CIT v. Alchemic (P) Ltd.

130 ITR 168High Court1981#3156 most cited

What is CIT v. Alchemic (P) Ltd. authority for?

Debt forgiveness constituting a monetary benefit does not attract Section 28(iv) of the Income Tax Act. Such a benefit is not income arising from business or profession.

37

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2009 to 2025.

Also referred to as

CIT v. Alchemic (P) Ltd. · 130 ITR 168 · Section 28(iv) · debt forgiveness · monetary benefit · business income · income from profession

Sections most often in play

Section 132Section 139(1)Section 143(2)Section 147Section 153ASection 28(i)Section 28(iv)Section 36(1)(iii)

Issues it is cited on

section 2(13)waiver of loansection 28(i)section 28(iv)non-compete feesection 43(1)commercial rightsright to receivefull value of considerationsection 41(1)lack of enquirysection 41

Judgments citing CIT v. Alchemic (P) Ltd.

Interglobe Aviation Ltd., New Delhi vs. Addl. CIT, Special Range- 4, New Delhi

Accordingly, appeal filed by the assessee for assessment year 2015 – 16 is allowed

ITA 433/DEL/2018[2014-15]Status: DisposedITAT Delhi29 Oct 2021AY 2014-15

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Tarandeep Singh, Adv.; &For Respondent: Ms. Sunita Singh [CIT] – D.R
Section 28Section 37(1)Section 40

…come which can be taxed under s. 28(iv) must not only be referable to a benefit or perquisite, but it must be arising from business. Secondly, s. 28(iv) does not apply to benefits in cash or money [see CIT vs. Alchemic (P) Ltd. (1981) 20 CTR (Guj) 83 : (1981) 130 ITR 168 (Guj)] ….." (ii) Benefit or perquisite must be one arising in the course of business.” 36.6. Moreover, we find, the credits received by the Assessee from IAE, in the present case, are in the form of money. The Supreme Court in the case of Mafatlal Gangabhai & Co. Pvt. Ltd., reported in 219 ITR 644 (SC) and the Hon’ble Delhi High Court in the cas…

Interglobe Aviation Ltd., New Delhi vs. Addl. CIT, Special Range- 4, New Delhi

Accordingly, appeal filed by the assessee for assessment year 2015 – 16 is allowed

ITA 432/DEL/2018[2013-14]Status: DisposedITAT Delhi29 Oct 2021AY 2013-14

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Tarandeep Singh, Adv.; &For Respondent: Ms. Sunita Singh [CIT] – D.R
Section 28Section 37(1)Section 40

…come which can be taxed under s. 28(iv) must not only be referable to a benefit or perquisite, but it must be arising from business. Secondly, s. 28(iv) does not apply to benefits in cash or money [see CIT vs. Alchemic (P) Ltd. (1981) 20 CTR (Guj) 83 : (1981) 130 ITR 168 (Guj)] ….." (ii) Benefit or perquisite must be one arising in the course of business.” 36.6. Moreover, we find, the credits received by the Assessee from IAE, in the present case, are in the form of money. The Supreme Court in the case of Mafatlal Gangabhai & Co. Pvt. Ltd., reported in 219 ITR 644 (SC) and the Hon’ble Delhi High Court in the cas…

Addl. CIT, Special Range- 4, New Delhi vs. Interglobe Aviation Ltd., New Delhi

Accordingly, appeal filed by the assessee for assessment year 2015 – 16 is allowed

ITA 413/DEL/2018[2014-15]Status: DisposedITAT Delhi29 Oct 2021AY 2014-15

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Tarandeep Singh, Adv.; &For Respondent: Ms. Sunita Singh [CIT] – D.R
Section 28Section 37(1)Section 40

…come which can be taxed under s. 28(iv) must not only be referable to a benefit or perquisite, but it must be arising from business. Secondly, s. 28(iv) does not apply to benefits in cash or money [see CIT vs. Alchemic (P) Ltd. (1981) 20 CTR (Guj) 83 : (1981) 130 ITR 168 (Guj)] ….." (ii) Benefit or perquisite must be one arising in the course of business.” 36.6. Moreover, we find, the credits received by the Assessee from IAE, in the present case, are in the form of money. The Supreme Court in the case of Mafatlal Gangabhai & Co. Pvt. Ltd., reported in 219 ITR 644 (SC) and the Hon’ble Delhi High Court in the cas…

Addl. CIT, Special Range- 4, New Delhi vs. Interglobe Aviation Ltd., New Delhi

Accordingly, appeal filed by the assessee for assessment year 2015 – 16 is allowed

ITA 412/DEL/2018[2013-14]Status: DisposedITAT Delhi29 Oct 2021AY 2013-14

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Tarandeep Singh, Adv.; &For Respondent: Ms. Sunita Singh [CIT] – D.R
Section 28Section 37(1)Section 40

…come which can be taxed under s. 28(iv) must not only be referable to a benefit or perquisite, but it must be arising from business. Secondly, s. 28(iv) does not apply to benefits in cash or money [see CIT vs. Alchemic (P) Ltd. (1981) 20 CTR (Guj) 83 : (1981) 130 ITR 168 (Guj)] ….." (ii) Benefit or perquisite must be one arising in the course of business.” 36.6. Moreover, we find, the credits received by the Assessee from IAE, in the present case, are in the form of money. The Supreme Court in the case of Mafatlal Gangabhai & Co. Pvt. Ltd., reported in 219 ITR 644 (SC) and the Hon’ble Delhi High Court in the cas…

The Commissioner of Income Tax vs. M/S. Abb Ltd

In the result, appeal stands dismissed

ITA/568/2015HC Karnataka04 Oct 2021

Bench: S.SUJATHA,RAVI V HOSMANI

Section 143Section 2(24)Section 220Section 220(2)Section 254Section 260Section 260ASection 45

…the case of Mahindra & Mahindra Ltd., V/s. CIT [261 ITR 501 (Bom)] wherein it is held that Section 28[iv] does not apply to benefits in cash or money, referring to the judgment of the Hon’ble High Court of Gujarat in CIT V/s. Alchemic Pvt. Ltd., [(1981) 130 ITR 168 (Guj)]. - 23 - 19. The non-computation fee was in fact a payment for sharing customer database and sharing of trained employees. The receipt towards the said transfer is not attributable to transfer of any assets or right and the mere fact that the receipt is not attributable to non- compete covenant, it cannot be automat…

Mahindra & Mahindra Ltd, Mumbai vs. Addl CIT Cir 2(2), Mumbai

In the result, this ground of appeal is

ITA 1448/MUM/2016[2005-06]Status: DisposedITAT Mumbai29 Jun 2020AY 2005-06

Bench: Shri Pawan Singh & Shri M Balaganesh(Virtual Hearing) Assessment Year : 2005 – 2006 Mahindra & Mahindra Ltd., Addl Cit Circle 2(2)(2), Mahindra Towers, Worli, Mumbai Mumbai 400 018 Pan Aaacm3025E Vs (Appellant) (Respondent) Assessment Year : 2005 – 2006 Addl Cit Circle 2(2)(2), Mahindra & Mahindra Ltd., Mumbai Mahindra Towers,Worli, Mumbai 400 018 Pan Aaacm3025E Vs (Appellant) (Respondent)

For Appellant: Shri Harish Mahajan -ARFor Respondent: Shri A Mohan CIT-DR
Section 40ASection 40A(9)Section 92C

…h Court), Grindwell Norton Limited in ITA No. 528/Mum/2012 & 5800/Mum/2013), General Electrodes & Equipments Ltd. (155 ITR 787), CIT vs. Bhavnagar Bone and Fertilizer Ltd. (166 ITR 316), D.P. Sandu Brothers Chember (P) Ltd. (273 ITR 1) & Alchemic P. Ltd. (130 ITR 168) (Guj.). 58. On the other hand, the ld. DR for the revenue supported the order of lower authorities. 59. We have considered the rival submission of both the parties and perused the material available on record. The AO rejected the claim of assessee on the ground that sale tax is revenue expenditure and not of loan. The AO also held that this is…

DCIT, Cir-12(2), Kolkata vs. M/S Philips India Ltd., Kolkata

ITA 863/KOL/2016[2011-2012]Status: DisposedITAT Kolkata15 Dec 2017AY 2011-2012

Bench: Shri N.V.Vasudevan & Shri Waseem Ahmed

Section 143(3)Section 144CSection 144C(5)Section 92C

…ken by the assessee through cheque/cash. Thus the impugned loan was not availed in kind. Thus the provision of section 28(iv) cannot be applied to the impugned waiver of loan. The Hon’ble Gujarat High Court in the case of CIT Vs. Alchemic (P) Ltd. reported in 130 ITR 168 has held as under : “Under section 28( iv), the question of including the value of the benefit or perquisite would arise only if the benefit or the perquisite is not in cash or money but is non-monetary benefit or non-monetary perquisite. Hence, the impugned amount was not taxable under section 28( iv).” In view of above we note the loan amount w…

M/S Philips India Ltd., Kolkata vs. DCIT, Cir-12(2), Kolkata

ITA 539/KOL/2016[2011-2012]Status: DisposedITAT Kolkata15 Dec 2017AY 2011-2012

Bench: Shri N.V.Vasudevan & Shri Waseem Ahmed

Section 143(3)Section 144CSection 144C(5)Section 92C

…ken by the assessee through cheque/cash. Thus the impugned loan was not availed in kind. Thus the provision of section 28(iv) cannot be applied to the impugned waiver of loan. The Hon’ble Gujarat High Court in the case of CIT Vs. Alchemic (P) Ltd. reported in 130 ITR 168 has held as under : “Under section 28( iv), the question of including the value of the benefit or perquisite would arise only if the benefit or the perquisite is not in cash or money but is non-monetary benefit or non-monetary perquisite. Hence, the impugned amount was not taxable under section 28( iv).” In view of above we note the loan amount w…

DCIT, Chennai vs. Sical Logistics Ltd., Chennai

ITA 1697/CHNY/2014[2010-11]Status: DisposedITAT Chennai18 Aug 2017AY 2010-11

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri Milind Madhukar, JCIT &For Respondent: Shri S. Sridhar, Advocate
Section 10Section 14A

…ection does not apply to the benefits in cash or money and it applies only to a transaction arising from business and this view has also been supported by the Delhi High Court in the case of Ravinder Singh vs. CIT (205 ITR 353) and Alchemic Pvt. Ltd. v. CIT (130 ITR 168). Section 28(iv) provides for chargeability of profits and gains or business or profession with relation to the value of any benefit or perquisite arising out of 84 - - ITA 1695 to 1697 & CO 84/Mds/14 business or the exercise of profession and therefore, the same would not include the money transactions. Thus, the CIT(Appeals) observed that se…

DCIT, Chennai vs. Sical Logistics Ltd., Chennai

ITA 1696/CHNY/2014[2009-10]Status: DisposedITAT Chennai18 Aug 2017AY 2009-10

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri Milind Madhukar, JCIT &For Respondent: Shri S. Sridhar, Advocate
Section 10Section 14A

…ection does not apply to the benefits in cash or money and it applies only to a transaction arising from business and this view has also been supported by the Delhi High Court in the case of Ravinder Singh vs. CIT (205 ITR 353) and Alchemic Pvt. Ltd. v. CIT (130 ITR 168). Section 28(iv) provides for chargeability of profits and gains or business or profession with relation to the value of any benefit or perquisite arising out of 84 - - ITA 1695 to 1697 & CO 84/Mds/14 business or the exercise of profession and therefore, the same would not include the money transactions. Thus, the CIT(Appeals) observed that se…

DCIT, Chennai vs. Sical Logistics Ltd., Chennai

ITA 1695/CHNY/2014[2008-09]Status: DisposedITAT Chennai18 Aug 2017AY 2008-09

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri Milind Madhukar, JCIT &For Respondent: Shri S. Sridhar, Advocate
Section 10Section 14A

…ection does not apply to the benefits in cash or money and it applies only to a transaction arising from business and this view has also been supported by the Delhi High Court in the case of Ravinder Singh vs. CIT (205 ITR 353) and Alchemic Pvt. Ltd. v. CIT (130 ITR 168). Section 28(iv) provides for chargeability of profits and gains or business or profession with relation to the value of any benefit or perquisite arising out of 84 - - ITA 1695 to 1697 & CO 84/Mds/14 business or the exercise of profession and therefore, the same would not include the money transactions. Thus, the CIT(Appeals) observed that se…

ITO 1(3)(2), Mumbai vs. Saurabh Industries Ltd, Mumbai

In the result the appeal is dismissed

ITA 460/MUM/2015[2006-07]Status: DisposedITAT Mumbai12 May 2017AY 2006-07

Bench: Shri Joginder Singh () & Shri N.K. Pradhan () Assessment Year: 2006-07

For Appellant: Shri K.K. Lalkaka, ARFor Respondent: Shri Vishwas Mundhe, DR
Section 143(3)Section 28Section 41(1)

…Reliance was also placed by him on the decision in the case of Parimissetti Seetharamamma vs. Commissioner of Income Tax, 1965 AIR 1905; M/s. Bombay Gas Co. Ltd. vs. Addl. CIT (ITA No. 646/Mum/2009) – ITAT ‘B’ Bench, Mumbai; CIT vs. Alchemic Pvt. Ltd. (1981) 130 ITR 168 (Guj) and CIT vs. M/s. Xylon Holdings Pvt. Ltd. (ITA No. 3704 of 2010) by Bombay High Court. The learned counsel of the assessee placed reliance on the decision of the Hon'ble Bombay High Court in CIT vs. Sulzer India Ltd. 369 ITR 746 – 747, stating that therein the decision in the case of Solid Containers has been distinguished and decision in…

Mackinnon Mackenzie & Co.Ltd, Mumbai vs. ITO 2(2)(3), Mumbai

In the result, the appeal of the assessee is allowed

ITA 2392/MUM/2012[2007-08]Status: DisposedITAT Mumbai11 May 2017AY 2007-08

Bench: Shri D.T.Garasia, Jm & Shri Rajesh Kumar, Am

For Appellant: Shri Hariom TulsyanFor Respondent: Shri Suman Kumar
Section 143(1)Section 143(2)Section 28Section 41(1)

…the monies and that only applicable to the benefits and perquisites and not the money received by the assessee in the normal course of business. In defence of his arguments the ld.AR relied upon the following case law: i) CIT V/s Alchemic Pvt Ltd reported in 130 ITR 168 (Guj); ii) Iskraemeco Regent Ltd (196 Taxman 103) (Mad High Court); iii) Ravinder Singh and Amptjer V/s CIT (205 ITR 353) (Delhi High Court); iv) ITO V/s Ahuja Graphic Machinery (P) Ltd (109) ITD 71 (Mum)(TM). The ld. AR submitted that the provisions of section 28(iv) of the Act provides for the assessment of the value of any benefit or perquisit…

D.C.I.T. Circle 3(3), Mumbai vs. Vibhadeep Investment & Trading Ltd., Mumbai

In the result, Revenue’s appeal as well as the Cross Objection

ITA 4466/MUM/2012[2008-09]Status: DisposedITAT Mumbai19 Aug 2016AY 2008-09

Bench: Sri Jason P. Boaz, Am & Sri Sandeep Gosain, Jm The Asst. Commissioner Of Vs. M/S. Vibhadeep Investment & Income Tax-3(3), Room Trading Ltd., Mafatlal House, No.609, 6Th Floor, Aayakar H. T. Parekh Marg, Backbay Bhavan, M. K. Road, Reclamation, Mumbai 400 Mumbai 400 020 020 Pan: Aaacv 1946 M Appellant .. Respondent C. O. No.155/Mum/2013 (In Ita No.4466/Mum/2012- Ay: 2008-09)

Section 115JSection 143Section 28

…eceipt in cash, it is not covered by the definition of section 28 (iv). In this connection, the learned AR relied upon the judicial pronouncement rendered in the case of CIT Vs Mafatlal Gangabhai and Co. Ltd. [219 ITR 644 (SC)] and CIT Vs Alchemic P. Ltd. [130 ITR 168 (Guj). It was further submitted by the learned AR that waiver is capital account as the loan was utilized in shares of subsidiaries and in other companies. As the said loan was not taken for assessee’s trading, the write back thereof does not give any rise to any tradeable receipts. In this connection, he relied upon the decision rendered in t…

ACIT, New Delhi vs. Sh. Anil Kumar Sharma, New Delhi

In the result, the appeals of the Revenue as well as Cross

ITA 6204/DEL/2013[2010-11]Status: DisposedITAT Delhi23 Sept 2015AY 2010-11

Bench: Shri Chandra Mohan Garg & Shri L.P. Sahu

Section 127Section 132Section 139Section 143(3)Section 153ASection 2(24)(iv)

…0-71?” ITA No. 6204/D/2013 & CO No. 230/D/2015 7 This Court held that use of the words ‘whether convertible into money or not’ goes to show that the term ‘benefit or amenity or perquisite’ cannot relate to cash payments. In CIT vs. Alchemic (P) Ltd. [1981] 130 ITR 168 (Guj.), the term ‘benefit or perquisite’ arising from business as appearing in section 28(iv) fell for consideration. The Court held that if what was received either by way of benefit or perquisite was money, there was no question of considering the value of such monetary benefit or perquisite under clause (iv) of section 28. It held that it was…

Logitronics Pvt Ltd vs. Commissioner of Income Tax & Anr

ITA/1623/2010HC Delhi18 Feb 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

Section 2(24)Section 41(1)

…ce S.H. Kapadia (as he then was) in Mahindra and Mahindra Ltd. v. Commissioner of Income Tax (2003) 261 ITR 501, while approving the ratio laid down by the Division Bench of the Gujarat High Court in Commissioner of Income Tax v. Alchemic Pvt. Ltd. (1981) 130 ITR 168, has held as follows: “At the outset, we wish to clarify that this judgment is confined to the facts of this case. This is because the value of any benefit or perquisite arising from business, as contemplated by Section 28(iv), could accrue in numerous ways. The income which can be taxed under Section 28(iv) must not only be referable to…

The Commissioner of Income Tax ¿¿¿ II vs. Jindal Equipments Leasing & Consultancy Services Ltd

ITA-51/2009HC Delhi23 Dec 2009
Section 260ASection 28Section 41Section 41(1)

…the following manner: “…..The income which can be taxed under Section 28(iv) must not only be referable to a benefit or perquisite, but it must be arising from business. Secondly, Section 28(iv) does not apply to benefits in cash or money (see 130 ITR 168, Gujarat)…..” ii) Benefit or perquisite must be one arising in the course of business. 9. For this reason, we are not going into the question as to whether second requisite is fulfilled or not. In the present case, the Tribunal has held that the waiver/written off part of principal amount of loan by JSPL does not constitute income a…