. CIT 27 ITR 34 (SC) Taparia Tools Ltd. vs. Jt. CIT 126 Taxman 544 (Bom) Dalmia Jain & Co. vs. CIT (1971) 81 ITR 754 (SC) Avery India Ltd. vs. CIT (1993) 199 ITR 754 (Cal) M.K. Bros. Pvt. Ltd. vs. CIT (1972) 86 ITR 38 (SC) Travancore Sugar and Chemicals Ltd. vs. CIT (1966) 62 ITR 566 (SC) F. Woodrofe and Co.Ltd. vs. CIT (1976) 102 ITR 0665 (Madras) CIT vs. J.K. Synthetics Ltd. (2009) 309 ITR 0371 (Delhi) From the aforementioned judicial precedents, one thing becomes clear the dividing line between capital expenditure and revenue expenditure is thin and the decis…

DCIT, Circle-16(2), New Delhi vs. Metronation Chennai Television Ltd., New Delhi

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 2280/DEL/2018[2013-14]Status: DisposedITAT Delhi21 Aug 2024AY 2013-14

Bench: SHRI S.RIFAUR RAHMAN (Accountant Member), MS. MADHUMITA ROY (Judicial Member)

Section 143(1)Section 143(3)Section 144CSection 32(1)Section 37(1)Section 92B

…capital or revenue- Assam Bengal Cement Co. Ltd vs. CIT 27 ITR 34 (SC) Taparia Tools Ltd. vs. Jt. CIT 126 Taxman 544 (Bom) Dalmia Jain & Co. vs. CIT (1971) 81 ITR 754 (SC) Avery India Ltd. vs. CIT (1993) 199 ITR 754 (Cal) M.K. Bros. Pvt. Ltd. vs. CIT (1972) 86 ITR 38 (SC) Travancore Sugar and Chemicals Ltd. vs. CIT (1966) 62 ITR 566 (SC) F. Woodrofe and Co.Ltd. vs. CIT (1976) 102 ITR 0665 (Madras) CIT vs. J.K. Synthetics Ltd. (2009) 309 ITR 0371 (Delhi) From the aforementioned judicial precedents, one thing becomes clear the dividing line between capital expenditure and revenue expenditure is thin and the decis…

DCIT, New Delhi vs. M/S. Metronation Chennai Television Ltd., New Delhi

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 3358/DEL/2017[2012-13]Status: DisposedITAT Delhi21 Aug 2024AY 2012-13

Bench: SHRI S.RIFAUR RAHMAN (Accountant Member), MS. MADHUMITA ROY (Judicial Member)

Section 143(1)Section 143(3)Section 144CSection 32(1)Section 37(1)Section 92B

…capital or revenue- Assam Bengal Cement Co. Ltd vs. CIT 27 ITR 34 (SC) Taparia Tools Ltd. vs. Jt. CIT 126 Taxman 544 (Bom) Dalmia Jain & Co. vs. CIT (1971) 81 ITR 754 (SC) Avery India Ltd. vs. CIT (1993) 199 ITR 754 (Cal) M.K. Bros. Pvt. Ltd. vs. CIT (1972) 86 ITR 38 (SC) Travancore Sugar and Chemicals Ltd. vs. CIT (1966) 62 ITR 566 (SC) F. Woodrofe and Co.Ltd. vs. CIT (1976) 102 ITR 0665 (Madras) CIT vs. J.K. Synthetics Ltd. (2009) 309 ITR 0371 (Delhi) From the aforementioned judicial precedents, one thing becomes clear the dividing line between capital expenditure and revenue expenditure is thin and the decis…

ACIT, Circle 22(2), New Delhi vs. Snapdeal Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 184/DEL/2023[2017-18]Status: DisposedITAT Delhi26 Apr 2024AY 2017-18

Bench: Shri G.S. Pannu, Hon’Ble & Ms. Astha Chandraasstt. Year: 2017-18

For Appellant: Shri Salil Kapoor, AdvocateFor Respondent: Shri Dharamvir Singh, CIT-DR

…the following decisions:- (i) Assam Bengal Cement Company Ltd. vs. CIT 27 ITR 34 (SC) (ii) Taparia Tools Ltd. vs. JCIT 126 Taxman 544 (Bom) (iii) Dalmia Jain & Co. 81 ITR 754 (SC) (iv) Avery India Ltd. vs. CIT 199 ITR 745 (Cal) (v) M.K. Bros Pvt. Ltd. vs. CIT 86 ITR 38 (SC) & Travancore Sugar and Chemical Ltd. vs. CIT 62 ITR 566 (SC) (vi) D.F. Woodrofe and Company Ltd. vs. CIT 102 ITR 665 (Mad) (vii) CIT vs. J.K. Synthetic Ltd. 309 ITR 371 (Del) 8. The Ld. AO considered 50% of the expenditure claimed as capital in nature. This resulted in disallowance of Rs. 322,39,50,102/-. The total loss 4 was thus determined…

DCIT 7(3), Mumbai vs. Wyeth Ltd ( Formerly Known As Wyeth Lederle Ltd), Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 3508/MUM/2010[2004-05]Status: DisposedITAT Mumbai09 Jun 2023AY 2004-05

Bench: Shri Vikas Awasthy, Hon’Ble & Shri S. Rifaur Rahman, Hon'Blepfizer Limited V. Acit- Special Range 23 (Earlier Known As Wyeth Lederle Limited) [Now The Dcit-Circle 7(3)] The Capital, G-Block Aayakar Bhavan Bandra Kurla Complex Mumbai- 400020 Bandra (E), Mumbai -400012 Pan: Aaacp3334M (Appellant) (Respondent) Acit- Ltu V. M/S. Wyeth Limited 28Th Floor, Centre - 1 (Formerly Known As Wyeth Lederle Ltd) Rbc Mahindra Towers World Trade Centre 4Th Floor, A- Wing Cuffe Parade, Mumbai Dr G.M. Bhosale Road Worli, Mumbai- 400055 Pan: Aaacw2641Q (Appellant) (Respondent) Assessee Represented By : Shri Vishal Kalra Department Represented By : Smt. Sujatha Iyangar

Section 43(6)Section 80H

…: vi. DCIT vs Sun Pharmaceuticals Industries Ltd: 329 ITR 479 (Guj) Cases wherein It is held that it is the real nature and quality of the payment and not the quantum or the manner of the payment which would prove decisive i. M.K. Bros. (P) Ltd. vs CIT [1972] 86 ITR 38 (SC) ii. Travancore Sugars & Chemicals Ltd. vs Page No. 18 ITA NO. 3508/MUM/2010 (A.Y: 2004-05) M/s. Wyeth Limited iii. CIT [1966] 62 ITR 566 (SC) iv. CIT v. Madras Auto Services (P.) Ltd. 233 ITR 468 (SC) v. Empire Jute Co. Ltd. v. CIT 124 ITR 1 (SC) vi. Assam Bengal Cement Co. Ltd. Vs. Commissioner of ITC (27 ITR 34) (SC) vii. CIT vs B.N. Elias &…

Kadavanthara Builders Pvt Ltd, Chennai vs. ITO, Ward -4(2), Chennai

The appeal of the assessee is partly allowed for statistical purposes

ITA 2485/CHNY/2019[2015-16]Status: DisposedITAT Bangalore12 May 2023AY 2015-16
Section 143(3)

…oney paid is a revenue expenditure or capital expenditure depends upon the purpose for which the payment has been made and expenditure has been incurred. In this regard, the assessee relied on the following judgments. i. MK Bross (P) Ltd. Vs. CIT reported in 86 ITR 38 (SC) ii. CIT Vs. BN Elias & Co. (P) Ltd. reported in 168 ITR 190 (Cal) iii. Gamon Norton Metal Diamond Dies Ltd. Vs. CIT reported in 163 ITR 606 (Bom) 16. He further submitted that the interest received by the assessee on deposits is income from business, the funds were kept for the business purpose. The AO & CIT (A) have wrongly held that it is in…

Kadavanthara Builders Pvt Ltd, Chennai vs. ITO, Ward -4(2), Chennai

The appeal of the assessee is partly allowed for statistical purposes

ITA 2484/CHNY/2019[2014-15]Status: DisposedITAT Bangalore12 May 2023AY 2014-15
Section 143(3)

…oney paid is a revenue expenditure or capital expenditure depends upon the purpose for which the payment has been made and expenditure has been incurred. In this regard, the assessee relied on the following judgments. i. MK Bross (P) Ltd. Vs. CIT reported in 86 ITR 38 (SC) ii. CIT Vs. BN Elias & Co. (P) Ltd. reported in 168 ITR 190 (Cal) iii. Gamon Norton Metal Diamond Dies Ltd. Vs. CIT reported in 163 ITR 606 (Bom) 16. He further submitted that the interest received by the assessee on deposits is income from business, the funds were kept for the business purpose. The AO & CIT (A) have wrongly held that it is in…

Hitachi Metglas (India) Pvt. Ltd., New Delhi vs. DCIT, Circle- 11(2), New Delhi

In the result, the appeal filed by the assessee in ITA No

ITA 5906/DEL/2017[2010-11]Status: DisposedITAT Delhi11 Nov 2021AY 2010-11

Bench: Shri N.K. Billaiya & Shri Kuldip Singh[A.Y 2010-11]

For Appellant: Shri Saleel Kapoor, AdvFor Respondent: Shri Pradeep Kumar Meel, CIT- DR

…) · • K.T.M.T.M. Abdul Kayoom v. CIT: 44 ITR 689 (SC) · • Assam Bengal Cement Co. Ltd. v. CIT: 27 ITR 34 (SC) · • L.H. Sugar Factory & Oil Mills P. Ltd. v. CIT: 125 ITR 293 (SC) · Dalmia Jain & Co. Ltd. v. CIT: 81 ITR 754 (SC) · • M.K. Bros. (P.) Ltd. v. CIT: 86 ITR 38 (SC) · • Travancore Sugars & Chemicals Ltd. v. CIT: 62 ITR 566 (SC) · • CIT v. B.N. Elias & Co. (P.) Ltd.: 168 ITR 190 (Cal.) · • CIT v. Hindustan General Electric Corpn. Ltd.: 81 ITR 243 (Cal.) · Gannon Norton Metal Diamond Dies Ltd. v. CIT: 163 ITR 606 (Bom.) · CIT v. Mehta Transport Co.: 160 ITR 35 (Guj.) · • Saraswati Industrial Syndicate Ltd.…

DCIT 13(2)(2), Mumbai vs. Sharda Worldwide Exports P. Ltd, Mumbai

ITA 3804/MUM/2016[2011-12]Status: DisposedITAT Mumbai16 Mar 2018AY 2011-12
For Appellant: S/Shri Kunal Beswal/Anuj KishnadwalaFor Respondent: Ms. S. Padmaja -DR
Section 254(1)

…rent Pharmaceuticals Ltd (supra) USV Ltd (supra) 4 3804, 3805/M/16;C.O.115/16-Sharda Worldwide Exports P.Ltd. and Cadila Healthcare Ltd (supra), Essar Oil Ltd (Income Tax Appeal 921 of 2006), Aarti Drugs Ltd. (ITA/5526/Mumbai/2011), MK Brothers Private Ltd (86 ITR 38) Tata Engineering and Locomotive Co Ltd. (201 ITR 1036). 5.We have heard the rival submissions and perused the material before us.We find assessee was exporting agrochemicals and pesticides,that it had to obtain the permission/grants from the countries of export,that it would make payment to the parties who had made research about generic products…

Addl CIT 2(1), Mumbai vs. Gtl Ltd, Mumbai

ITA 5419/MUM/2010[2006-07]Status: DisposedITAT Mumbai31 May 2017AY 2006-07

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwal

Section 10BSection 143(1)

…3 32 M/s GTL Ltd. ITA Nos.5245 & 5419/Mum/2010 (SC). It was argued that merely the quantum and periodicity of the expenditure is not a relevant factor to decide the nature of expenditure for which reliance was placed in M.K. Brothers (P.) Ltd. vs CIT (1972) 86 ITR 38 (SC) and Travancore Sugar & Chemicals Ltd. vs CIT (1966) 62 ITR 566 (SC). It was explained that valuation of entries is a regular practice and the assessee is in earlier and subsequent years, written off inventories, which were allowed. Admittedly, the assessee provided the complete details of inventories, written off, which were not mentioned in t…

M/S. Honda Siel Power Products Ltd., Gautam Budh Nagar vs. DCIT, New Delhi

In the result, both the appeals of the assessee-company are partly allowed for statistical purposes

ITA 551/DEL/2014[2009-10]Status: DisposedITAT Delhi13 Apr 2016AY 2009-10

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

For Appellant: S/Sh. Neeraj Jain, AdvFor Respondent: Sh. Armendra Kumar, CIT/ DR
Section 143(3)Section 144CSection 2Section 92B

…49 (Mad.) • K.T.M.T.M. Abdul Kayoom v. CIT: 44 ITR 689 (SC) • Assam Bengal Cement Co. Ltd. v. CIT: 27 ITR 34 (SC) • L.H. Sugar Factory & Oil Mills P. Ltd. v. CIT: 125 ITR 293 (SC) • Dalmia Jain & Co. Ltd. v. CIT: 81 ITR 754 (SC) • M.K. Bros. (P.) Ltd. v. CIT: 86 ITR 38 (SC) • Travancore Sugars & Chemicals Ltd. v. CIT: 62 ITR 566 (SC) • CIT v. B.N. Elias & Co. (P.) Ltd.: 168 ITR 190 (Cal.) • CIT v. Hindustan General Electric Corpn. Ltd.: 81 ITR 243 (Cal.) • Gannon Norton Metal Diamond Dies Ltd. v. CIT: 163 ITR 606 (Bom.) • CIT v. Mehta Transport Co.: 160 ITR 35 (Guj.) • Saraswati Industrial Syndicate Ltd. v. CIT:…

Asst CIT 7(2), Mumbai vs. Rpg Life Science Ltd (Earlier Known As Summit Securities Ltd), Mumbai

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

ITA 6714/MUM/2012[1999-00]Status: DisposedITAT Mumbai24 Nov 2015AY 1999-00

Bench: S/Shri B.R.Baskaran, Am & Amarjit Singh, Jm आमकय अऩीर सं./I.T.A. No.6714/Mum/2012 (ननधधायण वषा / Assessment Year: 1999-2000) बनाम/ Dy. Commissioner Of Income M/S R P G Life Sciences Ltd (Earlier Known As Summit Tax 7(2), Vs. Securities Ltd.), Room No.624, 6Th Floor, Ceat Mahal, 463, Aayakar Bhavan, Dr.Annie Besant Road, M K Road, Worli, Mumbai-400020 Mumbai-400025 (अऩीरधथी /Appellant) (प्रत्मथी / Respondent) ..

Section 148Section 271(1)(c)

…he case of Essel Propack Ltd (supra). Before us, the assessee also placed reliance on the decisions rendered by Hon’ble Supreme Court in the case of Alembic Chemical works Co. Ltd (177 ITR 377); Assam Bengal Cement Vs. CIT (27 ITR 34 @ 46), M.K. Bros Vs. CIT (86 ITR 38). Thus, we notice that the assessee has made a claim on the basis of certain judicial pronouncements and the same was not acceptable to the AO. Thus, the impugned issue becomes debatable issue. Accordingly, we are of the view that, merely because the claim of the assessee was not acceptable to the tax authorities, the disallowance made on that basi…

CIT 126 Taxman 544 (Bom) Dalmia Jain & Co. vs. CIT (1971) 81 ITR 754 (SC) Avery India Ltd. v. CIT (86 ITR 38) — Cited in 15 Judgments | BharatTax