CIT Assam v. The Panbari

57 ITR 422Supreme Court of India1965#2292 most cited

What is CIT Assam v. The Panbari authority for?

Expenditure incurred for acquiring a lease is capital expenditure if it brings into existence an asset or advantage for the enduring benefit of the business. The court distinguishes between 'premium' and 'rent' based on the parties' conscious choice of terms.

50

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2012 to 2025.

Also referred to as

CIT vs. The Panbari Tea Company Limited · 57 ITR 422 · capital expenditure · lease acquisition · enduring benefit · business asset · premium · rent · lease · Supreme Court · India

Sections most often in play

Section 143(3)Section 201(1A)Section 234BSection 234CSection 234DSection 271(1)(c)Section 40(a)(ia)Section 80IA(4)

Issues it is cited on

section 80iasection 80irevenue expendituresection 80transferprevious yearcompanyindiabusinesspersonsection 14section 143(3)

Judgments citing CIT Assam v. The Panbari

A.C.I.T. 10(1), Mumbai vs. Asian Heart Institute & Research Center Pvt. Ltd., Mumbai

In the result, the appeal filed by the assessee is treated as partly allowed and the appeal of the revenue is dismissed

ITA 2257/MUM/2012[2008-09]Status: DisposedITAT Mumbai02 Mar 2016AY 2008-09

Bench: Shri B.R. Baskaran (Am) & Shri Amarjit Singh (Jm)

For Appellant: Shri Vimal PunmiyaFor Respondent: Shri Manoj Kumar
Section 14A

…issue was considered by Hon’ble Delhi High Court in the case of Gail India Ltd Vs. JCIT (ITA 956/2011 and 957/2011 dated 05-11-2012) and the Hon’ble Delhi, by following the decision rendered by Hon’ble Supreme Court in the case of Panbari Tea Corporation Ltd (57 ITR 422)(SC), has held that the assessee is not entitled to claim amortisation of proportionate amount of lease premium paid for taking the land on lease for a longer period. In view 3 Asian Heart Institute & Research Centre Pvt. Ltd. ITA Nos. 2865 & 2257/Mum/2012 of the above, we do not find any infirmity in the order of Ld CIT(A) on this issue. 7. Th…

ITO 18(2)(1), Mumbai vs. Dr . Vasant J Rath Trust, Mumbai

In the result, the Revenue’s appeal for assessment year 2005-06

ITA 844/MUM/2014[2005-06]Status: DisposedITAT Mumbai29 Feb 2016AY 2005-06

Bench: Shri Jason P. Boaz & Shri Sandeep Gosainthe Income Tax Officer 18(2)(1), Room No.110, Piramal Chambers, Lalbaug Parel, Mumbai 400 012 ... Appellant

For Appellant: Shri Madhur Agarwal &For Respondent: Shri Vikash Kumar Agarwal
Section 143(3)Section 147Section 148

…he Ld. Representative for the assessee contends that in view of the above finding of fact, the CIT(Appeals) following the ratio of the decisions of the Hon’ble Apex Court in the case of Parbari Tea Co. Ltd. C.O. 76/Mum/2015 (Assessment Year : 2005-06) (1965) 57 ITR 422(SC) of the Hon’ble Bombay High Court in the case of Ratilal Tarachand Mehta(1977) 110 ITR 71(Bom); of the Co-ordinate Bench of the ITAT Mumbai in the case of Wadhwa Associates & Realtors Pvt. Ltd.(ITA No.695/Mum/2012) held that the premium of Rs.51.00 lakhs received by the assessee trust for grant of tenancy rights to the six tenants is transfer o…

ITO (TDS) 2(5), Mumbai vs. Oriental Bank of Commerce, Mumbai

The appeals of the Revenue are dismissed

ITA 1300/MUM/2014[2010-11]Status: DisposedITAT Mumbai23 Nov 2015AY 2010-11

Bench: Shri Joginder Singh & Shri Jason P. Boaz

Section 194

…le u/ s.194-I. Further in the following cases lease premium received has been held as a capital receipt and not in the nature of advance rent.” 1. Decision of Supreme Court in the case of Commissioner of Income- tax V/s Panbari Tea Co. Ltd. OF INDIA (1965) 57 ITR 422 (SC) Section 4 of the Income-tax Act, 1961 [Corresponding to section 3 of the Indian Income-tax Act, 1922J - Income - Chargeable as - Assessment year 1952-53- Assessee company leased out tea estates along with machinery and buildings and received premium -ITO made assessment treating premium as a revenue receipt - Whether since, there was a transf…

ITO (TDS) 2(3), Mumbai vs. Milenium Associates, Navi Mumbai

The appeals of the Revenue are dismissed

ITA 3172/MUM/2014[2010-11]Status: DisposedITAT Mumbai06 Nov 2015AY 2010-11

Bench: Shri Joginder Singh & Shri Rajesh Kumarassessment Year: 2010-11

Section 133ASection 194Section 201Section 201(1)

…ITA NO.695/Mum/2012 and Shree Naman Developers Ltd. ITA NO.686 & 687/Mum/2012 and M/s Shah Group Builders Ltd. I.T.A. NO.4523/Mum/2012. 5. I have gone through the same and find that same are in favour of appellant. Also in the case of Panbari Tea Company Ltd. 57 ITR 422 (SC) Hon’ble Supreme Court decided that the lease premium is paid is a capital receipt and not revenue in nature. In view of this I am convinced that appellant was not liable to deduct tax on the payment of lease premium made to CIDCO and hence and not be held as an assessee in default. Consequently action of Assessing Officer to levy tax u/s 201…

Gail India Ltd

ITA - 957 / 2011HC Delhi05 Nov 2012
Section 30Section 37

…id at the commencement of the lease was the advance rent that could be amortized. At the same time, there are other rulings by the Supreme Court in (Assam Bengal Cement Company Limited Vs. CIT (1955) 27 ITR 34, CIT Vs. Panbari Tea Company Limited (1965) 57 ITR 422 and Durga Madira Sangh Vs. Commissioner of Income Tax (1969) 72 ITR 769. In all these cases, the Court upheld the Revenue’s contention and stated that the expenditure towards acquisition of lease amounted to “brining into existence an asset or advantage for enduring benefit of the business” and was properly attributable by way of capital…

Gail India Ltd

ITA - 956 / 2011HC Delhi05 Nov 2012
Section 30Section 37

…id at the commencement of the lease was the advance rent that could be amortized. At the same time, there are other rulings by the Supreme Court in (Assam Bengal Cement Company Limited Vs. CIT (1955) 27 ITR 34, CIT Vs. Panbari Tea Company Limited (1965) 57 ITR 422 and Durga Madira Sangh Vs. Commissioner of Income Tax (1969) 72 ITR 769. In all these cases, the Court upheld the Revenue’s contention and stated that the expenditure towards acquisition of lease amounted to “brining into existence an asset or advantage for enduring benefit of the business” and was properly attributable by way of capital…

M/S. Gail India Limited vs. The Joint Commissioner of Income Tax

ITA/957/2011HC Delhi05 Nov 2012
Section 30Section 37

…id at the commencement of the lease was the advance rent that could be amortized. At the same time, there are other rulings by the Supreme Court in (Assam Bengal Cement Company Limited Vs. CIT (1955) 27 ITR 34, CIT Vs. Panbari Tea Company Limited (1965) 57 ITR 422 and Durga Madira Sangh Vs. Commissioner of Income Tax (1969) 72 ITR 769. In all these cases, the Court upheld the Revenue’s contention and stated that the expenditure towards acquisition of lease amounted to “brining into existence an asset or advantage for enduring benefit of the business” and was properly attributable by way of capital…

M/S. Gail India Limited vs. The Joint Commissioner of Income Tax

ITA/956/2011HC Delhi05 Nov 2012
Section 30Section 37

…id at the commencement of the lease was the advance rent that could be amortized. At the same time, there are other rulings by the Supreme Court in (Assam Bengal Cement Company Limited Vs. CIT (1955) 27 ITR 34, CIT Vs. Panbari Tea Company Limited (1965) 57 ITR 422 and Durga Madira Sangh Vs. Commissioner of Income Tax (1969) 72 ITR 769. In all these cases, the Court upheld the Revenue’s contention and stated that the expenditure towards acquisition of lease amounted to “brining into existence an asset or advantage for enduring benefit of the business” and was properly attributable by way of capital…

Krishak Bharati Cooperative Ltd vs. Deputy CIT

The appeals are dismissed, with no order as to costs

ITA - 205 / 2010HC Delhi12 Jul 2012
Section 143Section 269U

…t is made not for the purpose of bringing into existence any such asset (or) advantage but for running the business or working it with a view to produce the profits it is a revenue expenditure.” In Commissioner of Income Tax v. Panbari Tea Co. Ltd. (1965) 57 ITR 422 (SC), the Supreme Court had occasion to consider precisely a question of the kind sought to be urged in this case. The assesse had acquired, by a registered lease deed two tea estates with machinery and buildings for a period of 10 years. The lease was executed in consideration of a sum of `. 2,25,000 as and by way of premium and an annual r…

Krishak Bharati Cooperative Ltd vs. Deputy CIT

The appeals are dismissed, with no order as to costs

ITA/205/2010HC Delhi12 Jul 2012
Section 143Section 269U

…t is made not for the purpose of bringing into existence any such asset (or) advantage but for running the business or working it with a view to produce the profits it is a revenue expenditure.” In Commissioner of Income Tax v. Panbari Tea Co. Ltd. (1965) 57 ITR 422 (SC), the Supreme Court had occasion to consider precisely a question of the kind sought to be urged in this case. The assesse had acquired, by a registered lease deed two tea estates with machinery and buildings for a period of 10 years. The lease was executed in consideration of a sum of `. 2,25,000 as and by way of premium and an annual r…