CIT v. Dalmia Cement (Bharat) Ltd.

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

…ollects S. A. Builders 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 15 v. CIT (Appeals) [2007] 288 ITR 1 (SC) where the views of this Court in Commissioner of Income Tax 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”, and further that no businessman can be compelled to maximize his profit, were a…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

…ollects S. A. Builders 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 15 v. CIT (Appeals) [2007] 288 ITR 1 (SC) where the views of this Court in Commissioner of Income Tax 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”, and further that no businessman can be compelled to maximize his profit, were a…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

…ollects S. A. Builders 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 15 v. CIT (Appeals) [2007] 288 ITR 1 (SC) where the views of this Court in Commissioner of Income Tax 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”, and further that no businessman can be compelled to maximize his profit, were a…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

…ollects S. A. Builders 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 15 v. CIT (Appeals) [2007] 288 ITR 1 (SC) where the views of this Court in Commissioner of Income Tax 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”, and further that no businessman can be compelled to maximize his profit, were a…

Commissioner of Income Tax (C) -III vs. M/s Dd Industries Ltd

…ollects S. A. Builders 2015:DHC:2476-DB ITA Nos.512/2013, 516/2013, 517/2013, 518/2013, 519/2013 & 526/2013 Page 15 v. CIT (Appeals) [2007] 288 ITR 1 (SC) where the views of this Court in Commissioner of Income Tax 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”, and further that no businessman can be compelled to maximize his profit, were a…

Commissioner of Income Tax vs. Samsung India Electronics Ltd

In the result, all the three appeals filed by the revenue are dismissed with

…income tax authorities to disallow a part of the expenditure. In coming to the aforesaid conclusion the Tribunal relied on the following judgments : (i) CIT Vs. Walchand and Co. Private Ltd. (1967) 65 ITR 381 (ii) CIT Vs. Dalmia Cement (B) Ltd. (2002) 254 ITR 377 (Del.) (iii) Sassoon J. David and Co. (P)Ltd. Vs. CIT (1979) 118 ITR 261 (SC) On this basis the Tribunal allowed the assessee‟s appeal and dismissed the appeal filed by the revenue with the result that the entire expenditure of `6,93,81,635/- stood allowed. 2012:DHC:5445-DB ITA Nos.98, 113 & 143 of 2010…

CIT vs. Tei Technologies Pvt Ltd

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

…s an exemption or as a deduction, the net result is its immunity from taxation if the claim is allowed…….” 23. This Court considered a somewhat similar question, though not identical, in Commissioner of Income-Tax v. Dalmia Cement (Bharat) Ltd., (1980) 126 ITR 736. The question arose under the Companies (Profits) Surtax Act, 1964. Ranganathan, J. ITA Nos.347/2011 & 2067/2010 Page 24 of 32 (as he then was) referred to the judgment of E. S. Venkataramiah, J. (as he then was) of the Karnataka High Cou…

CIT vs. Tei Technologies Pvt Ltd

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

…s an exemption or as a deduction, the net result is its immunity from taxation if the claim is allowed…….” 23. This Court considered a somewhat similar question, though not identical, in Commissioner of Income-Tax v. Dalmia Cement (Bharat) Ltd., (1980) 126 ITR 736. The question arose under the Companies (Profits) Surtax Act, 1964. Ranganathan, J. ITA Nos.347/2011 & 2067/2010 Page 24 of 32 (as he then was) referred to the judgment of E. S. Venkataramiah, J. (as he then was) of the Karnataka High Cou…

CIT vs. Kribhco

…ITA No. 444/2011 Page 23 of 30 28. At this stage, we may refer to the decision of Delhi High Court in CIT vs. Dalmia Cement (Bharat) Ltd., (1980) 126 ITR 736, approved in Second ITO versus Stumpp, Schuele & Somappa Pvt. Ltd. (1991) 187 ITR 108 (SC). In this case, the High Court was examining Rule 4 of Second Schedule to the Companies (Profits) Surtax Act, 1964 and whether deductions under Chapter VIA were part of income not included in the total income computed under the Act. The said Rule 4 w…

Commissioner of Income Tax

…ITA No. 444/2011 Page 23 of 30 28. At this stage, we may refer to the decision of Delhi High Court in CIT vs. Dalmia Cement (Bharat) Ltd., (1980) 126 ITR 736, approved in Second ITO versus Stumpp, Schuele & Somappa Pvt. Ltd. (1991) 187 ITR 108 (SC). In this case, the High Court was examining Rule 4 of Second Schedule to the Companies (Profits) Surtax Act, 1964 and whether deductions under Chapter VIA were part of income not included in the total income computed under the Act. The said Rule 4 w…

Commissioner of Income Tax Delhi IV vs. Agra Beverages Corporation P. Ltd

…enditure some third party has benefited cannot be a reason to disallow the expenditure. Instead of analyzing that judgment in detail, our purpose would be served by referring to a Division Bench judgment of this court in CIT Vs. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377, wherein the judgment of Supreme Court in Sassoon case (supra) and some other judgments are taken note of, analysed and the principles laid down therein are succinctly culled out. Examining and interpreting the provisions of Section 37 of the Act, the Court expressed that the true import of the expression "wholly or exclusively" appearing in Sect…

Commissioner of Income Tax vs. Bharti Televenture Ltd

…d such amount to its sister concern as a measure of commercial expediency? The law laid down by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT (1995) 215 ITR 582 was overruled whereas that of Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. (2002) 254 ITR 377 was approved. It was further held that it all depends on the facts and circumstance of the case as to whether the directors of the sister concern utilized the amount advanced to it by the assessee for their personal benefit, which obviously could not be said to be an advance as a measure of commercial expediency.  ![…

Commissioner of Income Tax vs. Bharti Televenture Ltd

…d such amount to its sister concern as a measure of commercial expediency? The law laid down by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT (1995) 215 ITR 582 was overruled whereas that of Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. (2002) 254 ITR 377 was approved. It was further held that it all depends on the facts and circumstance of the case as to whether the director s of the sister concern utilized the amount advanced to it by the assessee for their personal benefit, which obviously could not be said to be an advance as a measure of commercial expediency. Page 10 of 12 ![](_page_10_Pic…

Punjab Stainless Steel Industries vs. Commissioner of Income Tax Delhi VII & Anr

Bench: HON'BLE MR. JUSTICE BADAR DURREZ AHMED,HON'BLE MR. JUSTICE V.K. JAIN

…borrowed funds, advanced to a third party, should be for commercial expediency if it is sought to be allowed under Section 36(1)(iii) of the Income Tax Act. The Court agreed with the view taken by this Court in CIT v. Dalmia Cement (B.) Limited : (2002) 254 ITR 377, holding that once it is established that there was nexus between the expenditure and the purpose of business, the Revenue cannot justifiably claim to put itself in the arm-chair of the businessman or in the position of a Board of Directors and assume the role to decide how much is reasonable expenditure, having regard to the circum…