CIT v. Computer Graphics Ltd.

285 ITR 84High Court2006#8620 most cited

What is CIT v. Computer Graphics Ltd. authority for?

The reasonableness of an expenditure must be judged from the viewpoint of a prudent businessman, considering the legitimate business needs and the benefit derived by the company, and not solely from the revenue's perspective. The approach should be that of a businessman.

13

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2011 to 2024.

Also referred to as

CIT v. Computer Graphics Ltd. · reasonableness of expenditure · prudent businessman · legitimate business needs · benefit derived · business viewpoint · 285 ITR 84 · 155 Taxmann 612

Also reported as

155 Taxmann 612

Judgments citing CIT v. Computer Graphics Ltd.

Egberts India Pvt Ltd., Chennai vs. ITO, Corporate Circle 2(1), Chennai

The appeal stand allowed in terms of our above order

ITA 1369/CHNY/2023[2018-19]Status: DisposedITAT Chennai10 Jun 2024AY 2018-19

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manu Kumar Giri, Jm आयकरअपील सं./ Ita No.1369Chny/2023 (िनधा9रणवष9 / Assessment Year: 2018-19) M/S Egberts India Private Limited Ito बनाम/ Corporate Circle-2(1) 19, (Old No.11), Nuewry Grandeur B Block, Vs. Chennai. Anna Nagar S.O., Chennai-600 040. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaace-1410-F (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओरसे/ Appellant By : Shri Y. Sridhar (Fca)-Ld. Ar " थ"कीओरसे/Respondent By : Shri R. Mukundan (Jcit)-Ld. Dr सुनवाई की तारीख/Date Of Hearing : 10-06-2024 घोषणा की तारीख /Date Of Pronouncement : 10-06-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri Y. Sridhar (FCA)-Ld. ARFor Respondent: Shri R. Mukundan (JCIT)-Ld. DR
Section 143(3)Section 40A(2)Section 40A(2)(b)

…आयकर अपीलीय अिधकरण ‘ए’ "ायपीठ चे"ई म"। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI माननीय +ी मनोज कुमार अ/वाल ,लेखा सद4 एवं माननीय +ी मनु कुमार िग7र, "ाियक सद4 के सम8। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI, JM आयकरअपील सं./ ITA No.1369Chny/2023 (िनधा9रणवष9 / Assessment Year: 2018-19) M/s Egberts India Private Limited ITO बनाम/ Corporate Circle-2(1) 19, (Old No.11), Nuewry Grandeur B Block, Vs. Chennai. Anna Nagar S.O., Chennai-600 040. "थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACE-1410-F (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओरसे/ Appellant by : Shri Y.…

Maxwell & Stuart Project Management Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, both the assessees appeals are allowed

ITA 650/DEL/2017[2012-13]Status: DisposedITAT Delhi22 Feb 2019AY 2012-13

Bench: Shri H.S. Sidhu

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 40Section 40A(2)(a)Section 40A(2)(b)

…rdship in bona fide cases". Hive (supra) also considered the effect of the Allahabad High Court's decision in Abbas Wazir (P.) Ltd. Vs. Commissioner of Income Tax [2004] 265 ITR 77 and the Madras High Court's ruling in CIT Vs. Computer Graphics Ltd. [2006] 285 ITR 84. The Court also relied upon the Calcutta High Court's ruling in CIT Vs. Edward Keventer (P.) Ld. [1972] 86 ITR 370. In Edward Keventer's case (supra), the Court had stated that the reasonableness or otherwise of the expenditure should take into account firstly the legitimate 8 business needs of the assessee or the company, secondly, benefits…

Maxwell & Stuart Project Management Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, both the assessees appeals are allowed

ITA 649/DEL/2017[2011-12]Status: DisposedITAT Delhi22 Feb 2019AY 2011-12

Bench: Shri H.S. Sidhu

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 40Section 40A(2)(a)Section 40A(2)(b)

…rdship in bona fide cases". Hive (supra) also considered the effect of the Allahabad High Court's decision in Abbas Wazir (P.) Ltd. Vs. Commissioner of Income Tax [2004] 265 ITR 77 and the Madras High Court's ruling in CIT Vs. Computer Graphics Ltd. [2006] 285 ITR 84. The Court also relied upon the Calcutta High Court's ruling in CIT Vs. Edward Keventer (P.) Ld. [1972] 86 ITR 370. In Edward Keventer's case (supra), the Court had stated that the reasonableness or otherwise of the expenditure should take into account firstly the legitimate 8 business needs of the assessee or the company, secondly, benefits…

Freewings Power & Infra Limited, Kolkata vs. DCIT, Circle - 10(1), Kolkata

Appeal is allowed

ITA 778/KOL/2018[2012-13]Status: DisposedITAT Kolkata25 Jan 2019AY 2012-13

Bench: Shri S.S, Godaraassessment Year:2012-13

Section 143(3)Section 40A(2)Section 40A(2)(b)

…est person in business. "The aforesaid judgment of Calcutta High Court was affirmed by the Apex Court in Cit Vs. Edward Keventer (Private) Ltd. (1978) 115 ITR 149 (SC) Sir. similar view is held by the Madras High Court in CIF Vs. Computer Graphics Ltd. (2006) 285 ITR 84. In the same line is the judgment of Bombay High Court in the case of CIT Vs. Shatronjay Diamonds (2003) 261 ITR 258 (Born). Sir, we would like to place our reliance on Delhi ITAT in the case of M/s. Second Leasing Pvt. Ltd. Vs. DCIT, Cir-8(1) ITA No. 2412/Del/2013 dated 19/05/2017. Sir, therefore, under the facts and circumstances of the case and…

Gamesa Renewable Private Limited, Chennai vs. ACIT, Chennai

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 376/CHNY/2017[2012-13]Status: DisposedITAT Chennai13 Nov 2017AY 2012-13

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri B.Ramakrishnan, FCA &For Respondent: Smt. Vijayalakshmi, CIT,D.R
Section 143(3)Section 144C(1)Section 144C(5)

…cribed in the Act read with Rules. The said principle has been laid down in the following decision: a. Hive Communication (P) Ltd. vs. CIT (Delhi)(353 ITR 200) b. CIT vs. EKL Appliances Ltd. (Delhi HC)(345 ITR 241) c. CIT vs. Computer Graphics Ltd.Madras HC)(155 Taxmann 612) d. Showa India (P) Ltd. vs. DCIT (Delhi, ITAT)(166/Del/2013,dt.30.06.2016) Therefore, the ld. AR submitted that the jurisdiction of the TPO does not extend to stepping into the shoes of the assessee and determining the necessity of incurrence of expenditure and the contention of the TPO that there is no necessity on the part of the assesse…

Gamesa Renewable Private Limited, Chennai vs. DCIT, Chennai

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 1420/CHNY/2017[2011-12]Status: DisposedITAT Chennai13 Nov 2017AY 2011-12

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri B.Ramakrishnan, FCA &For Respondent: Smt. Vijayalakshmi, CIT,D.R
Section 143(3)Section 144C(1)Section 144C(5)

…cribed in the Act read with Rules. The said principle has been laid down in the following decision: a. Hive Communication (P) Ltd. vs. CIT (Delhi)(353 ITR 200) b. CIT vs. EKL Appliances Ltd. (Delhi HC)(345 ITR 241) c. CIT vs. Computer Graphics Ltd.Madras HC)(155 Taxmann 612) d. Showa India (P) Ltd. vs. DCIT (Delhi, ITAT)(166/Del/2013,dt.30.06.2016) Therefore, the ld. AR submitted that the jurisdiction of the TPO does not extend to stepping into the shoes of the assessee and determining the necessity of incurrence of expenditure and the contention of the TPO that there is no necessity on the part of the assesse…

Second Leasing Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, the Appeal filed by the Assessee stands allowed

ITA 2412/DEL/2013[2009-10]Status: DisposedITAT Delhi19 May 2017AY 2009-10

Bench: Shri H.S. Sidhu & Shri Prashant Maharishiay. 2009-10 M/S Second Leasing Pvt. Ltd., Dcit, Circle-8(1), Flat No. N, Sagar Apartment, Vs. New Delhi 6, Tilak Marg, New Delhi – 11 001 (Pan: Aabcs6609R) (Appellant) (Respondent)

For Appellant: Sh. Ved Jain, Adv. & Ms. RanoFor Respondent: Sh. N.K. Bansal, Sr. DR
Section 142(1)Section 142(3)Section 143(1)Section 143(2)Section 143(3)Section 40A(2)Section 40A(2)(b)

…person in business. " The aforesaid judgment of Calcutta High Court was affirmed by the Apex Court in Cil Vs. Edward Keventer (Private) Ltd. (1978) 1151TR 149 (SC). VI. Similar view is held by the Madras HighCourt in Cl'F Vs. Computer Graphics Ltd. (2006) 285 ITR 84. In the same line is the judgment of Bombay High Court in the case of CIT Vs. Shatrunjay Diamonds (2003) 261 ITR 258 (Bom). 7- Further it is submitted that, the scope of Section 40A (2) as explained by CBDT in Circular No. 6P, dated 6thJuly, 1968. The CBOT clarified that while examining the reasonableness of 13 expenditure the Assessing Officer…

Sigma Corporation India Ltd vs. DCIT

The appeal is allowed in

ITA/795/2016HC Delhi15 Feb 2017

Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE NAJMI WAZIRI

Section 40A(2)Section 40A(2)(a)Section 40A(2)(b)

…hardship in bona fide cases”. Hive (supra) also considered the effect of the Allahabad High Court’s decision in Abbas Wazir (P.) Ltd. Vs. Commissioner of Income Tax [2004] 265 ITR 77 and the Madras High Court’s ruling in CIT Vs. Computer Graphics Ltd. [2006] 285 ITR 84. The Court also relied upon the Calcutta High Court’s ruling in CIT Vs. Edward Keventer (P.) Ld. [1972] 86 ITR 370. In Edward Keventer’s case (supra), the Court had stated that the reasonableness or otherwise of the expenditure should take into account firstly the legitimate business needs of the assessee or the company, secondly, benefits derived…

Hind Airlink Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result assessee’s appeal is allowed

ITA 2634/DEL/2015[2011-12]Status: DisposedITAT Delhi10 Aug 2016AY 2011-12

Bench: Shri J. Sudhakar Reddyay: 2011-12 Hind Airlink P.Ltd. Vs. Dy.Cit, Circle 12(1) A -1, Okhla Industrial Area New Delhi Phase I, New Delhi 110 020

For Appellant: Sh. M.P.Rastogi, AdvFor Respondent: None (Adjournment Application rejected)
Section 40Section 40A(2)Section 40A(2)(b)

…of a businessman and not that of the revenue. The approach has to be that of a prudent businessman and the reasonableness must be looked into from businessman point of view. Similar view is held by the Madras High Court in CIT v. Computer Graphics Ltd. [2006] 285 ITR 84/155 Taxman 612. In CIT v. Edward Keventer (P.) Ltd. [1972] 86 ITR 370 , the Calcutta High Court considering identical provision in 1922 Act, it was held that the section places two limitations in the matter of exercise of the power. The section enjoins the Assessing Officer in forming any opinion as to the reasonableness or otherwise of the expend…

Amserve Consultants Ltd., New Delhi vs. ADIT, New Delhi

In the result both the appeals of the assesses are allowed

ITA 6059/DEL/2013[2009-10]Status: DisposedITAT Delhi29 Jun 2016AY 2009-10

Bench: Shri I.C. Sudhir & Shri J. Sudhakar Reddyay: 2009-10

For Appellant: Sh. C.S.Agarwal, Sr.AdvFor Respondent: Sh. Ravi Jain, CIT, D.R
Section 143(3)Section 40A(2)Section 40A(2)(b)

…of a businessman and not that of the revenue. The approach has to be that of a prudent businessman and the reasonableness must be looked into from businessman point of view. Similar view is held by the Madras High Court in CIT v. Computer Graphics Ltd. [2006] 285 ITR 84/155 Taxman 612. In CIT v. Edward Keventer (P.) Ltd. [1972] 86 ITR 370 , the Calcutta High Court considering identical provision in 1922 Act, it was held that the section places two limitations in the matter of exercise of the power. The section enjoins the Assessing Officer in forming any opinion as to the reasonableness or otherwise of the expend…

DCIT, New Delhi vs. M/S. Hotline Glass Ltd., New Delhi

In the result the appeal of the revenue is dismissed

ITA 342/DEL/2014[2004-05]Status: DisposedITAT Delhi13 Jan 2016AY 2004-05

Bench: Shri H.S.Sidhu & Shri Prashant Maharishidcit, Hotline Glass Ltd., Circle-12(1) 52-A, Okhla Industrial Vs. New Delhi Estate, Phase-Iii, New Delhi Pan:Aaach0561L (Appellant) (Respondent) Assessee By: Sh.Robin Rawal, Sr Dr Respondent By: None

For Appellant: Sh.Robin Rawal, Sr DRFor Respondent: None
Section 143(2)Section 35DSection 40ASection 40A(2)Section 40A(2)(b)

…INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER DCIT, Hotline Glass Ltd., Circle-12(1) 52-A, Okhla Industrial Vs. New Delhi Estate, Phase-III, New Delhi PAN:AAACH0561L (Appellant) (Respondent) Assessee by: Sh.Robin Rawal, Sr DR Respondent by: None Date of Hearing 06.01.2016 Date of pronouncement 13.01.2016 O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the Department is directed against the order dated 18.10.2013 of ld CIT (A)-New Delhi for the Assessment Year 2004-05. The assessee raised the fo…

Hive Communications Pvt Ltd

Appeal is allowed

ITA/306/2011HC Delhi08 Jul 2011

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

Section 143Section 260Section 40ASection 40A(2)

…sinessman and not that of the revenue. The approach has to be that of a prudent businessman and the reasonableness must be looked into from businessman point of view. Similar view is held by the Madras High Court in CIT Vs. Computer Graphics Ltd. (2006) 285 ITR 84. ITA, 306/2011 Page 9 of 10 13. In CIT Vs. Edward Keventer (Private) Ltd. (19720 86 ITR 370, the Calcutta High Court considering identical provision in 1922 Act, it was held that the section places two limitations in the matter of exercise of the power. The section enjoins the Assessing offi…

Hive Communications Pvt Ltd

Appeal is allowed

ITA - 306 / 2011HC Delhi08 Jul 2011
Section 143Section 260Section 40ASection 40A(2)

…sinessman and not that of the revenue. The approach has to be that of a prudent businessman and the reasonableness must be looked into from businessman point of view. Similar view is held by the Madras High Court in CIT Vs. Computer Graphics Ltd. (2006) 285 ITR 84. 2011:DHC:3393-DB ITA, 306/2011 Page 9 of 10 13. In CIT Vs. Edward Keventer (Private) Ltd. (19720 86 ITR 370, the Calcutta High Court considering identical provision in 1922 Act, it was held that the section places two limitations in the matter of exercise of the power. The section enjoins th…

CIT v. Computer Graphics Ltd. (285 ITR 84) — Cited in 13 Judgments | BharatTax