CIT v. Ashok Leyland Ltd.

349 ITR 663High Court2012#5609 most cited

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

Expenditure is capital in nature if it acquires an asset or right with a lasting or enduring benefit, distinguishing it from revenue expenditure which is operational and intended for furtherance of the enterprise.

21

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2015 to 2023.

Also referred to as

CIT v. Ashok Leyland Ltd. · capital expenditure · revenue expenditure · enduring benefit · permanent character · fixed capital · circulating capital · nature of business · nature of expenditure · right acquired

Issues it is cited on

related party transactionassociated enterprisessection 92cassociated enterprisedispute resolution panelsection 92international transactioncapital expendituresalarysection 80transferperson

Judgments citing CIT v. Ashok Leyland Ltd.

Tata Chemicals Ltd, Mumbai vs. Addl Ciat 2(3), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 120/MUM/2013[2008-09]Status: DisposedITAT Mumbai10 Nov 2023AY 2008-09

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 144C(5)Section 14ASection 43BSection 80

…business, the nature of the expenditure, the nature of the right acquired, and their relation inter se, and this is the only key to resolve the issue in the light of the general principles, which are followed in such cases.” 7. In the case reported in [1969] 72 ITR 137 (Mad)(CIT v. Ashok Leyland Ltd.) which was affirmed by the Supreme Court in [1972] 86 ITR 549 (CIT v. Ashok Leyland Ltd.), explaining the position of law, this court stated as follows (page 143): “The facts of each case, the attendant circumstances revolving around the expenditure, the aim, object and purpose of the same, their impact on the asses…

Madhucon Toll Highways Limited, Hyderabad vs. Asst. Commissioner of Income Tax, Circle-16(2), Hyderabad

ITA 1487/HYD/2018[2012-13]Status: DisposedITAT Hyderabad13 Apr 2022AY 2012-13

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahus.No.

For Appellant: Shri P. Murali Mohan RaoFor Respondent: Shri T. Sunil Goutam
Section 143(1)Section 143(3)Section 14ASection 35DSection 37

…hose specified in section 35D are incurred such as legal paid to ROC, professional consultation and share valuation expenses etc. For this proposition, he relied on the decision of the Hon’ble Madras High Court in the case of CIT Vs. Ashok Leyland Ltd. [2012] 349 ITR 663. 11.2 In view of the above observations, it is observed that the assessee has paid ROC fees to the…

Dy. Commissioner of Income Tax, Circle-16(2), Hyderabad vs. Madhucon Toll Highways Limited, Hyderabad

ITA 2100/HYD/2017[2012-13]Status: DisposedITAT Hyderabad13 Apr 2022AY 2012-13

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahus.No.

For Appellant: Shri P. Murali Mohan RaoFor Respondent: Shri T. Sunil Goutam
Section 143(1)Section 143(3)Section 14ASection 35DSection 37

…hose specified in section 35D are incurred such as legal paid to ROC, professional consultation and share valuation expenses etc. For this proposition, he relied on the decision of the Hon’ble Madras High Court in the case of CIT Vs. Ashok Leyland Ltd. [2012] 349 ITR 663. 11.2 In view of the above observations, it is observed that the assessee has paid ROC fees to the…

M/S Subex Ltd vs. The Commissioner of Income Tax-III

In the result, appeal is partly allowed as indicated

ITA/378/2015HC Karnataka01 Oct 2021

Bench: S.SUJATHA,RAVI V HOSMANI

Section 143Section 154Section 200Section 260Section 263Section 35D

…IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 01ST DAY OF OCTOBER, 2021 PRESENT THE HON’BLE MRS.JUSTICE S.SUJATHA AND THE HON’BLE MR. JUSTICE RAVI V. HOSMANI I.T.A.No.378/2015 BETWEEN : M/s SUBEX LTD., RMZ ECOWORLD DEVARABISANAHALLI, OUTER RING ROAD, BENGALURU-560 037 REP BY ITS MANAGING DIRECTOR, SRI SURJEET SINGH, S/O SRI THAKUR SINGH AGED ABOUT 47 YEARS ...APPELLANT (BY SRI CHYTHANYA K.K., ADV.) AND : THE COMMISSIONER OF INCOME TAX-III, C.R.BUILDING, 1ST FLOOR, QUEEN’S ROAD, BENGALURU-560 001 …RESPONDENT (BY SRI JEEVAN J. NE…

M/S Subex Ltd vs. The Additional Commissioner of Income Tax

Appeal stands dismissed

ITA/394/2016HC Karnataka01 Oct 2021

Bench: S.SUJATHA,RAVI V HOSMANI

Section 10ASection 260Section 35D

…378/2015 wherein this substantial question of law is answered against the assessee and in favour of the Revenue. The relevant paragraphs of which reads thus: “21. In the case of Commissioner of Income-tax V/s. Ashok Leyland Ltd., [and vice versa] [(2012) 349 ITR 663], Hon’ble Madras High Court has considered the meaning of the phrase “being” and declared that the expenditure that qualified for consideration under Section 35D is restricted by reason of use of phrase “being”. Thus, expenditure incurred in connection with issue of shares and debentures of the company to public subscription,…

Alcatel Lucent India Ltd., Gurgaon vs. DCIT, New Delhi

In the result, both the appeals of the assessee are allowed

ITA 5554/DEL/2011[2007-08]Status: HeardITAT Delhi16 Aug 2021AY 2007-08

Bench: Sh. Amit Shukladr. B. R. R. Kumar

For Appellant: Sh. Nageshwar Rao, AdvFor Respondent: Sh. Surenderpal, CIT DR
Section 10ASection 133(6)Section 143(3)Section 920(3)Section 92D

…e business or a part of its circulating capital. AO held that the enduring benefit or the permanent character means acquisition of the assets or the right having enough durability. A division Bench of the Madras High Court in CIT Vs Ashok Leyland Ltd. (1969) 72 ITR 137 has ruled that the word capital connotes permanency and capital expenditure and capital expenditure includes securing tangible and intangible property, so long as there is lasting or enduring benefit, as against a revenue expenditure which is operational in its perspective and is solely intended for furtherance of the Alcatel Lucent India Ltd. ent…

Alcatel Lucent India Ltd., Gurgaon vs. DCIT, New Delhi

In the result, both the appeals of the assessee are allowed

ITA 5553/DEL/2011[2007-08]Status: HeardITAT Delhi16 Aug 2021AY 2007-08

Bench: Sh. Amit Shukladr. B. R. R. Kumar

For Appellant: Sh. Nageshwar Rao, AdvFor Respondent: Sh. Surenderpal, CIT DR
Section 10ASection 133(6)Section 143(3)Section 920(3)Section 92D

…e business or a part of its circulating capital. AO held that the enduring benefit or the permanent character means acquisition of the assets or the right having enough durability. A division Bench of the Madras High Court in CIT Vs Ashok Leyland Ltd. (1969) 72 ITR 137 has ruled that the word capital connotes permanency and capital expenditure and capital expenditure includes securing tangible and intangible property, so long as there is lasting or enduring benefit, as against a revenue expenditure which is operational in its perspective and is solely intended for furtherance of the Alcatel Lucent India Ltd. ent…

Walvoil Fluid Power India Private Ltd, Bangalore vs. DCIT, Bangalore

In the result, the appeals filed by the assessee are partly allowed for statistical purposes

ITA 685/BANG/2016[2011-12]Status: DisposedITAT Bangalore18 Feb 2020AY 2011-12

Bench: Shri Chandra Poojari, Am &Smt.Beena Pillai, Jm

For Appellant: Sri.R.E.Balasubramaniyam, CAFor Respondent: Sri.Muzaffar Hussain, CIT-DR&
Section 143(3)

…rports to tax is the business profits, and therefore, in determining the deduction, the Assessing Officer cannot ignore the normal rules of accountancy and business principles. All these views were considered by the Court in the CIT V Ashok Leyland Ltd (1969) 72 ITR 137 wherein it was observed as follows: “A clear cut dichotomy cannot be laid down in the absence of a statutory definition of 'capital and revenue expenditure'. Invariably, it has to be considered from the point of view of the payer. In the ultimate analysis, the conclusion of the admissibility of an allowance claimed is one of law, if not a mixed q…

Walvoil Fluid Power (India) Private Ltd, Bangalore vs. Dy.CIT of Income Tax, Bangalore

In the result, the appeals filed by the assessee are partly allowed for statistical purposes

ITA 1892/BANG/2016[2010-11]Status: DisposedITAT Bangalore18 Feb 2020AY 2010-11

Bench: Shri Chandra Poojari, Am &Smt.Beena Pillai, Jm

For Appellant: Sri.R.E.Balasubramaniyam, CAFor Respondent: Sri.Muzaffar Hussain, CIT-DR&
Section 143(3)

…rports to tax is the business profits, and therefore, in determining the deduction, the Assessing Officer cannot ignore the normal rules of accountancy and business principles. All these views were considered by the Court in the CIT V Ashok Leyland Ltd (1969) 72 ITR 137 wherein it was observed as follows: “A clear cut dichotomy cannot be laid down in the absence of a statutory definition of 'capital and revenue expenditure'. Invariably, it has to be considered from the point of view of the payer. In the ultimate analysis, the conclusion of the admissibility of an allowance claimed is one of law, if not a mixed q…

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)

…eturned income. 4. Before the Ld. CIT(A) the assessee apart 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. Reven…

M/S. Chiranjeevi Wind Energy Ltd., Chennai vs. DCIT, Coimbatore

In the result, the appeal of the assessee in ITA No

ITA 2468/CHNY/2016[2011-12]Status: DisposedITAT Chennai10 Jul 2017AY 2011-12

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

For Respondent: Shri R. Vijayaraghavan, Advocate
Section 143(3)Section 32(1)(iia)Section 35DSection 41Section 41(1)

…f the Ld.AO may be reinstated. 6.3 The Ld.AR on the other hand relied on the order of the Ld.CIT(A) and decision of the Hon’ble Jurisdictional High Court ITA Nos.2324 & 2468/Mds/2016 in the case EIP India Ltd vs. DCIT reported in 209 taxmann 214 reported in 349 ITR 663, wherein it was held that the expenditure incurred towards raising of additional equity shares by private placement can be attributable to extension of undertaking and is thus eligible for amortization under the provisions of Section 35D of the Act. 6.4 We have heard the rival submissions and carefully perused the materials on record. The mo…

DCIT, Coimbatore vs. M/S. Chiranjeevi Wind Energy Ltd., Coimbatore

In the result, the appeal of the assessee in ITA No

ITA 2324/CHNY/2016[2011-12]Status: DisposedITAT Chennai10 Jul 2017AY 2011-12

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

For Respondent: Shri R. Vijayaraghavan, Advocate
Section 143(3)Section 32(1)(iia)Section 35DSection 41Section 41(1)

…f the Ld.AO may be reinstated. 6.3 The Ld.AR on the other hand relied on the order of the Ld.CIT(A) and decision of the Hon’ble Jurisdictional High Court ITA Nos.2324 & 2468/Mds/2016 in the case EIP India Ltd vs. DCIT reported in 209 taxmann 214 reported in 349 ITR 663, wherein it was held that the expenditure incurred towards raising of additional equity shares by private placement can be attributable to extension of undertaking and is thus eligible for amortization under the provisions of Section 35D of the Act. 6.4 We have heard the rival submissions and carefully perused the materials on record. The mo…

Chiranjeevi Wind Energy Ltd., Chennai vs. DCIT, Coimbatore

In the result, the appeal of the assessee in ITA No

ITA 442/CHNY/2015[2010-11]Status: DisposedITAT Chennai10 Jul 2017AY 2010-11

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

For Respondent: Shri R. Vijayaraghavan, Advocate
Section 143(3)Section 32(1)(iia)Section 35DSection 41Section 41(1)

…f the Ld.AO may be reinstated. 6.3 The Ld.AR on the other hand relied on the order of the Ld.CIT(A) and decision of the Hon’ble Jurisdictional High Court ITA Nos.2324 & 2468/Mds/2016 in the case EIP India Ltd vs. DCIT reported in 209 taxmann 214 reported in 349 ITR 663, wherein it was held that the expenditure incurred towards raising of additional equity shares by private placement can be attributable to extension of undertaking and is thus eligible for amortization under the provisions of Section 35D of the Act. 6.4 We have heard the rival submissions and carefully perused the materials on record. The mo…

DCIT, Coimbatore vs. Chiranjjeevi Wind Energy Ltd., Coimbatore

In the result, the appeal of the assessee in ITA No

ITA 319/CHNY/2015[2010-11]Status: DisposedITAT Chennai10 Jul 2017AY 2010-11

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

For Respondent: Shri R. Vijayaraghavan, Advocate
Section 143(3)Section 32(1)(iia)Section 35DSection 41Section 41(1)

…f the Ld.AO may be reinstated. 6.3 The Ld.AR on the other hand relied on the order of the Ld.CIT(A) and decision of the Hon’ble Jurisdictional High Court ITA Nos.2324 & 2468/Mds/2016 in the case EIP India Ltd vs. DCIT reported in 209 taxmann 214 reported in 349 ITR 663, wherein it was held that the expenditure incurred towards raising of additional equity shares by private placement can be attributable to extension of undertaking and is thus eligible for amortization under the provisions of Section 35D of the Act. 6.4 We have heard the rival submissions and carefully perused the materials on record. The mo…

Ashok Leyland Ltd., Chennai vs. DCIT, Chennai

In the result, the appeal of the Revenue in ITA

ITA 2834/CHNY/2014[1995-96]Status: DisposedITAT Chennai23 Sept 2016AY 1995-96

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A. Nos.2825, 2826 & 2827/Mds/2014 "नधा"रण वष" /Assessment Years : 2005-06, 2006-07 & 2007-2008. The Deputy Commissioner Of M/S. Ashok Leyland Ltd, Income Tax, Vs. No.1, Sardar Patel Road, Large Taxpayer Unit -Ii, Guindy, Chennai 600 101. Chennai 600 032. [Pan Aaaca 4651L] (Department) (Assessee )

For Appellant: Shri. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri. Arun C. Bharath, IRS, CIT
Section 35D(2)Section 35D(2)(c)

…led an appeal before CIT(A). 3.3 In the appellate proceedings, the ld. Commissioner of Income Tax (Appeals) observed that in view of the judgement of Madras ITA Nos.2825 to 2827, 2834 :- 7 -: to 2839/Mds/2014. High Court in assessee’s own case reported in 349 ITR 663, the assessee is entitled for deduction u/s. 35D(2)(c)(iv) of the Act in respect of following expenditure only:- (a) Underwriting Commission. (b) Brokerage and (c) Charges for drafting, typing, printing and advertisement of the prospectus. However, the assessee is not entitled for management commission paid by the assessee since the assessee…

DCIT, Chennai vs. Ashok Leyland Ltd., Chennai

In the result, the appeal of the Revenue in ITA

ITA 2827/CHNY/2014[2007-08]Status: DisposedITAT Chennai23 Sept 2016AY 2007-08

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A. Nos.2825, 2826 & 2827/Mds/2014 "नधा"रण वष" /Assessment Years : 2005-06, 2006-07 & 2007-2008. The Deputy Commissioner Of M/S. Ashok Leyland Ltd, Income Tax, Vs. No.1, Sardar Patel Road, Large Taxpayer Unit -Ii, Guindy, Chennai 600 101. Chennai 600 032. [Pan Aaaca 4651L] (Department) (Assessee )

For Appellant: Shri. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri. Arun C. Bharath, IRS, CIT
Section 35D(2)Section 35D(2)(c)

…led an appeal before CIT(A). 3.3 In the appellate proceedings, the ld. Commissioner of Income Tax (Appeals) observed that in view of the judgement of Madras ITA Nos.2825 to 2827, 2834 :- 7 -: to 2839/Mds/2014. High Court in assessee’s own case reported in 349 ITR 663, the assessee is entitled for deduction u/s. 35D(2)(c)(iv) of the Act in respect of following expenditure only:- (a) Underwriting Commission. (b) Brokerage and (c) Charges for drafting, typing, printing and advertisement of the prospectus. However, the assessee is not entitled for management commission paid by the assessee since the assessee…

DCIT, Chennai vs. Ashok Leyland Ltd., Chennai

In the result, the appeal of the Revenue in ITA

ITA 2825/CHNY/2014[2005-06]Status: DisposedITAT Chennai23 Sept 2016AY 2005-06

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A. Nos.2825, 2826 & 2827/Mds/2014 "नधा"रण वष" /Assessment Years : 2005-06, 2006-07 & 2007-2008. The Deputy Commissioner Of M/S. Ashok Leyland Ltd, Income Tax, Vs. No.1, Sardar Patel Road, Large Taxpayer Unit -Ii, Guindy, Chennai 600 101. Chennai 600 032. [Pan Aaaca 4651L] (Department) (Assessee )

For Appellant: Shri. Vikram Vijayaraghavan, AdvocateFor Respondent: Shri. Arun C. Bharath, IRS, CIT
Section 35D(2)Section 35D(2)(c)

…led an appeal before CIT(A). 3.3 In the appellate proceedings, the ld. Commissioner of Income Tax (Appeals) observed that in view of the judgement of Madras ITA Nos.2825 to 2827, 2834 :- 7 -: to 2839/Mds/2014. High Court in assessee’s own case reported in 349 ITR 663, the assessee is entitled for deduction u/s. 35D(2)(c)(iv) of the Act in respect of following expenditure only:- (a) Underwriting Commission. (b) Brokerage and (c) Charges for drafting, typing, printing and advertisement of the prospectus. However, the assessee is not entitled for management commission paid by the assessee since the assessee…

ACIT, Chennai vs. Thiru Arooran Sugars Limited, Chennai

In the result, the appeals of the assessee are partly

ITA 1559/CHNY/2015[2011-12]Status: DisposedITAT Chennai18 Dec 2015AY 2011-12

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…decisions relied by the assessee and confirmed the order of the Assessing Officer. It is apparent on the facts of the case and type of expenditure being Revenue in nature and rely on jurisdictional High Court decision in the case of CIT vs. Ashok Leyland Ltd 349 ITR 663(Mad) where the lordship observed at page 671 as under:- ‘’In the light of the law thus declared as the meaning of the phrase "being", we have no hesitation in holding that the expenditure that qualified for consideration under section 35D is restricted by reason of use of the phrase "being". Thus, expenditure incurred in connection with the iss…

Thiru Arooran Sugars Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee are partly

ITA 1348/CHNY/2015[2005-06]Status: DisposedITAT Chennai18 Dec 2015AY 2005-06

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…decisions relied by the assessee and confirmed the order of the Assessing Officer. It is apparent on the facts of the case and type of expenditure being Revenue in nature and rely on jurisdictional High Court decision in the case of CIT vs. Ashok Leyland Ltd 349 ITR 663(Mad) where the lordship observed at page 671 as under:- ‘’In the light of the law thus declared as the meaning of the phrase "being", we have no hesitation in holding that the expenditure that qualified for consideration under section 35D is restricted by reason of use of the phrase "being". Thus, expenditure incurred in connection with the iss…

Thiru Arooran Sugars Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee are partly

ITA 1347/CHNY/2015[2000-01]Status: DisposedITAT Chennai18 Dec 2015AY 2000-01

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…decisions relied by the assessee and confirmed the order of the Assessing Officer. It is apparent on the facts of the case and type of expenditure being Revenue in nature and rely on jurisdictional High Court decision in the case of CIT vs. Ashok Leyland Ltd 349 ITR 663(Mad) where the lordship observed at page 671 as under:- ‘’In the light of the law thus declared as the meaning of the phrase "being", we have no hesitation in holding that the expenditure that qualified for consideration under section 35D is restricted by reason of use of the phrase "being". Thus, expenditure incurred in connection with the iss…

CIT v. Ashok Leyland Ltd. (349 ITR 663) — Cited in 21 Judgments | BharatTax