CIT v. Ashok Leyland Ltd.

86 ITR 549Supreme Court of India1972#3817 most cited

What is CIT v. Ashok Leyland Ltd. authority for?

Expenditure incurred to remove the possibility of recurring disadvantage is not considered a payment made to secure an enduring advantage. Revenue expenditure is operational and intended for the furtherance of the enterprise.

31

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2016 to 2025.

Also referred to as

CIT v. Ashok Leyland Ltd. · revenue expenditure · enduring benefit · capital expenditure · operational expenses · business income · deductions · 86 ITR 549 · 1972 · SC

Sections most often in play

Section 115PSection 14ASection 234ASection 234BSection 271(1)(c)Section 80IABSection 143(3)Section 37
Read the full judgment

Issues it is cited on

section 80iabsection 115pdeduction under section 80iasection 14a(2)deduction u/s 80iaenduring benefitunabsorbed depreciationcommercial expediencysection 80iasection 80iinterest u/s 234adisallowance u/s 14a

Judgments citing CIT v. Ashok Leyland Ltd.

Seyad Trading Company, Tirunelveli vs. ACIT Central Circle-1, Madurai

The appeals stands allowed

ITA 130/CHNY/2021[2018-19]Status: DisposedITAT Chennai13 Jul 2022AY 2018-19

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./ Ita No.126/Chny/2021 (िनधाBरण वषB / Assessment Year: 2014-15) & आयकर अपील सं./ Ita No.127/Chny/2021 (िनधाBरण वषB / Assessment Year: 2015-16) & आयकर अपील सं./ Ita No.128/Chny/2021 (िनधाBरण वषB / Assessment Year: 2016-17) & आयकर अपील सं./ Ita No.130/Chny/2021 (िनधाBरण वषB / Assessment Year: 2018-19) M/S. Seyad Trading Company Acit बनाम/ Survey No.338/3 House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Accfs-3027-M (अपीलाथ"/Appellant) : (""थ" / Respondent) & आयकर अपील सं./ Ita No.129/Chny/2021 (िनधाBरण वषB / Assessment Year: 2017-18) M/S. Seyad Agro Investment Pvt. Ltd. Acit बनाम/ 110E/20/7, House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Aamcs-4443-E (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ" की ओरसे/ Appellant By : Shri B. Ramakrishnan (F.C.A)-Ld. Ar ""थ" की ओरसे/Respondent By : Shri M. Rajan (Cit)-Ld. Dr

For Appellant: Shri B. Ramakrishnan (F.C.A)-Ld. ARFor Respondent: Shri M. Rajan (CIT)-Ld. DR
Section 132Section 132(4)Section 143(3)Section 153CSection 37(1)

…o carry on charitable activity, however, the same could not be considered as business expenditure for the assessee. Reliance was placed on the decision of Hon'ble Apex Court in CIT v. Chandulal Keshavlal (1960; 38 ITR 601) and CIT v. Ashok Leyland Ltd. (1972; 86 ITR 549). The concept of diversion of income by overriding title would also be applicable. Finally, the stand of Ld. AO was upheld. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 5. Upon perusal of copy of sample invoice of SBC, as placed on record, we find that the seller has charged charity @30/- per parcel. The se…

DCIT, Circle- 4(2), New Delhi vs. Bharat Light and Power Pvt. Ltd., New Delhi

In the result, the appeal filed by the Assessee stands

ITA 5263/DEL/2017[2012-13]Status: DisposedITAT Delhi27 Jun 2022AY 2012-13

Bench: Shri Anil Chaturvedi & Shri N.K. Choudhryassessment Year: 2012-13

For Appellant: NoneFor Respondent: ShriZahid Parvez, Ld. Sr. DR
Section 250(6)Section 37

…enerating income. Capital expenditure, must, therefore, generally mean an acquisition of an asset and the asset must be intended to be of lasting value as held in Jagat Bus Service, Saharanpur V. CIT (1950) 18 ITR 13 (All). In CIT V. Ashok Leyland Ltd. (1972) 86 ITR 549 (SC), it was held that the word 'capital' connotes permanency. Therefore, capital expenditure is akin to the concept of securing some tangible or intangible property or corporeal or incorporeal right to that they can be of lasting or enduring benefit to the enterprise. Similarly, in Assam Bengal Cement Co. Ltd. V. CIT (1955) 27 ITR 34 (SC), it was…

El El Hotels & Investments Ltd., New Delhi vs. DCIT, New Delhi

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

ITA 918/DEL/2010[2006-07]Status: DisposedITAT Delhi16 Feb 2021AY 2006-07
For Appellant: Shri Ajay Wadhwa, Advocate &For Respondent: Ms Nidhi Srivastava, CIT-DR
Section 115JSection 132Section 143(3)Section 153A

…vs. CIT (2016) 380 ITR 151 (Calcutta); iv) Bikaner Gypsums Ltd. vs. CIT (1991) 187 ITR 39; v) CIT vs. Associated Cement Companies Ltd. (1988) 172 ITR 257 (SC); vi) Empire Jute Co. Ltd. vs. CIT (1980) 124 ITR 1 (SC); 14 vii) CIT vs. Ashok Leyland Ltd. (1972) 86 ITR 549 (SC); viii) Airport Authority of India vs. CIT (2012) 340 ITR 407 (Del); ix) CIT, Bombay vs. Airlines Hotel (P) Ltd.; x) CIT vs. UTI Bank Ltd. (2013) 32 taxmann.com 282 (Gujarat); xi) CIT vs. M/s Shriram Builcons Ltd. ITA No.39,53,60,65 of 2006. xii) CIT vs. Motor Industries Co. Ltd. (1997) 223 ITR 112 (Karnataka); xiii) CIT vs. Sales Magnesite (P…

International Tobacco Co. Ltd, Mumbai vs. Assistant Commissioner of Income Tax 2(2)(1), Mumbai

In the result, appeal of the assessee is partly allowed for statistical purpose

ITA 4902/MUM/2017[2012-13]Status: DisposedITAT Mumbai30 Jan 2019AY 2012-13

Bench: Shri C.N. Prasad, Hon'Ble & Shri G. Manjunatha, Hon'Blem/S. International Tobacco Co. Ltd., V. A.C.I.T, Circle – 2(2)(1) C/O Godfrey Phillips India Ltd., R.No. 545, 5Th Floor, V.K.K. Menon Marg (Sahar Road), Aayakar Bhavan, M.K. Road, Chakala, Andheri (East) Mumbai-400 020 Mumbai – 400 099 Pan: Aaaci 3492 H (Appellant) (Respondent) Assessee By : Shri Manish V. Shah & Shri Ms. Vidhi Doshi Department By : Shri Abi Rama Kartikeyan

For Appellant: Shri Manish V. Shah &For Respondent: Shri Abi Rama Kartikeyan

…repairs done to the classrooms has an enduring advantages, we have examined the nature of expenditure in the assessee's case fall in capital area or not. Further, it is noticed that the finding of the Apex Court in the case of CIT v. Ashok Leyland Ltd. [1972] 86 ITR 549 is relevant and accordingly, "the line that divides the revenue expenditure from the capital expenditure is often times very thin. It will not be correct to say that by avoiding certain business expenditure, the company can be 7 M/s. International Tobacco Co. Ltd., said to have acquired enduring benefits or acquired any income-yielding asset. The…

Systems America (India) Ltd vs. Addl. Commissioner of Income Tax

In the result, appeal of the assessee is partly allowed and that of the Department is dismissed

ITA 905/DEL/2005[2001-2002]Status: DisposedITAT Delhi12 Jul 2018AY 2001-2002

Bench: Shri N.K. Saini & Shri Kuldip Singh

For Respondent: Sh. M. Baranwal, Sr. DR
Section 10ASection 10A(9)Section 195Section 234BSection 250Section 35DSection 37(1)Section 80

…o existence an asset or an advantage for enduring benefit of a trade there was a good reason for treating such expenditure as properly attributable not to Revenue but capital. The reliance was placed on the following case laws:- i. CIT vs. Ashok Leyland Ltd. 86 ITR 549, (SC) ii. Alembic Chemical Works Co. Ltd. V. CIT, 177 ITR 377, (SC) iii. Travancore Sugars & Chemicals Ltd. v. CIT, 62 ITR 566, (SC) iv. Devidas Vithaldas & Co. vs. CIT, 84 ITR 277, (SC) v. R. B. Seth Moolchand Suganchand vs. CIT, 86 ITR 647, (SC) vi. Shree Sita Ram Paper Mills Ltd. vs. DCIT, 6 SOT 585 (Del) vii. Nimbus Communications Ltd. vs. AC…

ACIT, Circle-7(1) vs. System America India Ltd

In the result, appeal of the assessee is partly allowed and that of the Department is dismissed

ITA 1492/DEL/2005[2001-2002]Status: DisposedITAT Delhi12 Jul 2018AY 2001-2002

Bench: Shri N.K. Saini & Shri Kuldip Singh

For Respondent: Sh. M. Baranwal, Sr. DR
Section 10ASection 10A(9)Section 195Section 234BSection 250Section 35DSection 37(1)Section 80

…o existence an asset or an advantage for enduring benefit of a trade there was a good reason for treating such expenditure as properly attributable not to Revenue but capital. The reliance was placed on the following case laws:- i. CIT vs. Ashok Leyland Ltd. 86 ITR 549, (SC) ii. Alembic Chemical Works Co. Ltd. V. CIT, 177 ITR 377, (SC) iii. Travancore Sugars & Chemicals Ltd. v. CIT, 62 ITR 566, (SC) iv. Devidas Vithaldas & Co. vs. CIT, 84 ITR 277, (SC) v. R. B. Seth Moolchand Suganchand vs. CIT, 86 ITR 647, (SC) vi. Shree Sita Ram Paper Mills Ltd. vs. DCIT, 6 SOT 585 (Del) vii. Nimbus Communications Ltd. vs. AC…

Bayer Cropscience Ltd, Mumbai vs. Addl CIT RG 10(3), Mumbai

In the result, the appeal filed by the assessee is partly allowed for the statistical purposes and the appeal filed by the Revenue is dismissed

ITA 7619/MUM/2013[2008-09]Status: DisposedITAT Mumbai07 Jun 2018AY 2008-09

Bench: Shri Saktijit Dey & Shri Rajesh Kumarassessment Year: 2008-09

For Appellant: Shri Paras S. Savla, A.R. &For Respondent: Ms. Pooja Swarup, D.R
Section 143(2)Section 14ASection 40Section 40A(2)

…commission for securing orders, therefore, the question of deduction of TDS does not arise. In this regard, the Ld, A.R. relied upon certain judicial precedents, including the decision of Hon’ble Supreme Court in the case of CIT vs. Ashok Leyland Ltd. (1972) 86 ITR 549. 14. We have heard both the parties and perused the material on record. There is no dispute with regard to the fact that there is no employer and employee relationship between the assessee and Mr. SS Mohla. When compensation was paid to Mr. SS Mohla he was no longer an employee of the assessee. The assessee itself admitted that it has paid commiss…

The Dupty, CIT, Vijayawada vs. Sri Ravi Ramesh Babu, Vijayawada

In the result, the addition made of Rs

ITA 52/VIZ/2017[2008-2009]Status: DisposedITAT Visakhapatnam23 Feb 2018AY 2008-2009

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Bledcit, Circle-2(1), Vs. Ravi Ramesh Babu, Vijayawada. D.No.24-16-12/28, F.F.2, Vasantha Apartments, Near Loyola College, Vijayawada Pan No. Adtpr 1314 G (Appellant) (Respondent)

For Appellant: Shri M.S.R. Prasad – CAFor Respondent: Shri P.S. Murthy – Sr.DR
Section 143(3)Section 147

…ains to be examined is whether the genuineness the expenditure is capital or revenue in nature. (Ravi Ramesh Babu) Various courts, including the Hon'ble Supreme Court in the cases of M/s. Abdul Kayoom vs. CIT (1962) 44 ITR 689 and CIT vs. Ashok Leyland Ltd. (86 ITR 549), have held that there cannot be a hard and fast rule for determination of a capital or revenue expenditure. The nature of expenditure can only be determined from the actual facts of the case. In the appellants case, as borne out in the remand report, the E- Cards are nothing but transmission of money in different denominations, which can be used…

DCIT, Cir-4(1), Kolkata vs. M/S Engo Tea Company Ltd., Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 894/KOL/2015[2012-2013]Status: DisposedITAT Kolkata04 Aug 2017AY 2012-2013

Bench: Hon’Ble Shri N.V. Vasudevan, Jm & Shri M.Balaganesh, Am ] I.T.A No. 894/Kol/2015 Assessment Year : 2012-13 Dcit, Circle-4(1), Kolkata -Vs- M/S Engo Tea Company Ltd. [Pan: Aaace6393H] (Appellant) (Respondent)

For Appellant: Shri Sallong Yadav, Addl. CIT DRFor Respondent: Shri Sunil Surana, FCA
Section 143(3)

…from reiterating the submissions made before the Ld. AO placed reliance on certain decisions in support of its contentions. The Hon’ble Madras High Court in CIT vs. Ashok Leyland Limited reported in 72 ITR 137 (Mad) as affirmed by the Hon'ble Supreme Court in 86 ITR 549 (SC) has held that the word capital connotes permanency and capital expenditure is closely akin to the concept of securing something, tangible or intangible property, corporeal or incorporeal rights, so that they could be of a lasting or enduring benefit to the enterprise in issue. Revenue expenditure, on the other hand, is operational in its pers…

Stovec Industries Ltd, Gujrat vs. Addl CIT RG 2(3), Mumbai

The appeal of the AO is dismissed

ITA 2812/MUM/2013[2007-08]Status: DisposedITAT Mumbai24 Aug 2016AY 2007-08

Bench: S/Shri Rajendra & C.N. Prasadआयकर आयकर अपील अपील संसंसंसं./Ita/2812/Mum/2013,िनधा"रण िनधा"रण वष" वष" /Assessment Year: 2007-08 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" M/S. Stovec Industries Ltd. Addl.Cit, Range- 2(3) Room No.555, 5Th Floor Nidc, Nr. Lambha Village Post Narol, Ahmedabad Vs. Aayakar Bhavan Gujarat-382 405. Mumbai-20. Pan:Aabcs 7223 D आयकर आयकर आयकर अपील आयकर अपील अपील संसंसंसं./Ita/2449/Mum/2013,िनधा"रण अपील िनधा"रण िनधा"रण वष" िनधा"रण वष" वष" /Assessment Year: 2007-08 वष" Addl.Cit, Range- 2(3) M/S. Stovec Industries Ltd. Vs. Mumbai-20. Gujarat-382 405. (अपीलाथ" /Appellant) (""यथ" / Respondent) Revenue By:Shri N. Sathya Moorthy-Dr Assessee By: S/Shri Dhanesh Bafna & Ravi Sawana सुनवाई क" तारीख / Date Of Hearing: 11.07.2016 घोषणा क" तारीख / Date Of Pronouncement: 24.08.2016 आयकर अिधिनयम आयकर अिधिनयम,1961 क" क" धारा धारा 254(1)केकेकेके अ"तग"त अ"तग"त आदेश आदेश आयकर आयकर अिधिनयम अिधिनयम क" क" धारा धारा अ"तग"त अ"तग"त आदेश आदेश Order U/S.254(1)Of The Income-Tax Act,1961(Act) लेखा सद"य लेखा सद"य राजे"" राजे"" केकेकेके अनुसार अनुसार Per Rajendra, Am- लेखा लेखा सद"य सद"य राजे"" राजे"" अनुसार अनुसार Challenging The Order Dated 29.01.13 Of Cit(A)-6, Mumbai The Assessing Officer (Ao) & The Assessee Have Filed The Cross-Appeals For The Year Under Consideration.Assessee-Company, Engaged In The Business Of Manufacturing Of Rotary Screens Etc.Filed Its Return Of Income On 31. 10.2007,Declaring Income Of Rs.5.52 Crores. The Ao Completed The Assessment On 18.12.09 U/S. 143(3)Of The Act,Determining Income Of The Assessee At Rs.8,88,79,430/- .

For Appellant: S/Shri Dhanesh Bafna & Ravi SawanaFor Respondent: Shri N. Sathya Moorthy-DR
Section 143(3)Section 254(1)

…आयकर अपीलीय अिधकरण, मुंबई “ई” खंडपीठ Income-tax Appellate Tribunal -“E”Bench Mumbai सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"",लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं सी एवं सी सी. एन सी एन एन. "साद एन "साद "साद,"याियक "साद "याियक "याियक सद"य "याियक सद"य सद"य सद"य Before S/Shri Rajendra,Accountant Member and C.N. Prasad,Judicial Member आयकर आयकर अपील अपील संसंसंसं./ITA/2812/Mum/2013,िनधा"रण िनधा"रण वष" वष" /Assessment Year: 2007-08 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" M/s. Stovec Industries Ltd. Addl.CIT, Range- 2(3) Room No.555, 5th Floor NIDC, Nr. Lambha Village Post Narol, Ahmedabad…

ACIT 2(3), Mumbai vs. Stovec Industries Ltd, Ahemedabad

The appeal of the AO is dismissed

ITA 2449/MUM/2013[2007-08]Status: DisposedITAT Mumbai24 Aug 2016AY 2007-08

Bench: S/Shri Rajendra & C.N. Prasadआयकर आयकर अपील अपील संसंसंसं./Ita/2812/Mum/2013,िनधा"रण िनधा"रण वष" वष" /Assessment Year: 2007-08 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" M/S. Stovec Industries Ltd. Addl.Cit, Range- 2(3) Room No.555, 5Th Floor Nidc, Nr. Lambha Village Post Narol, Ahmedabad Vs. Aayakar Bhavan Gujarat-382 405. Mumbai-20. Pan:Aabcs 7223 D आयकर आयकर आयकर अपील आयकर अपील अपील संसंसंसं./Ita/2449/Mum/2013,िनधा"रण अपील िनधा"रण िनधा"रण वष" िनधा"रण वष" वष" /Assessment Year: 2007-08 वष" Addl.Cit, Range- 2(3) M/S. Stovec Industries Ltd. Vs. Mumbai-20. Gujarat-382 405. (अपीलाथ" /Appellant) (""यथ" / Respondent) Revenue By:Shri N. Sathya Moorthy-Dr Assessee By: S/Shri Dhanesh Bafna & Ravi Sawana सुनवाई क" तारीख / Date Of Hearing: 11.07.2016 घोषणा क" तारीख / Date Of Pronouncement: 24.08.2016 आयकर अिधिनयम आयकर अिधिनयम,1961 क" क" धारा धारा 254(1)केकेकेके अ"तग"त अ"तग"त आदेश आदेश आयकर आयकर अिधिनयम अिधिनयम क" क" धारा धारा अ"तग"त अ"तग"त आदेश आदेश Order U/S.254(1)Of The Income-Tax Act,1961(Act) लेखा सद"य लेखा सद"य राजे"" राजे"" केकेकेके अनुसार अनुसार Per Rajendra, Am- लेखा लेखा सद"य सद"य राजे"" राजे"" अनुसार अनुसार Challenging The Order Dated 29.01.13 Of Cit(A)-6, Mumbai The Assessing Officer (Ao) & The Assessee Have Filed The Cross-Appeals For The Year Under Consideration.Assessee-Company, Engaged In The Business Of Manufacturing Of Rotary Screens Etc.Filed Its Return Of Income On 31. 10.2007,Declaring Income Of Rs.5.52 Crores. The Ao Completed The Assessment On 18.12.09 U/S. 143(3)Of The Act,Determining Income Of The Assessee At Rs.8,88,79,430/- .

For Appellant: S/Shri Dhanesh Bafna & Ravi SawanaFor Respondent: Shri N. Sathya Moorthy-DR
Section 143(3)Section 254(1)

…आयकर अपीलीय अिधकरण, मुंबई “ई” खंडपीठ Income-tax Appellate Tribunal -“E”Bench Mumbai सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"",लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं सी एवं सी सी. एन सी एन एन. "साद एन "साद "साद,"याियक "साद "याियक "याियक सद"य "याियक सद"य सद"य सद"य Before S/Shri Rajendra,Accountant Member and C.N. Prasad,Judicial Member आयकर आयकर अपील अपील संसंसंसं./ITA/2812/Mum/2013,िनधा"रण िनधा"रण वष" वष" /Assessment Year: 2007-08 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" M/s. Stovec Industries Ltd. Addl.CIT, Range- 2(3) Room No.555, 5th Floor NIDC, Nr. Lambha Village Post Narol, Ahmedabad…