CIT v. Amalgamation Pvt. Ltd.

226 ITR 188Supreme Court of India1997#3354 most cited

What is CIT v. Amalgamation Pvt. Ltd. authority for?

Expenditure incurred under a guarantee for the purpose of business is considered a business expenditure, and its write-off is treated as a business loss deductible from income. The expense incurred to recoup business losses in a subsidiary company is also allowable as a deduction.

35

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2011 to 2024.

Also referred to as

CIT v. Amalgamation Pvt. Ltd. · 226 ITR 188 · business expenditure · business loss · write off · guarantee · irrecoverable expenditure · compensation · subsidiaries

Sections most often in play

Section 28Section 37(1)
Read the full judgment

Judgments citing CIT v. Amalgamation Pvt. Ltd.

DCIT, Chennai vs. Kasturi and Sons Ltd., Chennai

In the result, all the Revenue’s appeals are allowed for statistical purposes

ITA 2012/CHNY/2014[2007-08]Status: DisposedITAT Chennai18 Aug 2017AY 2007-08

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Sh. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri R. Jeyakumar, CIT
Section 143(1)Section 148

…s equity shares of 2,40,00,000 at the rate of `10/- each share. Thereafter the assessee sold 90% of shares to the extent of `2,43,00,000/- to M/s Chenan Enterprises Pvt. Ltd. Referring to the judgment of Supreme Court in CIT v. Amalgamation Pvt. Ltd. (1997) 226 ITR 188, the Ld.counsel pointed out that the loss suffered by the assessee on account of bank guarantee which was later on converted into equity, would amount to business loss, therefore, it has to be allowed as business loss under Section 37(1) of the Act. 15. On the contrary, Shri R. Jeyakumar, the Ld. Departmental Representative, submitted that the…

Kasturi and Sons Ltd., Chennai vs. DCIT, Chennai

In the result, all the Revenue’s appeals are allowed for statistical purposes

ITA 1619/CHNY/2014[2010-11]Status: DisposedITAT Chennai18 Aug 2017AY 2010-11

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Sh. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri R. Jeyakumar, CIT
Section 143(1)Section 148

…s equity shares of 2,40,00,000 at the rate of `10/- each share. Thereafter the assessee sold 90% of shares to the extent of `2,43,00,000/- to M/s Chenan Enterprises Pvt. Ltd. Referring to the judgment of Supreme Court in CIT v. Amalgamation Pvt. Ltd. (1997) 226 ITR 188, the Ld.counsel pointed out that the loss suffered by the assessee on account of bank guarantee which was later on converted into equity, would amount to business loss, therefore, it has to be allowed as business loss under Section 37(1) of the Act. 15. On the contrary, Shri R. Jeyakumar, the Ld. Departmental Representative, submitted that the…

Kasturi and Sons Ltd., Chennai vs. DCIT, Chennai

In the result, all the Revenue’s appeals are allowed for statistical purposes

ITA 1618/CHNY/2014[2009-10]Status: DisposedITAT Chennai18 Aug 2017AY 2009-10

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Sh. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri R. Jeyakumar, CIT
Section 143(1)Section 148

…s equity shares of 2,40,00,000 at the rate of `10/- each share. Thereafter the assessee sold 90% of shares to the extent of `2,43,00,000/- to M/s Chenan Enterprises Pvt. Ltd. Referring to the judgment of Supreme Court in CIT v. Amalgamation Pvt. Ltd. (1997) 226 ITR 188, the Ld.counsel pointed out that the loss suffered by the assessee on account of bank guarantee which was later on converted into equity, would amount to business loss, therefore, it has to be allowed as business loss under Section 37(1) of the Act. 15. On the contrary, Shri R. Jeyakumar, the Ld. Departmental Representative, submitted that the…

Kasturi and Sons Ltd., Chennai vs. DCIT, Chennai

In the result, all the Revenue’s appeals are allowed for statistical purposes

ITA 1617/CHNY/2014[2008-09]Status: DisposedITAT Chennai18 Aug 2017AY 2008-09

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Sh. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri R. Jeyakumar, CIT
Section 143(1)Section 148

…s equity shares of 2,40,00,000 at the rate of `10/- each share. Thereafter the assessee sold 90% of shares to the extent of `2,43,00,000/- to M/s Chenan Enterprises Pvt. Ltd. Referring to the judgment of Supreme Court in CIT v. Amalgamation Pvt. Ltd. (1997) 226 ITR 188, the Ld.counsel pointed out that the loss suffered by the assessee on account of bank guarantee which was later on converted into equity, would amount to business loss, therefore, it has to be allowed as business loss under Section 37(1) of the Act. 15. On the contrary, Shri R. Jeyakumar, the Ld. Departmental Representative, submitted that the…

Kasturi and Sons Ltd., Chennai vs. DCIT, Chennai

In the result, all the Revenue’s appeals are allowed for statistical purposes

ITA 1616/CHNY/2014[2007-08]Status: DisposedITAT Chennai18 Aug 2017AY 2007-08

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Sh. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri R. Jeyakumar, CIT
Section 143(1)Section 148

…s equity shares of 2,40,00,000 at the rate of `10/- each share. Thereafter the assessee sold 90% of shares to the extent of `2,43,00,000/- to M/s Chenan Enterprises Pvt. Ltd. Referring to the judgment of Supreme Court in CIT v. Amalgamation Pvt. Ltd. (1997) 226 ITR 188, the Ld.counsel pointed out that the loss suffered by the assessee on account of bank guarantee which was later on converted into equity, would amount to business loss, therefore, it has to be allowed as business loss under Section 37(1) of the Act. 15. On the contrary, Shri R. Jeyakumar, the Ld. Departmental Representative, submitted that the…

Kasturi and Sons Ltd., Chennai vs. DCIT, Chennai

In the result, all the Revenue’s appeals are allowed for statistical purposes

ITA 1615/CHNY/2014[2007-08]Status: DisposedITAT Chennai18 Aug 2017AY 2007-08

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Sh. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri R. Jeyakumar, CIT
Section 143(1)Section 148

…s equity shares of 2,40,00,000 at the rate of `10/- each share. Thereafter the assessee sold 90% of shares to the extent of `2,43,00,000/- to M/s Chenan Enterprises Pvt. Ltd. Referring to the judgment of Supreme Court in CIT v. Amalgamation Pvt. Ltd. (1997) 226 ITR 188, the Ld.counsel pointed out that the loss suffered by the assessee on account of bank guarantee which was later on converted into equity, would amount to business loss, therefore, it has to be allowed as business loss under Section 37(1) of the Act. 15. On the contrary, Shri R. Jeyakumar, the Ld. Departmental Representative, submitted that the…

Kasturi and Sons Ltd., Chennai vs. DCIT, Chennai

In the result, all the Revenue’s appeals are allowed for statistical purposes

ITA 1614/CHNY/2014[2006-07]Status: DisposedITAT Chennai18 Aug 2017AY 2006-07

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Sh. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri R. Jeyakumar, CIT
Section 143(1)Section 148

…s equity shares of 2,40,00,000 at the rate of `10/- each share. Thereafter the assessee sold 90% of shares to the extent of `2,43,00,000/- to M/s Chenan Enterprises Pvt. Ltd. Referring to the judgment of Supreme Court in CIT v. Amalgamation Pvt. Ltd. (1997) 226 ITR 188, the Ld.counsel pointed out that the loss suffered by the assessee on account of bank guarantee which was later on converted into equity, would amount to business loss, therefore, it has to be allowed as business loss under Section 37(1) of the Act. 15. On the contrary, Shri R. Jeyakumar, the Ld. Departmental Representative, submitted that the…

Kasturi and Sons Ltd., Chennai vs. DCIT, Chennai

In the result, all the Revenue’s appeals are allowed for statistical purposes

ITA 1613/CHNY/2014[2005-06]Status: DisposedITAT Chennai18 Aug 2017AY 2005-06

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Sh. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri R. Jeyakumar, CIT
Section 143(1)Section 148

…s equity shares of 2,40,00,000 at the rate of `10/- each share. Thereafter the assessee sold 90% of shares to the extent of `2,43,00,000/- to M/s Chenan Enterprises Pvt. Ltd. Referring to the judgment of Supreme Court in CIT v. Amalgamation Pvt. Ltd. (1997) 226 ITR 188, the Ld.counsel pointed out that the loss suffered by the assessee on account of bank guarantee which was later on converted into equity, would amount to business loss, therefore, it has to be allowed as business loss under Section 37(1) of the Act. 15. On the contrary, Shri R. Jeyakumar, the Ld. Departmental Representative, submitted that the…

Kasturi and Sons Ltd., Chennai vs. DCIT, Chennai

In the result, all the Revenue’s appeals are allowed for statistical purposes

ITA 1612/CHNY/2014[2005-06]Status: DisposedITAT Chennai18 Aug 2017AY 2005-06

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Sh. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri R. Jeyakumar, CIT
Section 143(1)Section 148

…s equity shares of 2,40,00,000 at the rate of `10/- each share. Thereafter the assessee sold 90% of shares to the extent of `2,43,00,000/- to M/s Chenan Enterprises Pvt. Ltd. Referring to the judgment of Supreme Court in CIT v. Amalgamation Pvt. Ltd. (1997) 226 ITR 188, the Ld.counsel pointed out that the loss suffered by the assessee on account of bank guarantee which was later on converted into equity, would amount to business loss, therefore, it has to be allowed as business loss under Section 37(1) of the Act. 15. On the contrary, Shri R. Jeyakumar, the Ld. Departmental Representative, submitted that the…

Kasturi and Sons Ltd., Chennai vs. DCIT, Chennai

In the result, all the Revenue’s appeals are allowed for statistical purposes

ITA 1611/CHNY/2014[2004-05]Status: DisposedITAT Chennai18 Aug 2017AY 2004-05

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Sh. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri R. Jeyakumar, CIT
Section 143(1)Section 148

…s equity shares of 2,40,00,000 at the rate of `10/- each share. Thereafter the assessee sold 90% of shares to the extent of `2,43,00,000/- to M/s Chenan Enterprises Pvt. Ltd. Referring to the judgment of Supreme Court in CIT v. Amalgamation Pvt. Ltd. (1997) 226 ITR 188, the Ld.counsel pointed out that the loss suffered by the assessee on account of bank guarantee which was later on converted into equity, would amount to business loss, therefore, it has to be allowed as business loss under Section 37(1) of the Act. 15. On the contrary, Shri R. Jeyakumar, the Ld. Departmental Representative, submitted that the…

Aig Capital India P. Ltd, Mumbai vs. ITO RG 6(1)(4), Mumbai

ITA 2940/MUM/2011[2007-08]Status: DisposedITAT Mumbai27 Jul 2016AY 2007-08

Bench: Shri Amit Shukla () & Shri Ashwani Taneja ()

Section 143(3)Section 250

…clusively 'for the purpose of business’, therefore the same needs to be allowed. The appellant has also relied upon the following case laws: (a) DCIT vs. Venkateswar Investment & Finance P. Ltd. 277 ITR 20 (Cal), ITAT. (b) CIT Vs. Amalgamations Pvt Ltd (1997)226 ITR 188 (SC) (c) CIT Vs. Malayalam Plantations Ltd (1987)188 ITR 63 (SC) CIT Vs. Jagannath Kishonlal 41 ITR 360 (SC). (d) CIT Vs. Panipat Woolen & General Mills 103 ITR 66. (e) (f) Madhavprasad Jatia Vs. CIT 118 ITR 200 (SC), and (g) S.A. Builders Ltd Vs. CIT288 ITR 1(SC).” 6. Ld. CIT(A) considered the submission of the assessee, but he was not satisfied…

M/S. Tata Industries Ltd, Mumbai vs. The ITO 2(3)(3), Mumbai

In the result, appeal of the assessee is treated as partly allowed

ITA 4894/MUM/2008[2004-2005]Status: DisposedITAT Mumbai20 Jul 2016AY 2004-2005

Bench: Shri G. S. Pannu, Accoutant Member & Shri Sanjay Gargtata Industries Ltd., Vs. The Income Tax Officer, Ward- Bombay House,24,Homi 2 (3) (3), Room No.555, Mody Street, Fort, Mumbai Aayakar Bhavan, Maharshi 400 001 Karve Road, Mumbai 400 020 Pan: Aaact 4058 L Appellant .. Respondent Appellant By Shri Dinesh Vyas, Ar Respondent By Shri Alok Johri, Dr Date Of Hearing 22-06-2016 Date Of Pronouncement 20-07-2016

Section 10ASection 115JSection 14ASection 36

…llowed under section 14A of the Act.” (iii) Hon’ble ITAT considered Hon’ble Apex Court Judgements in the case of Distributors (Baroda) Pvt. Ltd. 83 ITR 377 and Bengal and Assam Investors Ltd., NarainSwadeshi Weaving Mills 26 ITR 765 and Amalgamation Pvt. Ltd 226 ITR 188 at para 19 and 20 held that “19. In view of the above legal position, we are of the view that where a specific head is provided in respect of a particular income, then such income must be computed under that very head irrespective of the nature of income. In the case of a company in the business of holding shares, if investment in shares is dispo…

Quantium Advisors P. Ltd, Mumbai vs. DCIT Cir 1(3), Mumbai

Appeal of the assessee is allowed

ITA 3418/MUM/2015[2011-12]Status: DisposedITAT Mumbai15 Jul 2016AY 2011-12

Bench: Shri G.S.Pannu & Shri Pawan Singhquantum Advisors Pvt. Ltd., 503, Regent Chamber, Nariman Point, Mumbai 400 021. Pan:Aaacq 0281C ... Appellant Vs.

For Appellant: S/Shri J.D.Mistry/Niraj D. SethFor Respondent: Shri Amit Kumar Singh
Section 143(3)Section 37(1)

…question is not laid out for the purposes of assessee’s business, merely because it could benefit another entity also. 15. We may also refer to the reliance placed by CIT(A) on the judgment of Hon'ble Supreme Court in the case of Amalgamations (P) 25 Ltd., 226 ITR 188 (SC). According to the CIT(A), the ratio of the above decision justifies the inference that the impugned expenditure was not incurred for the purposes of assessee’s business. We have perused the judgment of Hon'ble Supreme Court in the case of Amalgamations (P) Ltd. (supra) and find that the same has been unjustly applied in the present case inas…

M/S Canara Bank Bsca Section vs. The Asst Commissioner of Income Tax Circle-11(2)

ITA/1397/2006HC Karnataka12 Nov 2013

Bench: N.KUMAR,RATHNAKALA

Section 143Section 260

…It - 10 - has been explained above as to how the loss was incurred by the appellant in the course of carrying on its business. In this regard, the appellant relies on the decision of the Supreme Court in the case of Amalgamations Pvt. Ltd., V. CIT, 226 ITR 188. In that case, the Supreme Court has held that a loss incurred by the holding company in guaranteeing loans to a subsidiary company is an allowable deduction in the computation of the total income of the holding company. Thus it is submitted that the deduction of Rs.95.21 Crores claimed by us is allowable as a business expenditure und…

CIT vs. Nalwa Investment Ltd

ITA/1345/2010HC Delhi11 May 2011

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

Section 263Section 56

…IN THE HIGH COURT OF DELHI AT NEW DELHI ITA No.L345 of 2OLO + % COMMISSIONER OF INCOME TAX throuqh: VERSUS Reserved On: March 37, 2077. Pronounced On: Mav 77, 2077. . . Appellant Mr. Abhishek Maratha, Sr. Standing Counsel. M/s. NALWA INVESTMENTS LTD. . . .Respondent throuqh: Mr. Ajay Vohra with Ms. Kavita Jha, Advocates. CORAM :- HON',BLE MR. JUSTTCE A.K. StKRt HON',BLE MR. JUSTTCE M.L. MEHTA 1. Whether Reporters of Local newspapers may be allowed to see the Judgment? 2. To be referred to the Reporter or not? 3. Whether the Judgment should be reported in the Digest? A.K. StKRl. l. For orders see, ITA No.270…