CIT v. Dalmia Cement (Bharat) Ltd.

254 ITR 377High Court2002#174 most cited

What is CIT v. Dalmia Cement (Bharat) Ltd. authority for?

When there is a nexus between an expenditure and the purpose of business, incurred on grounds of commercial expediency, the Revenue cannot question its reasonableness or assume the role of the businessman to compel profit maximization. This principle applies even if the business is not that of the assessee itself.

417

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2006 to 2026.

Also referred to as

CIT v. Dalmia Cement (Bharat) Ltd. · section 36(1)(iii) · section 37(1) · commercial expediency · business expenditure · nexus with business · Assessing Officer's powers · reasonableness of expenditure · interest free advances · disallowance of interest · SA Builders

Also reported as

183 Taxmann 422

Sections most often in play

Section 36(1)(iii)Section 143(3)Section 40(a)(ia)Section 14ASection 37Section 37(1)Section 35DSection 40A(2)(b)

Issues it is cited on

interest free advancescommercial expediencysection 36(1)(iii)business expediencysection 36(1)section 36disallowance under section 14asection 37section 28revenue expendituresection 40(a)(ia)section 37(1)

Judgments citing CIT v. Dalmia Cement (Bharat) Ltd.

ITO, Karauli vs. Manneta Garg, Karauli

In the result, appeal of the revenue is dismissed while cross objection of the assessee is allowed

ITA 875/JPR/2016[2012-13]Status: DisposedITAT Jaipur20 Jul 2018AY 2012-13
For Appellant: Shri Manish Agarwal (CA)For Respondent: Shri A.S. Nehra (JCIT) fu/kZkfjrh dh vksj ls@
Section 68

…आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jkWo] U;kf;d lnL; ,oa Jh HkkxpUn] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM vk;dj vihy la-@ITA No. 875/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2012-13. cuke The Income Tax Officer, Smt. Maneeta Garg, Vs. Ward Karauli. Prop. MN/s. Shreeji Telelink, E-54,Mohan Nagar, Hindaun City, Karauli. LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AOYPG 7819 K vihykFkhZ@Appellant izR;FkhZ@Respondent Cross Objection No. 41/JP/2016 (Arising out of vk;dj vihy la-@ITA No. 875/JP/2016) fu/kZkj.k…

DCIT, New Delhi vs. M/S. Dlf Utilities Ltd., New Delhi

The appeal of the department stands dismissed

ITA 3734/DEL/2015[2010-11]Status: DisposedITAT Delhi13 Jul 2018AY 2010-11

Bench: Shri P. M. Jagtap & Ms Suchitra Kambledcit Vs Dlf Utilities Ltd. Circle-(7)1, Room No. 403, 10 E, Naaz Cinema C. R. Building, I. P. Estate Complex, New Delhi Jhandewalan Extension (Appellant) New Delhi Aaacn3199A (Respondent)

Section 143(3)Section 36Section 36(1)

…an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The Ld. CIT (A) has also referred to the judgment of Hon’ble Delhi High Court in the case of CIT vs. Dalmia Cement (Pvt.) Ltd. reported in 254 ITR 377 wherein it had been held by the Hon’ble High Court that once it was established that there was a nexus between the expenditure and the purpose of business, the revenue cannot justifiably claim to put itself in the armchair of the businessman and take up the role to decide as to how much is reasonable expenditure having regard to the circumstances…

JCIT (OSD), New Delhi vs. M/S Dlf Utilities Ltd, New Delhi

The appeal of the department stands dismissed

ITA 2566/DEL/2016[2011-12]Status: DisposedITAT Delhi28 Jun 2018AY 2011-12

Bench: Sh. G.D. Agrawal & Sh. Sudhanshu Srivastavadlf Utilities Ltd. Dcit 9Th Floor, Dlf Centre, Circle-7(1) Sansad Marg New Delhi New Delhi Vs. Pan : Aaacn3199A (Appellant) (Respondent) Jcit (Osd) Dlf Utilities Ltd. Circle-7(1), 403, 9Th Floor, Dlf Centre, C.R.Building Sansad Marg Vs. I.P.Estate New Delhi New Delhi (Appellant) (Respondent)

For Appellant: Sh. R.S.Singhvi, Sr. DRFor Respondent: Ms. Ashima Neb, Sr. DR
Section 14ASection 36(1)(iii)

…n expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The Ld. CIT (A) has also referred to the judgment of Hon’ble Delhi High Court in the case of CIT vs. Dalmia Cement (Pvt.) Ltd. reported in 254 ITR 377 wherein it had been held by the Hon’ble High Court that once it was established that there was a nexus between the expenditure and (DLF Utilities Ltd.) the purpose of business, the revenue cannot justifiably claim to put itself in the armchair of the businessman and take up the role to decide as to how much is reasonable expenditure having rega…

Dlf Utilities Ltd., New Delhi vs. DCIT, New Delhi

The appeal of the department stands dismissed

ITA 1998/DEL/2016[2011-12]Status: DisposedITAT Delhi28 Jun 2018AY 2011-12

Bench: Sh. G.D. Agrawal & Sh. Sudhanshu Srivastavadlf Utilities Ltd. Dcit 9Th Floor, Dlf Centre, Circle-7(1) Sansad Marg New Delhi New Delhi Vs. Pan : Aaacn3199A (Appellant) (Respondent) Jcit (Osd) Dlf Utilities Ltd. Circle-7(1), 403, 9Th Floor, Dlf Centre, C.R.Building Sansad Marg Vs. I.P.Estate New Delhi New Delhi (Appellant) (Respondent)

For Appellant: Sh. R.S.Singhvi, Sr. DRFor Respondent: Ms. Ashima Neb, Sr. DR
Section 14ASection 36(1)(iii)

…n expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The Ld. CIT (A) has also referred to the judgment of Hon’ble Delhi High Court in the case of CIT vs. Dalmia Cement (Pvt.) Ltd. reported in 254 ITR 377 wherein it had been held by the Hon’ble High Court that once it was established that there was a nexus between the expenditure and (DLF Utilities Ltd.) the purpose of business, the revenue cannot justifiably claim to put itself in the armchair of the businessman and take up the role to decide as to how much is reasonable expenditure having rega…

Allied Media Network P.Ltd, Mumbai vs. DCIT RG 7(1), Mumbai

In the result, the appeal is partly allowed

ITA 3545/MUM/2016[2011-12]Status: DisposedITAT Mumbai27 Jun 2018AY 2011-12

Bench: Shri C.N. Prasad () & Shri N.K. Pradhan () Assessment Year: 2011-12 Allied Media Network Pvt. Dcit, Range-7(1), Aayakar Ltd., P-2, Level 3, Percept Bhavan, M.K. Marg Vs. House, 22 Raghuvanshi Mumbai-400020 Estate, 11/12 Senapati Bapat Marg, Lower Parel, Mumbai-400013. Pan No. Aadcp9975H Appellant Respondent Assessee By : Mr. Pankaj Jain, Ar Revenue By : Ms. S. Padmaja, Cit(Dr) Date Of Hearing : 05/04/2018 Date Of Pronouncement: 27/06/2018

For Appellant: Mr. Pankaj Jain, ARFor Respondent: Ms. S. Padmaja, CIT(DR)
Section 143(3)Section 36(1)(iii)

…not in conformity with provisions of statue.” Let us examine the above reasons given by the AO against the backdrop of the relevant decisions. In CIT v. Neel Kanth Synthetics & Chemicals Pvt. Ltd. (2011) 330 ITR 463 and CIT v. Dalmia Cement Bharat Ltd. (2011) 330 ITR 595 (Del), it has been held that interest-free advance giving to sister concern need not inhibit the deduction if such loan or advance has been given for business purposes. Also as held in Madhav Prasad Jatia v. CIT (1979) 118 ITR 200 (SC), the expression “for the purpose of business” occurring in section 36(1)(iii) is wider in scope than the express…

Mseb Holding Co. Ltd, Mumbai vs. DCIT Cir 10(1), Mumbai

In the result, appeal of the assessee as well as the Revenue are dismissed

ITA 3999/MUM/2016[2011-12]Status: DisposedITAT Mumbai22 Jun 2018AY 2011-12

Bench: Shri C.N. Prasad, Hon'Ble & Shri N.K. Pradhan, Hon'Blem/S. Mseb Holding Co. Ltd V. The Dy.Cit, Circle – 10(1) Hongkong Bank Building Aayakar Bhavan, M.K. Road, M.G. Road, Mumbai – 400 001 Mumbai-400 020

For Appellant: Shri K.K. VedFor Respondent: Shri Rajesh Yadav
Section 36(1)(iii)Section 37(1)Section 72A(4)(b)

…Prasad Moody [115 ITR 419 (SC.)] (ii) R.B. Bansilal Abirchand Spg. & Wvg. Mills v. CIT [81 ITR 34 (Bom.) (FB)] (iii) F. E. Dinshaw Ltd. v. CIT [36 ITR 114 (Bom.)] (iv) Delhi Cloth & General Mills Co. Ltd. v. CIT [85 ITR (Delhi)] (v) CIT v. Dalmia Cement Ltd. [254 ITR 377] (vi) CIT v. Navsari Cotton and Silk Mills Ltd. [135 ITR 546] (vii) Ravi Marketing (P) Ltd. v. CIT [280 ITR 519] (viii) CIT v. Malayalam Plantations Ltd. [53 ITR 140] 9. Assessee further submitted that in view of the foregoing and considering the facts and circumstances of the assessee’s case and the law on the subject, the expenditure incurred b…

ACIT 1(2)2, Mumbai vs. Mseeb Holding Company Ltd, Mumbai

In the result, appeal of the assessee as well as the Revenue are dismissed

ITA 3492/MUM/2016[2011-12]Status: DisposedITAT Mumbai22 Jun 2018AY 2011-12

Bench: Shri C.N. Prasad, Hon'Ble & Shri N.K. Pradhan, Hon'Blem/S. Mseb Holding Co. Ltd V. The Dy.Cit, Circle – 10(1) Hongkong Bank Building Aayakar Bhavan, M.K. Road, M.G. Road, Mumbai – 400 001 Mumbai-400 020

For Appellant: Shri K.K. VedFor Respondent: Shri Rajesh Yadav
Section 36(1)(iii)Section 37(1)Section 72A(4)(b)

…Prasad Moody [115 ITR 419 (SC.)] (ii) R.B. Bansilal Abirchand Spg. & Wvg. Mills v. CIT [81 ITR 34 (Bom.) (FB)] (iii) F. E. Dinshaw Ltd. v. CIT [36 ITR 114 (Bom.)] (iv) Delhi Cloth & General Mills Co. Ltd. v. CIT [85 ITR (Delhi)] (v) CIT v. Dalmia Cement Ltd. [254 ITR 377] (vi) CIT v. Navsari Cotton and Silk Mills Ltd. [135 ITR 546] (vii) Ravi Marketing (P) Ltd. v. CIT [280 ITR 519] (viii) CIT v. Malayalam Plantations Ltd. [53 ITR 140] 9. Assessee further submitted that in view of the foregoing and considering the facts and circumstances of the assessee’s case and the law on the subject, the expenditure incurred b…

M/S. Sports Infratech Pvt. Ltd., New Delhi vs. DCIT, New Delhi

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

ITA 2045/DEL/2015[2011-12]Status: DisposedITAT Delhi13 Jun 2018AY 2011-12

Bench: Sh. N. K. Saini, Am & Sh. K. N. Chary, Jm Ita No. 2045/Del/2015 : Asstt. Year : 2011-12 M/S Sports Infratech Pvt. Ltd., Vs Dy. Commissioner Of Income Tax, 204, Okhla Industrial Estate, Central Circle-5, Phase-Iii, New Delhi-110020 New Delhi (Appellant) (Respondent) Pan No. Aabcj7255J Assessee By : Sh. Sanjay Jain, Ca & Sh. Rakesh Joshi, Ca Revenue By : Sh. S. S. Rana, Cit Dr Date Of Hearing : 05.04.2018 Date Of Pronouncement : 13.06.2018 Order Per N. K. Saini, Am: This Is An Appeal By The Assessee Against The Order Dated 30.01.2015 Of Ld. Cit(A)-24, New Delhi.

For Appellant: Sh. Sanjay Jain, CA &For Respondent: Sh. S. S. Rana, CIT DR
Section 133(6)Section 133ASection 142(1)Section 143(1)Section 143(2)Section 37

…who runs the business know better than the Assessing Officer that which expenses will give benefits to run its business smoothly. Hon'ble Delhi High court about the allow ability of deduction U/s 37(1) of the I.T Act, in case of CIT Vs. B Dalmia Cement Ltd. (254 ITR 377)(Del) held as under: "For the allowance under section 37(1), the following conditions are to be satisfied, i.e. (a) there must be expenditure, (b) such expenditure must not be of the nature described in sections 30 to 36, (c) the expenditure must not be in the nature of capital expenditure or personal expenses of the assessee, (d) the expenditure…

ACIT, Circle-2(2), Kolkata vs. M/S Tcg Urban Infrastructure Holding Pvt. Ltd., Kolkata

In the result, the appeal filed by the Revenue

ITA 1649/KOL/2016[2011-12]Status: DisposedITAT Kolkata25 May 2018AY 2011-12

Bench: Shri A. T. Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.1649/Kol/2016 ("नधा"रणवष" / Assessment Year: 2011-12) Acit, Cir-2(2), Kolkata Vs. M/S. Tcg Urban Infrastructure

For Appellant: Shri A.K. Tibrewal, FCAFor Respondent: Shri G. Hanshing, CIT (DR)
Section 143(3)Section 14ASection 2(22)(e)

…Malayalam Plantations Ltd. [1964 53 ITR 140 (SC), CIT v. Birla Cotton Spinning and Weaving Mills Ltd. [1971 82 ITR 166 (SC)], etc.' 13. In the process, the Court also agreed that the view taken by the Delhi High Court in CIT v. Dalmia Cement (P.) Ltd. [2002] 254 ITR 377/121 Taxman 706 wherein the High Court had held that once it is established that there is nexus between the expenditure and the purpose of business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of the Board of Directors…

Tcg Urban Infrastructure Holdings Pvt Ltd, Kolkata vs. ACIT, Circle-2(2), Kolkata

In the result, the appeal filed by the Revenue

ITA 1622/KOL/2016[2011-12]Status: DisposedITAT Kolkata25 May 2018AY 2011-12

Bench: Shri A. T. Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.1649/Kol/2016 ("नधा"रणवष" / Assessment Year: 2011-12) Acit, Cir-2(2), Kolkata Vs. M/S. Tcg Urban Infrastructure

For Appellant: Shri A.K. Tibrewal, FCAFor Respondent: Shri G. Hanshing, CIT (DR)
Section 143(3)Section 14ASection 2(22)(e)

…Malayalam Plantations Ltd. [1964 53 ITR 140 (SC), CIT v. Birla Cotton Spinning and Weaving Mills Ltd. [1971 82 ITR 166 (SC)], etc.' 13. In the process, the Court also agreed that the view taken by the Delhi High Court in CIT v. Dalmia Cement (P.) Ltd. [2002] 254 ITR 377/121 Taxman 706 wherein the High Court had held that once it is established that there is nexus between the expenditure and the purpose of business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of the Board of Directors…

M/S. Aramex India P. Ltd., Mumbai vs. DCIT RG. 9(1)(2), Mumbai

In the result, the appeal of the assessee is allowed in terms indicated hereinabove

ITA 6749/MUM/2017[2013-14]Status: DisposedITAT Mumbai18 May 2018AY 2013-14

Bench: Shri R.C.Sharma, Am & Shri Pawan Singh, Jm M/S. Aramex India Pvt. Ltd., Vs. Dcit Rg. 9(1)(2) 821, Solitaire Corporate Park, Mumbai Andheri-Ghatkopar Link Road, Chakala- Andheri (E),Mumbai – 400 093 Pan/Gir No.Aacca6756A Appellant) .. Respondent)

Section 143(3)

…nt cannot step in the shoes of the taxpayer to decide the taxpayer should continue its business. In support of the above, reliance can be placed on the following decisions:-  CIT vs WatehandandCo. [1967] 65 ITR 381 (SC)  CIT vs Dafcrma Cement Pvt Ltd [2002] 254 ITR 377 (Delhi)  CIT vs EKL Appfcances Ltd [2012] 345 ITR 241(Delhi) 51. In view of the above, the segmental accounts maintained by the assessee should be accepted. Consequently, benchmarking analysis undertaken by the assessee should not be rejected by the AO / TPO. 52. Even if the segmental accounts of the assessee are rejected and entity wide margin…

DCIT, Circle-2, Kolkata vs. M/S. Infinity Infotech Parks Ltd, Kolkata

In the result, the appeal of revenue is dismissed

ITA 1317/KOL/2012[2009-10]Status: DisposedITAT Kolkata14 May 2018AY 2009-10

Bench: "ी जे. सुधाकर रे"डी, लेखा सद"य एवं/And "ी ऐ. ट". वक", "यायीक सद"य) [Before Shri J. Sudhakar Reddy, Am & Shri A. T. Varkey, Jm]

Section 14A

…is not correct. 34. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 582 also does not appear to be correct. 35. We agree with the view taken by the Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of the board of directors and assume the role to decide how much is…

Anjani Portland Cement Limited, Hyderabad vs. Addl.CIT, Range-1, Hyderabad

In the result, appeal of the revenue in ITA No

ITA 1493/HYD/2014[2009-10]Status: DisposedITAT Hyderabad11 May 2018AY 2009-10

Bench: Smt P. Madhavi Devi & Shri S. Rifaur Rahman

For Appellant: Shri K.C. DevdasFor Respondent: Ms. Geetindar Mann
Section 14ASection 32(1)(ii)

…any as a measure of commercial expediency is the correct view, and the view taken by the Bombay High Court which set aside the aforesaid decision is not correct. We agree with the view taken by the Delhi High Court in CIT vs. Dalmia Cement (Bhart) Ltd. (2002) 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of the board of directors and assume the role to decide how much is…

Dy.CIT, Circle-1(1), Hyderabad vs. M/S Anjani Portland Cement Ltd., Hyderabad

In the result, appeal of the revenue in ITA No

ITA 1305/HYD/2014[2008-09]Status: DisposedITAT Hyderabad11 May 2018AY 2008-09

Bench: Smt P. Madhavi Devi & Shri S. Rifaur Rahman

For Appellant: Shri K.C. DevdasFor Respondent: Ms. Geetindar Mann
Section 14ASection 32(1)(ii)

…any as a measure of commercial expediency is the correct view, and the view taken by the Bombay High Court which set aside the aforesaid decision is not correct. We agree with the view taken by the Delhi High Court in CIT vs. Dalmia Cement (Bhart) Ltd. (2002) 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of the board of directors and assume the role to decide how much is…

Bs Limited, Hyderabad vs. Asst.Comissioner of Income Tax, Circle-2(3), Hyderabad

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

ITA 2186/HYD/2017[2013-14]Status: DisposedITAT Hyderabad27 Apr 2018AY 2013-14

Bench: Shri D. Manmohan & Shri S. Rifaur Rahmanassessment Year: 2013-14

For Appellant: Shri P. Murali Mohan RaoFor Respondent: Shri Deepak P. Ripote
Section 132Section 133(6)Section 142(1)Section 143(2)Section 143(3)Section 153ASection 92B

…s connection, he relied on the following cases: 1. SSPDL Ltd. Vs. DCIT, 24 ITR(Trib.)(Hyd.) 290 - No nexus between interest on borrowed funds and the amount advanced to sister concerns 2. Hon'ble Delhi High Court in the case of CIT v. Dalmia Cement (P.) Ltd: 254 ITR 377 15.7 Ld. AR submitted that the AO has not followed the DRP directions wherein it was directed to calculate the interest on day to day basis. The assessee has already calculated the disallowance of Rs.1,34,25,171/- and the same is submitted in the page 56 of the Paperbook-1. However, the AO has not considered the same and has M/s BS Ltd., Hyd. di…

DCIT CIT 6(3), Mumbai vs. Mahindra Ugine Steel Co. Ltd, Mumbai

Appeal stands dismissed

ITA 6659/MUM/2014[2009-10]Status: DisposedITAT Mumbai11 Apr 2018AY 2009-10

Bench: Shri Saktijit Dey, Jm & Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./I.T.A. No.6659/Mum/2014 (िनधा"रण वष" / Assessment Year: 2009-10) Deputy Commissioner Of Income Tax Mahindra Cie Automotive Limited Circle-7(2)(1) (The Merged Entity Of Mahindra Ugine Steel Co.Ltd) 74,Ganesh Apartment Room No.338,3Rd Floor बनाम/ Opp.Sitladevi Temple Aaykar Bhavan,M.K.Road Vs. Lady Jamshedji Road, Mahim Mumbai-400 020 Mumbai-400 016 "थायी लेखा सं./जीआइआर सं./Pan/Gir No.Aaacm-4998-G/Aabcm-6632-J (अपीलाथ" /Appellant) (""थ" / Respondent) : & Cross Objection No.96/Mum/2016 (िनधा"रण वष" / Assessment Year: 2009-10) Mahindra Cie Automotive Limited Assistant Commissioner Of (The Merged Entity Of Mahindra Ugine Steel Co.Ltd) Income Tax Range-6(3) बनाम/ Mahindra Towers,1St Floor Room No.573,5Th Floor Vs. Dr.G.M.Bhosale Marg, Worli Aaykar Bhavan, M.K.Road Mumbai-400 018 Mumbai-400 020 "थायी लेखा सं./जीआइआर सं./Pan/Gir No.Aabcm-6632-J/Aaacm-4998-G (अपीलाथ" /Appellant) (""थ" / Respondent) :

For Appellant: H.P.Mahajani & Prasad Bapat,Ld.AR’sFor Respondent: Saurabh Kumar Rai, Ld.DR
Section 143(3)Section 251(1)(a)Section 36Section 36(1)(iii)

…Co.Ltd Assessment Year 2009-10 decision of Hon’ble Apex Court rendered in S.A.Builders Vs. CIT [2006 288 ITR 1] where Hon’ble Court has observed as under:- 34. we agree with the view taken by the Delhi High Court in CIT Vs. Dalima Cement (Bharat) Ltd. (2002) 254 ITR 377 that once it is established that there was nexus between the expenditure and the purpose of the business (which need not necessarily be the business of the assessee itself), the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of the board of directors and assume the role to decide how much is…

DCIT, Ludhiana vs. M/S Incite Homecare Pvt. Ltd., Ludhiana

In the result, the appeal of the Revenue is dismissed

ITA 896/CHANDI/2017[2011-12]Status: DisposedITAT Chandigarh06 Apr 2018AY 2011-12

Bench: Ms. Diva Singh & Dr. B.R.R.Kumarassessment Year: 2011-12

For Appellant: Dr.Gulshan Raj, CIT-DRFor Respondent: Shri Sudhir Sehgal
Section 36Section 43(1)Section 69

…ntegra. Reference may also be made to another decision of the Apex Court in the case of Hero Cycles Pvt. Ltd. Vs CIT (2015) 379 ITR 347 (S.C) wherein taking cognizance of the decision of the Delhi High Court in the case of CIT Vs Dalmia Cement (P) Ltd. (2002) 254 ITR 377 their Lordships held that once it was established that there was a nexus between expenditure ITA 896/CHD/2017. A.Y. 2011-12 Page 9 of 19 and purpose of business, Revenue could not justifiably claim to put itself in the armchair of businessman or in position of Board of Directors and assume the role to decide how much was reasonable expenditure…

DCIT 3(1), Mumbai vs. Edelweiss Capital Ltd, Mumbai

In the result appeals of Revenue are dismissed

ITA 7797/MUM/2011[2007-08]Status: DisposedITAT Mumbai14 Mar 2018AY 2007-08

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm

Section 143(3)Section 14ASection 36(1)(iii)

…ances borrowed money to a subsidiary and the same is used by the subsidiary for some business purposes, the appellant would, in our opinion, ordinarily be entitled to deduction of interest on its borrowed loans." In the case of CIT v Dalmia Cement Bharat Ltd. 330 ITR 595 (Del) it has been held as under. aWe, therefore, answer the reference by ho/ding that the Tribunal was correct in holding that no portion of the interest paid by the assesses on its borrowed funds can be disallowed on the ground that a portion thereof has been diverted to subsidiary company. " The other decisions relied by the A.R.'s also support…

ACIT, Circle-4(1), Visakhapatnam vs. Sri Varalakshmi Jute Twine Mills Pvt. Ltd, Rajam

In the result, appeals filed by the Revenue in ITA

ITA 458/VIZ/2017[2013-2014]Status: DisposedITAT Visakhapatnam09 Feb 2018AY 2013-2014

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Bledcit, Circle-4(1), Vs. M/S. Sri Varalakshmi Jute Visakhapatnam. Twine Mills Pvt. Ltd., Bobbili Road, Rajam (Po), Srikakulam District. Pan No. Aadcs 1167 L Sri Varalakshmi Jute Twine Vs. Ito, Ward-3, Mills Pvt. Ltd., Bobbili Road, Srikakulam. Rajam (Po), Srikakulam Dist. Pan No. Aadcs 1167 L Acit, Circle-4(1), Vs. M/S. Sri Varalakshmi Jute Visakhapatnam. Twine Mills Pvt. Ltd., Bobbili Road, Rajam (Po), Srikakulam District. Pan No. Aadcs 1167 L Sri Varalakshmi Jute Twine Vs. Dcit, Circle-4(1), Mills Pvt. Ltd., Bobbili Road, Visakhapatnam. Rajam (Po), Srikakulam Dist. Pan No. Aadcs 1167 L (Appellants) (Respondents)

For Appellant: Shri Yogesh A. Thar &For Respondent: Shri T. Satyanandam – Sr.DR
Section 143(1)Section 143(3)

…i Jute Twine Mills Pvt. Ltd.) expediency has to be decided from the point of view of businessman and not by the subjective standard of reasonableness of revenue as held by Bombay High Court in CIT vs. Sales Magnesite P Ltd. 214 ITR 1 and CIT vs. Dalmia Cement 254 ITR 377 SC, CIT vs. Dhanraj Giriji Raja Narsinginji 94 ITR 544. It was also contended that contractual obligation and legal liability are not the touch stone to test commercial expediency, and relied on the decision in the case of CIT vs. Associated Electrical Agencies 266 ITR 63, CIT vs. Motor Industries Co. Ltd. 223 ITR 112 (Kar.), Udaipur Distillery C…

Sri Varalakshmi Jute Twine Mills Private Limited, Rajam vs. DCIT, Circle-4(1), Visakhapatnam

In the result, appeals filed by the Revenue in ITA

ITA 404/VIZ/2017[2013-2014]Status: DisposedITAT Visakhapatnam09 Feb 2018AY 2013-2014

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Bledcit, Circle-4(1), Vs. M/S. Sri Varalakshmi Jute Visakhapatnam. Twine Mills Pvt. Ltd., Bobbili Road, Rajam (Po), Srikakulam District. Pan No. Aadcs 1167 L Sri Varalakshmi Jute Twine Vs. Ito, Ward-3, Mills Pvt. Ltd., Bobbili Road, Srikakulam. Rajam (Po), Srikakulam Dist. Pan No. Aadcs 1167 L Acit, Circle-4(1), Vs. M/S. Sri Varalakshmi Jute Visakhapatnam. Twine Mills Pvt. Ltd., Bobbili Road, Rajam (Po), Srikakulam District. Pan No. Aadcs 1167 L Sri Varalakshmi Jute Twine Vs. Dcit, Circle-4(1), Mills Pvt. Ltd., Bobbili Road, Visakhapatnam. Rajam (Po), Srikakulam Dist. Pan No. Aadcs 1167 L (Appellants) (Respondents)

For Appellant: Shri Yogesh A. Thar &For Respondent: Shri T. Satyanandam – Sr.DR
Section 143(1)Section 143(3)

…i Jute Twine Mills Pvt. Ltd.) expediency has to be decided from the point of view of businessman and not by the subjective standard of reasonableness of revenue as held by Bombay High Court in CIT vs. Sales Magnesite P Ltd. 214 ITR 1 and CIT vs. Dalmia Cement 254 ITR 377 SC, CIT vs. Dhanraj Giriji Raja Narsinginji 94 ITR 544. It was also contended that contractual obligation and legal liability are not the touch stone to test commercial expediency, and relied on the decision in the case of CIT vs. Associated Electrical Agencies 266 ITR 63, CIT vs. Motor Industries Co. Ltd. 223 ITR 112 (Kar.), Udaipur Distillery C…