CIT v. Colgate Palmolive (India) Ltd.

370 ITR 728High Court2015#3584 most cited

What is CIT v. Colgate Palmolive (India) Ltd. authority for?

Investment in a subsidiary is considered a business expenditure if made for commercial expediency and to further business objectives, and any resulting loss is treated as a business loss.

33

judgments rely on this decision, according to BharatTax’s citation analysis of 366,315 Indian tax judgments — from 2015 to 2025.

Also referred to as

CIT v. Colgate Palmolive (India) Ltd. · business loss · investment in subsidiary · commercial expediency · business operations · section 37 · section 28

Sections most often in play

Section 115JBSection 142(1)Section 143(2)Section 14ASection 36(1)(iii)Section 37Section 43CASection 68

Issues it is cited on

section 2(19aa)section 72asection 36(2)section 43castrategic investmenttransfer of capital assetinterest free advancesbusiness expediencyenduring benefitdemergersection 10(34)source of source

Judgments citing CIT v. Colgate Palmolive (India) Ltd.

Asst. Commissioner of Income Tax Central Circle 2(3) Mumbai, Mumbai vs. Indusind Media and Communication Ltd, Mumbai

ITA 3945/MUM/2025[2020-21]Status: DisposedITAT Mumbai16 Dec 2025AY 2020-21

Bench: Ms. Suchitra Raghunath Kamble & Shri Girish Agrawal

Section 143(3)Section 195Section 36(1)(vii)Section 36(2)Section 40Section 9(1)(vi)

…r an expenditure u/s.37 is rightfully justified, since conditions for allowance under the said section stand satisfied. We find force from the decision Hon'ble Jurisdictional High Court of Bombay in the case of CIT vs. Colgate Palmolive (India) Limited [2015[ 370 ITR 728 (Bom), wherein it held that investment made by the assessee in its subsidiary is nothing but measure of commercial expediency to further business objective and primarily related to the business operation of the assessee. At no point of time, the investment in subsidiary was made with an intention to realize any enhancement value thereof or to ear…

Income Tax Officer-Ward-6(3)(1), Mumbai vs. Kohinoor Planet Constructions Pvt. Ltd., Mumbai

In the result, the appeal filed by the revenue is partly allowed for statistical purpose

ITA 1495/MUM/2024[2017-18]Status: DisposedITAT Mumbai29 Apr 2025AY 2017-18

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am & Kohinoor Planet Constructions Pvt. Assistant Commissioner Of Income Ltd. Tax, Circle 6(3)(1) 506, 5Th Floor, Aayakar Bhavan, Kohinoor Corporate Office, Senapati Vs. Bapat Marg, Dadar West, Mumbai – Maharishi Karve Road, Mumbai – 400028. 400020. Pan/Gir No. Aabcr6994E (Assessee) : (Respondent) & Income Tax Officer, Ward-6(3)(1) Kohinoor Planet Constructions Room No. 524, 5Th Floor, Aayakar Pvt. Ltd. Bhavan, M. K. Road, Mumbai – 3, Kohinoor Corporate Office, Vs. 400020. Senapati Bapat Marg, Dadar West, Mumbai – 400028. Pan/Gir No. Aabcr6994E (Assessee) : (Respondent) Assessee By : Shri. Jayesh Dadia : Shri. Biswanath Das – Cit Dr. Respondent By : 30.01.2025 Date Of Hearing Date Of Pronouncement : 29.04.2025 O R D E R Per Bench: These Are Cross Appeals Filed By The Assessee & Revenue, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals) Delhi (‘Ld. Cit(A)’ For Short)

For Appellant: Shri. Jayesh DadiaFor Respondent: 30.01.2025
Section 143(2)Section 143(3)Section 250Section 36(2)Section 37Section 43CSection 68

…total income of the assessee. In an appeal preferred before the ld. CIT(A), the same was held to be a business loss by relying on the various decisions of the Hon'ble Jurisdictional High Court viz. in the case of CIT vs. Colgate Palmolive (India) Ltd. [2015] 370 ITR 728 (Bom) and Hon'ble Karnataka High Court decision in the case of ACE Designers Ltd. vs. Additional Commissioner of Income Tax [2020] 120 taxmann.com 321 (Karnataka). ITA No. 1158, 1493 & 1495/Mum/2024 (A.Y. 2016-17 & 2017-18) Kohinoor Planet Constructions Pvt. Ltd. 21. Aggrieved the revenue is in appeal before us challenging the said ground. 22. T…

Income Tax Officer Ward-6(3)(1), Mumbai vs. Kohinoor Planet Constructions Private Limited, Mumbai

In the result, the appeal filed by the revenue is partly allowed for statistical purpose

ITA 1493/MUM/2024[2016-17]Status: DisposedITAT Mumbai29 Apr 2025AY 2016-17

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am & Kohinoor Planet Constructions Pvt. Assistant Commissioner Of Income Ltd. Tax, Circle 6(3)(1) 506, 5Th Floor, Aayakar Bhavan, Kohinoor Corporate Office, Senapati Vs. Bapat Marg, Dadar West, Mumbai – Maharishi Karve Road, Mumbai – 400028. 400020. Pan/Gir No. Aabcr6994E (Assessee) : (Respondent) & Income Tax Officer, Ward-6(3)(1) Kohinoor Planet Constructions Room No. 524, 5Th Floor, Aayakar Pvt. Ltd. Bhavan, M. K. Road, Mumbai – 3, Kohinoor Corporate Office, Vs. 400020. Senapati Bapat Marg, Dadar West, Mumbai – 400028. Pan/Gir No. Aabcr6994E (Assessee) : (Respondent) Assessee By : Shri. Jayesh Dadia : Shri. Biswanath Das – Cit Dr. Respondent By : 30.01.2025 Date Of Hearing Date Of Pronouncement : 29.04.2025 O R D E R Per Bench: These Are Cross Appeals Filed By The Assessee & Revenue, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals) Delhi (‘Ld. Cit(A)’ For Short)

For Appellant: Shri. Jayesh DadiaFor Respondent: 30.01.2025
Section 143(2)Section 143(3)Section 250Section 36(2)Section 37Section 43CSection 68

…total income of the assessee. In an appeal preferred before the ld. CIT(A), the same was held to be a business loss by relying on the various decisions of the Hon'ble Jurisdictional High Court viz. in the case of CIT vs. Colgate Palmolive (India) Ltd. [2015] 370 ITR 728 (Bom) and Hon'ble Karnataka High Court decision in the case of ACE Designers Ltd. vs. Additional Commissioner of Income Tax [2020] 120 taxmann.com 321 (Karnataka). ITA No. 1158, 1493 & 1495/Mum/2024 (A.Y. 2016-17 & 2017-18) Kohinoor Planet Constructions Pvt. Ltd. 21. Aggrieved the revenue is in appeal before us challenging the said ground. 22. T…

Kohinoor Planet Constructions Private Limited, Mumbai vs. Assistant Commissioner of Income Tax Circle 6(3)(2), Mumbai

In the result, the appeal filed by the revenue is partly allowed for statistical purpose

ITA 1159/MUM/2024[AY 2016-17]Status: DisposedITAT Mumbai29 Apr 2025

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am & Kohinoor Planet Constructions Pvt. Assistant Commissioner Of Income Ltd. Tax, Circle 6(3)(1) 506, 5Th Floor, Aayakar Bhavan, Kohinoor Corporate Office, Senapati Vs. Bapat Marg, Dadar West, Mumbai – Maharishi Karve Road, Mumbai – 400028. 400020. Pan/Gir No. Aabcr6994E (Assessee) : (Respondent) & Income Tax Officer, Ward-6(3)(1) Kohinoor Planet Constructions Room No. 524, 5Th Floor, Aayakar Pvt. Ltd. Bhavan, M. K. Road, Mumbai – 3, Kohinoor Corporate Office, Vs. 400020. Senapati Bapat Marg, Dadar West, Mumbai – 400028. Pan/Gir No. Aabcr6994E (Assessee) : (Respondent) Assessee By : Shri. Jayesh Dadia : Shri. Biswanath Das – Cit Dr. Respondent By : 30.01.2025 Date Of Hearing Date Of Pronouncement : 29.04.2025 O R D E R Per Bench: These Are Cross Appeals Filed By The Assessee & Revenue, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals) Delhi (‘Ld. Cit(A)’ For Short)

For Appellant: Shri. Jayesh DadiaFor Respondent: 30.01.2025
Section 143(2)Section 143(3)Section 250Section 36(2)Section 37Section 43CSection 68

…total income of the assessee. In an appeal preferred before the ld. CIT(A), the same was held to be a business loss by relying on the various decisions of the Hon'ble Jurisdictional High Court viz. in the case of CIT vs. Colgate Palmolive (India) Ltd. [2015] 370 ITR 728 (Bom) and Hon'ble Karnataka High Court decision in the case of ACE Designers Ltd. vs. Additional Commissioner of Income Tax [2020] 120 taxmann.com 321 (Karnataka). ITA No. 1158, 1493 & 1495/Mum/2024 (A.Y. 2016-17 & 2017-18) Kohinoor Planet Constructions Pvt. Ltd. 21. Aggrieved the revenue is in appeal before us challenging the said ground. 22. T…

Kohinoor Planet Constructions Private Limited, Mumbai vs. Assistant Commissioner of Income Tax Circle 6(3)(1), Mumbai

In the result, the appeal filed by the revenue is partly allowed for statistical purpose

ITA 1158/MUM/2024[AY 2017-18]Status: DisposedITAT Mumbai29 Apr 2025

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am & Kohinoor Planet Constructions Pvt. Assistant Commissioner Of Income Ltd. Tax, Circle 6(3)(1) 506, 5Th Floor, Aayakar Bhavan, Kohinoor Corporate Office, Senapati Vs. Bapat Marg, Dadar West, Mumbai – Maharishi Karve Road, Mumbai – 400028. 400020. Pan/Gir No. Aabcr6994E (Assessee) : (Respondent) & Income Tax Officer, Ward-6(3)(1) Kohinoor Planet Constructions Room No. 524, 5Th Floor, Aayakar Pvt. Ltd. Bhavan, M. K. Road, Mumbai – 3, Kohinoor Corporate Office, Vs. 400020. Senapati Bapat Marg, Dadar West, Mumbai – 400028. Pan/Gir No. Aabcr6994E (Assessee) : (Respondent) Assessee By : Shri. Jayesh Dadia : Shri. Biswanath Das – Cit Dr. Respondent By : 30.01.2025 Date Of Hearing Date Of Pronouncement : 29.04.2025 O R D E R Per Bench: These Are Cross Appeals Filed By The Assessee & Revenue, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals) Delhi (‘Ld. Cit(A)’ For Short)

For Appellant: Shri. Jayesh DadiaFor Respondent: 30.01.2025
Section 143(2)Section 143(3)Section 250Section 36(2)Section 37Section 43CSection 68

…total income of the assessee. In an appeal preferred before the ld. CIT(A), the same was held to be a business loss by relying on the various decisions of the Hon'ble Jurisdictional High Court viz. in the case of CIT vs. Colgate Palmolive (India) Ltd. [2015] 370 ITR 728 (Bom) and Hon'ble Karnataka High Court decision in the case of ACE Designers Ltd. vs. Additional Commissioner of Income Tax [2020] 120 taxmann.com 321 (Karnataka). ITA No. 1158, 1493 & 1495/Mum/2024 (A.Y. 2016-17 & 2017-18) Kohinoor Planet Constructions Pvt. Ltd. 21. Aggrieved the revenue is in appeal before us challenging the said ground. 22. T…

ACIT Circle 5(1)(1), Mumbai vs. M/S Essar Shipping Limited, Mumbai

In the result, appeal filed by the learned AO is dismissed

ITA 2951/MUM/2022[2015-2016]Status: DisposedITAT Mumbai09 Jan 2024AY 2015-2016

Bench: Shri Prashant Maharishi, Am & Shri Narender Kumar Choudhry, Jm M/S Essar Shipping Limited Acit, Circle 5(1)(1) Essar House, 11, R.No.568, Aaykar Bhavan, Vs. Kk Marg, Mahalaxmi, M.K. Road, Mumbai-400 020 Mumbai-400 034 (Appellant) (Respondent) Pan No. Aacce3707D

For Appellant: Shri Rishav Patawari, ARFor Respondent: Shri Manoj Sinha, CIT DR
Section 115VSection 143Section 144CSection 28Section 43Section 92Section 92CSection 92F

…IN THE INCOME TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI NARENDER KUMAR CHOUDHRY, JM M/s Essar Shipping Limited ACIT, Circle 5(1)(1) Essar House, 11, r.no.568, Aaykar Bhavan, Vs. KK Marg, Mahalaxmi, M.K. Road, Mumbai-400 020 Mumbai-400 034 (Appellant) (Respondent) PAN No. AACCE3707D Assessee by : Shri Rishav Patawari, AR Revenue by : Shri Manoj Sinha, CIT DR Date of hearing: 20.10.2023 Date of pronouncement : 09.01.2024 O R D E R PER PRASHANT MAHARISHI, AM: 01. This appeal is filed by The Assistant Commissioner Of Income Tax, Circle – 5 (1) (1), Mumbai (The Learned AO)…

Electronica Machine Tools Limited, Pune vs. Deputy Commissioner of Income Tax, Central Circle-1(1), Pune

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

ITA 351/PUN/2023[2013-14]Status: DisposedITAT Pune20 Sept 2023AY 2013-14
For Appellant: Shri Suhas B Bora, CAFor Respondent: Shri Keyur Patel, CIT-DR
Section 14ASection 35(1)Section 37Section 37(1)

…mentary evidence is filed in support of the assessee‟s case. The facts brought on record by the Revenue stands unaltered. The assessee has also relied on the judgment of the Hon'ble Bombay High Court in the case of CIT v. Colgate Palmolive (India) Ltd. [2015] 370 ITR 728. This decision is also substantially different in facts from the case of the assessee since in this referred judgment, the facts are that AO noted that the assessee claimed deduction on account of loss on sale of shares. However, in the case at hand, it is not the case of sale of shares, hence, this decision cannot be applied to the facts of the…

Orchasp Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle-1(2), Hyderabad

In the result, the Tax Case Appeals are dismissed and the substantial questions of law are answered against the Revenue

ITA 182/HYD/2022[2011-12]Status: DisposedITAT Hyderabad20 Apr 2023AY 2011-12

Bench: Shri R.K. Panda & Shri K. Narasimha Charyassessment Year: 2011-12 Orchasp Limited Vs. Dy. Cit Hyderabad Circle 1(2) Pan:Aabcc4776F Hyderabad (Appellant) (Respondent) Assessee By: Shri P. Murali Mohan Rao, Ca Revenue By: Shri B. Yadagiri, Dr Date Of Hearing: 13/04/2023 Date Of Pronouncement: 20/04/2023 Order Per R.K. Panda, A.M This Appeal Filed By The Assessee Is Directed Against The Order Dated 23/03/2022 Of The Learned Cit (A)- Nfac, Relating To A.Y. 2011-12. 2. The Grounds Raised By The Assessee Are As Under: “1. On The Facts & In The Circumstances Of The Case The Appellate Order Passed By The Cit(A) Is Erroneous Both On Facts & In Law To The Extent The Order Is Prejudicial To The Interest Of The Appellant. 2. The Cit(A) Ought To Have Appreciated The Fact That The Amount Of Investment Made Is Completely In Wholly Owned Subsidiary Company Which Is Revenue In Nature & Not A Capital Expenditure. 3. The Ld. Cit(A) Ought To Have Accepted The Investments Written Off Of Rs.3,60,72,141/- Since The Said Amount Was Not Received From The Third Party To The Subsidiary & Thus, The Same Amount Was Written Off By The Virtue Of The Circular No. 69 Dt. 27-07-2011 Issued By Rbi.

For Appellant: Shri P. Murali Mohan Rao, CAFor Respondent: Shri B. Yadagiri, DR
Section 143(2)Section 271(1)(c)Section 37Section 37(1)

…lized and investments written off in each year from financial year 1990- 2000 to 2013-14. Page 5 of 15 ITA 182 of 2022 Orchasp Ltd 9. Referring to the decision of the Hon'ble Bombay High Court in the case of CIT vs. Colgate Palmolive (India) Ltd reported in 370 ITR 728 (Bom.), he submitted that the Hon'ble High Court observed that where the assessee company made investment in its 100 per cent subsidiary for business purpose, loss on sale of investment was to be treated as business loss of assessee. 10. Referring to the decision of the Hon'ble Karnataka High Court in the case of ACE Designers Ltd vs. Addl. CIT…

Jakhau Salt Company P Ltd., Chennai vs. DCIT, Corporate Circle-1(1), Chennai

In the result, appeal filed by the assessee is allowed

ITA 367/CHNY/2022[2017-18]Status: DisposedITAT Chennai24 Feb 2023AY 2017-18

Bench: Shri Mahavir Singh, Hon’Ble & Shri Manjunatha.G, Hon’Bleआयकरअपीलसं./Ita No.367/Chny/2022 िनधा"रणवष"/Assessment Year: 2017-18 V. M/S. Jakhau Salt Co. P. Ltd., The Dy. Commissioner – No.2, North Crescent Road, Of Income Tax, T. Nagar, Chennai-600 017. Corporate Circle-1(1), Chennai. [Pan:Aaacw 0867 G] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/ Appellant By : Mr.S.Sridhar, Adv. ""यथ" क" ओर से /Respondent By : Mr.S. Senthil Kumaran, Cit : सुनवाईक"तारीख/Date Of Hearing 09.01.2023 : घोषणाक"तारीख /Date Of Pronouncement 24.02.2023

For Appellant: Mr.S.Sridhar, AdvFor Respondent: Mr.S. Senthil Kumaran, CIT
Section 143(3)Section 263

…any gains/losses arising on the said investments should be dealt under the head 'Profits and Gains from the Business or Profession'. The well celebrated judgement of the Hon'ble Bombay High Court in the case of CIT vs. Colgate Palmolive (India) Limited [2015] 370 ITR 728 (Bom.) is relevant for our discussion." 6.3The assessee's submissions have been considered. It is established in law thatthe treatment as per Company Law or Accounting Standards cannot determine the treatment under the Income Tax Act. To that extent the decision of the Apex Court in :: 6 :: the case of Kedarnath Jute Mfg. Co. LTd Vs. CIT (1971)…

Dy CIT CC-1(4), Mumbai vs. M/S Grasim Industries Ltd., Mumbai

ITA 41/MUM/2021[2018-19]Status: DisposedITAT Mumbai30 Nov 2022AY 2018-19

Bench: Shri Prashant Maharishi, Am & Shri Pavan Kumar Gadale, Jm

For Appellant: Shri. J.D Mistry, Sr. AdvFor Respondent: Shri Anil Singh
Section 115OSection 115QSection 2

…uch a company is justified for pure commercial considerations, and, therefore, loss on sale of such shares is admissible as business losses…………. (Emphasis supplied) c) The aforesaid decision has been upheld by the Hon‘ble Jurisdictional High Court reported in 370 ITR 728 (Para 7 to 9, Pg. 138, Pg. 136-139 of Legal Paper Book, Vol. I). Wherein the Court observed as under: “7. The Commissioner and the Tribunal concurrently found that the Camelot was fully owned subsidiary of the assessee and engaged in the manufacturing of toothbrushes exclusively for the sole client, namely, the assessee. Shares purchased of Came…

Grasim Industries Ltd., Mumbai vs. Dy CIT, Central Circle-1(4), Mumbai

ITA 1935/MUM/2020[2018-19]Status: DisposedITAT Mumbai30 Nov 2022AY 2018-19

Bench: Shri Prashant Maharishi, Am & Shri Pavan Kumar Gadale, Jm

For Appellant: Shri. J.D Mistry, Sr. AdvFor Respondent: Shri Anil Singh
Section 115OSection 115QSection 2

…uch a company is justified for pure commercial considerations, and, therefore, loss on sale of such shares is admissible as business losses…………. (Emphasis supplied) c) The aforesaid decision has been upheld by the Hon‘ble Jurisdictional High Court reported in 370 ITR 728 (Para 7 to 9, Pg. 138, Pg. 136-139 of Legal Paper Book, Vol. I). Wherein the Court observed as under: “7. The Commissioner and the Tribunal concurrently found that the Camelot was fully owned subsidiary of the assessee and engaged in the manufacturing of toothbrushes exclusively for the sole client, namely, the assessee. Shares purchased of Came…

Deputy CIT-5(1)(1), Mumbai vs. M/S Essar Shipping Limited, Mumbai

In the result, the appeal filed by the revenue stands dismissed

ITA 821/MUM/2022[2015-16]Status: DisposedITAT Mumbai14 Nov 2022AY 2015-16

Bench: Shri Amit Shukla, Jm & Shri M Balaganesh, Am आयकरअपीलसं./ I.T.A. No. 821/Mum/2022 (निर्धारणवर्ा / Assessment Year: 2015-16) M/S Essar Shipping Dy. Cit-Circle – 5(3)(1), Limited R. No. 568, Aayakar बिधम/ Essar House, 11, K K Bhavan, M. K. Road, Vs. Marg, Mahalaxmi, Mumbai-400 020 Mumbai-400 034 स्थायीलेखासं./जीआइआरसं./ Pan No. Aacce3707D (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant By : Shri Prakash R. Mane, Ld. Dr प्रत्यथीकीओरसे/Respondent By : Shri Manoj Patwari/ Shri Rishav Patwari, Ld. Ars सुनवाईकीतारीख/ : 18.08.2022 Date Of Hearing घोषणाकीतारीख / : 14.11.2022 Date Of Pronouncement आदेश / O R D E R Per Amit Shukla: The Aforesaid Appeal Has Been Filed By The Revenue Against Impugned Order Dated 28.02.2022, Passed By Ld. Cit (Appeals)-56, Mumbai For The Quantum Of Assessment Passed U/S 143(3) R.W.S.

For Appellant: Shri Prakash R. ManeFor Respondent: Shri Manoj Patwari/ Shri
Section 115VSection 143(3)Section 28Section 43Section 92Section 92F

…u/s 36(1)(iii) of the Act. In order to support our proposition, reliance is placed on following decisions; a) CIT v. Phil Corporation Ltd [244 CTR 226 (Born)] 36 I.T.A. No. 821/Mum/2022 M/s Essar Shipping Limited b) CIT vs. Colgate Palmolive India Limited [(370 ITR 728) (Bom)] c) CIT v. Investa Industrial Corpn. Ltd. [(119 FUR 380) (Bom.)] d) CIT v. RPG Transmission Ltd. [359 ITR 673 (Mad)] Raptakos Brett & Co. Ltd vs. PCIT. (ITA No. 2251/Mu e) m/2015) (Mumbai Tribunal) 35. In all the above cases, it has been held that if the investment is made in subsidiary for the purpose of business, the loss or expenditure…

M/S Southern Tpetrochemical Industries Corpration Limited, Chennai vs. ITO, Corporate Ward-3(1), Chennai

In the result, appeal filed by the assessee is allowed

ITA 232/CHNY/2022[2017-18]Status: DisposedITAT Chennai23 Sept 2022AY 2017-18

Bench: Shri V. Durga Rao, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकरअपीलसं./Ita No.232/Chny/2022 िनधा"रणवष"/Assessment Year: 2017-18 M/S.Southern Petrochemical V. The Income Tax Officer, Industries Corporation Ltd., Corporate Ward-3(1), 88, Spic House, Mount Road, Chennai. Guindy, Chennai-600 032. [Pan:Aaacs 4668 K] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Mr.R.Vijayaraghavan, Adv. &
Section 115JSection 143Section 263

…nt proceedings also relied on the following decisions in support of their claim for deduction of the write off of investments made for the purpose of the business. (i). ACE designers Ltd v ACIT 275 Taman 100 (Kar.) (ii). CIT v Colgate Palmolive (India) Ltd 370 ITR 728 Born. (iii). Indian Commerce and Industries Co P Ltd 213 ITR 533 Mad. (iv). Patnaik and Co Ltd. 161 ITR 365 SC. 18. On a perusal of these cases, the common ratio is that loss on investments made for the purpose of the business is allowable as a revenue loss. M/s.SPIC Ltd. :: 15 :: 19. In the case of ACE Designers Ltd. vs. ACIT (LTU) reported…

Refex Industries Ltd., Chennai vs. DCIT Corporate Circle 5(3), Chennai

The appeal stands partly allowed

ITA 2939/CHNY/2017[2013-14]Status: DisposedITAT Chennai07 Feb 2022AY 2013-14

Bench: Hon’Ble Shri V. Durga Rao & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri T. Banusekar (CA) – Ld ARFor Respondent: Shri S. Palani Kumar, Ld. CIT - DR
Section 143(3)Section 32

…advanced to STPL was in accordance with assessee’s main objects and loss suffered there-from was an allowable expenditure / business loss. Reliance was placed on the favorable decision of Hon’ble Bombay High Court in the case of Colgate Palmolive (India) Ltd (370 ITR 728) which was - 7 - ITA No: 2938 & 2939/Chny/2017 rendered after considering the decision of Hon’ble Supreme Court in the case of Patnaik and Co. (161 ITR 365). Similarly, the amount of Rs.508 Lacs paid by assessee towards corporate guarantee would be allowable deduction since the assessee stood guarantor for STPL. The guarantee was given with a vi…

Refex Industries Ltd., Chennai vs. DCIT Corporate Circle 5(3), Chennai

The appeal stands partly allowed

ITA 2938/CHNY/2017[2011-12]Status: DisposedITAT Chennai07 Feb 2022AY 2011-12

Bench: Hon’Ble Shri V. Durga Rao & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri T. Banusekar (CA) – Ld ARFor Respondent: Shri S. Palani Kumar, Ld. CIT - DR
Section 143(3)Section 32

…advanced to STPL was in accordance with assessee’s main objects and loss suffered there-from was an allowable expenditure / business loss. Reliance was placed on the favorable decision of Hon’ble Bombay High Court in the case of Colgate Palmolive (India) Ltd (370 ITR 728) which was - 7 - ITA No: 2938 & 2939/Chny/2017 rendered after considering the decision of Hon’ble Supreme Court in the case of Patnaik and Co. (161 ITR 365). Similarly, the amount of Rs.508 Lacs paid by assessee towards corporate guarantee would be allowable deduction since the assessee stood guarantor for STPL. The guarantee was given with a vi…

DCIT Cir 3, Thane vs. Sequent Scientific Ltd, Thane

In the result, the appeal of the Revenue is dismissed

ITA 14/MUM/2017[2011-12]Status: DisposedITAT Mumbai27 Jul 2021AY 2011-12

Bench: Shri Rajesh Kumar & Shri Ravish Soodassessment Year: 2011-12

For Appellant: Shri H.P. Mahajani, A.RFor Respondent: Shri T.S. Khalsa, D.R
Section 10B

…y and hence the commercially expedient decision to write off the irrecoverable amount and the same was held to be deductible. 5.5.11 According to the ratio of that judgement of jurisdictional Hon'ble Bombay High Court in CIT v. Colgate Palmolive (India) Ltd, 370 ITR 728 (BOM) losses in relation to such business Activity are allowable in the hands of the appellant. Further, in S.A. Builders vs CIT 158 Taxman 74 (SC) the Hon'ble Apex Court held that where holding company has deep interest in the subsidiary and advance interest free loan to the subsidiary which uses it for business purpose, the holding company woul…

ACIT, Bangalore vs. M/S. Abb Limited, Bangalore

In the result, ground No.3 raised by the assessee is dismissed

ITA 897/BANG/2008[2003-04]Status: DisposedITAT Bangalore23 Jul 2021AY 2003-04

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranita No.790 & 791/Bang/2008 Assessment Year : 2002-03 & 2003-04 M/S. Abb Ltd., Vs. The Deputy Commissioner Of Ii Floor, East Wing, Income Tax (Ltu), Khanija Bhavan, Bengaluru. Race Course Road, Bengaluru-560 001. Pan : Aaaca 3834 B Appellant Respondent

For Appellant: Shri. Percy Pardiwala, Sr. AdvocateFor Respondent: Shri. K. V. Aravind, Standing Counsel
Section 2Section 80H

…hat the loss of investment made in equity of foreign subsidiary is allowable as deduction. He submitted that the Hon’ble Karnataka High Court has followed the decision rendered by Hon’ble Bombay High Court in the case of CIT vs. Colgate Polmolive (India) Ltd (370 ITR 728)(Bom). Accordingly, the Ld A.R contended that the claim of write off advances given to M/s NSL is allowable either as revenue expenditure or as business loss. 39. On the contrary, the Ld D.R submitted that the claim of the assessee is not allowable as bad debt, since the assessee has not complied with the provisions of sec,36(2), i.e., it has no…

ACIT, Bangalore vs. M/S. Abb Limited, Bangalore

In the result, ground No.3 raised by the assessee is dismissed

ITA 896/BANG/2008[2002-03]Status: DisposedITAT Bangalore23 Jul 2021AY 2002-03

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranita No.790 & 791/Bang/2008 Assessment Year : 2002-03 & 2003-04 M/S. Abb Ltd., Vs. The Deputy Commissioner Of Ii Floor, East Wing, Income Tax (Ltu), Khanija Bhavan, Bengaluru. Race Course Road, Bengaluru-560 001. Pan : Aaaca 3834 B Appellant Respondent

For Appellant: Shri. Percy Pardiwala, Sr. AdvocateFor Respondent: Shri. K. V. Aravind, Standing Counsel
Section 2Section 80H

…hat the loss of investment made in equity of foreign subsidiary is allowable as deduction. He submitted that the Hon’ble Karnataka High Court has followed the decision rendered by Hon’ble Bombay High Court in the case of CIT vs. Colgate Polmolive (India) Ltd (370 ITR 728)(Bom). Accordingly, the Ld A.R contended that the claim of write off advances given to M/s NSL is allowable either as revenue expenditure or as business loss. 39. On the contrary, the Ld D.R submitted that the claim of the assessee is not allowable as bad debt, since the assessee has not complied with the provisions of sec,36(2), i.e., it has no…

M/S. Abb Limited(Formerly Asea Brown Boveri Limited), Bangalore vs. ACIT, Bangalore

In the result, ground No.3 raised by the assessee is dismissed

ITA 791/BANG/2008[2003-04]Status: DisposedITAT Bangalore23 Jul 2021AY 2003-04

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranita No.790 & 791/Bang/2008 Assessment Year : 2002-03 & 2003-04 M/S. Abb Ltd., Vs. The Deputy Commissioner Of Ii Floor, East Wing, Income Tax (Ltu), Khanija Bhavan, Bengaluru. Race Course Road, Bengaluru-560 001. Pan : Aaaca 3834 B Appellant Respondent

For Appellant: Shri. Percy Pardiwala, Sr. AdvocateFor Respondent: Shri. K. V. Aravind, Standing Counsel
Section 2Section 80H

…hat the loss of investment made in equity of foreign subsidiary is allowable as deduction. He submitted that the Hon’ble Karnataka High Court has followed the decision rendered by Hon’ble Bombay High Court in the case of CIT vs. Colgate Polmolive (India) Ltd (370 ITR 728)(Bom). Accordingly, the Ld A.R contended that the claim of write off advances given to M/s NSL is allowable either as revenue expenditure or as business loss. 39. On the contrary, the Ld D.R submitted that the claim of the assessee is not allowable as bad debt, since the assessee has not complied with the provisions of sec,36(2), i.e., it has no…

M/S. Abb Limited(Formerly Asea Brown Boveri Limited), Bangalore vs. DCIT, Bangalore

In the result, ground No.3 raised by the assessee is dismissed

ITA 790/BANG/2008[2002-03]Status: DisposedITAT Bangalore23 Jul 2021AY 2002-03

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranita No.790 & 791/Bang/2008 Assessment Year : 2002-03 & 2003-04 M/S. Abb Ltd., Vs. The Deputy Commissioner Of Ii Floor, East Wing, Income Tax (Ltu), Khanija Bhavan, Bengaluru. Race Course Road, Bengaluru-560 001. Pan : Aaaca 3834 B Appellant Respondent

For Appellant: Shri. Percy Pardiwala, Sr. AdvocateFor Respondent: Shri. K. V. Aravind, Standing Counsel
Section 2Section 80H

…hat the loss of investment made in equity of foreign subsidiary is allowable as deduction. He submitted that the Hon’ble Karnataka High Court has followed the decision rendered by Hon’ble Bombay High Court in the case of CIT vs. Colgate Polmolive (India) Ltd (370 ITR 728)(Bom). Accordingly, the Ld A.R contended that the claim of write off advances given to M/s NSL is allowable either as revenue expenditure or as business loss. 39. On the contrary, the Ld D.R submitted that the claim of the assessee is not allowable as bad debt, since the assessee has not complied with the provisions of sec,36(2), i.e., it has no…

CIT v. Colgate Palmolive (India) Ltd. (370 ITR 728) — Cited in 33 Judgments | BharatTax