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.

ACIT Non Corp Circle 2, Coimbatore vs. M.Palanisamy, Coimbatore

In the result, appeal filed by the assessee is allowed for statistical purposes

ITA 1515/CHNY/2017[2012-13]Status: DisposedITAT Chennai28 Feb 2022AY 2012-13

Bench: Shri V. Durga Rao & Shri G. Manjunatha

For Appellant: 04.01.2022For Respondent: Mr. S.Sridhar, Advocate
Section 40A(2)(a)

…dependent parties cannot be dictated by the AO. It has been held by Hon’ble Supreme Court in the case of S.A. Builders Ltd., Vs. CIT [2007] 288 ITR 1 as below: “We agree with the view taken by the Delhi High Court in CIT V. Dalmia 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…

ACIT Non Corp Circle 2, Coimbatore vs. M.Palanisamy, Coimbatore

In the result, appeal filed by the assessee is allowed for statistical purposes

ITA 1514/CHNY/2017[2011-12]Status: DisposedITAT Chennai28 Feb 2022AY 2011-12

Bench: Shri V. Durga Rao & Shri G. Manjunatha

For Appellant: 04.01.2022For Respondent: Mr. S.Sridhar, Advocate
Section 40A(2)(a)

…dependent parties cannot be dictated by the AO. It has been held by Hon’ble Supreme Court in the case of S.A. Builders Ltd., Vs. CIT [2007] 288 ITR 1 as below: “We agree with the view taken by the Delhi High Court in CIT V. Dalmia 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…

Dy. Commissioner of Income Tax, Circle-3(1), Hyderabad vs. Raghu Rama Renewable Energy Limited, Hyderabad

Appeal is allowed for statistical purposes in above terms

ITA 1083/HYD/2019[2015-16]Status: DisposedITAT Hyderabad21 Feb 2022AY 2015-16

Bench: Shri S.S. Godara & Shri Inturi Rama Raoassessment Year: 2015-16 The Deputy Commissioner Vs. Raghu Rama Renewable Of Income Tax, Energy Limited, Circle 3(1), Hyderabad. Hyderabad. Pan : Aaccr0809F. (Appellant) (Respondent) Assessee By: Shri Samuel Nagadesi Revenue By: Shri Rohit Mujumdar. Date Of Hearing: 17.02.2022 Date Of Pronouncement: 21.02.2022 O R D E R Per S. S. Godara, J.M. This Revenue’S Appeal For A.Y. 2015-16 Arises From The Commissioner Of Income Tax (Appeals) – 11, Hyderabad’S Order Dated 28.12.2018 In Case No.375/2017-18/Dcit Cc- 1(2)/Cit(A)-11/2018-19/Hyd, Involving Proceedings U/S 143(3) Of The Income Tax Act, 1961 [In Short, ‘The Act’]. Heard Both The Parties. Case File Perused. 2. The Revenue’S First & Foremost Substantive Grievance Challenges Correctness Of The Cit(A)’S Action Deleting Section 36(1)(Iii) Interest Expenditure Disallowance Of Rs.17,11,356/- Made By The Assessing Officer In His Assessment Order Dt.29.12.2017. The Cit(A)’S Appellate Discussion To This Affect Reads As Under :

For Appellant: Shri Samuel NagadesiFor Respondent: Shri Rohit Mujumdar
Section 143(3)Section 271(1)(c)Section 36(1)(iii)

…thout interruptions". 4.1.2. The assessee relied on the ratio laid down in the following cases : (i) S.A. Builders Ltd. Vs. CIT 288 ITR 1 (SC) (ii) Hero Cycles Pvt. Ltd. Vs. CIT (Civil Appeal 514 of 2008) (iii) CIT Vs. Dalmia Cement (Bharat) Ltd (Bharath) Ltd 254 ITR 377 (Del). 4.2) I have considered the assessment order submissions of the assessee. The fact that the assessee has taken loans on which interest is being charged whereas the assessee has advanced amounts to sister concerns free of interest is not in dispute. The amounts are used by sister concerns for their business is also not in dispute. Applying t…

ACIT -3(1)(1), Mumbai vs. M/S. Rideema Toll P. Ltd., Mumbai

In the result, this appeal is dismissed

ITA 521/MUM/2021[2017-18]Status: DisposedITAT Mumbai09 Feb 2022AY 2017-18
Section 143(3)Section 36(1)(iii)

…to establish nexus between the borrowing and advancing to prove that expenditure was for non-business purpose which Assessing Officer failed to do. The Hon’ble Supreme Court has also cited from the judgment of the Delhi High Court in CIT Vs Dalmia Cement Ltd 254 ITR 377 and agreed with the view that once it is established there is nexus between expenditure and purpose of business (which need not necessarily be business of assessee itself ) the test of commercial expediency is satisfied. In view of the facts on the case and the judicial precedents, investment in its subsidiary company by the appellant was out of…

Matrix Cellular Services Pvt. Ltd., New Delhi vs. DCIT, Circle- 16(2), New Delhi

In the result, the appeal of the assessee is dismissed

ITA 5846/DEL/2018[2015-16]Status: DisposedITAT Delhi08 Feb 2022AY 2015-16

Bench: Sh. A. D. Jain, Vice-Dr. B. R. R. Kumarita No. 5846/Del/2018 : Asstt. Year : 2015-16 Matrix Cellular Services Pvt. Ltd., Vs Dcit, 7, Khullar Farm, Mandi Road, Circle-16(2), Mehrauli, New Delhi-110030 New Delhi (Appellant) (Respondent) Pan No. Aabcm9420A Assessee By : Sh. A. K. Khanna, Ca Revenue By : Ms. Alka Gautam, Sr. Dr Date Of Hearing: 07.12.2021 Date Of Pronouncement: 08.02.2022

For Appellant: Sh. A. K. Khanna, CAFor Respondent: Ms. Alka Gautam, Sr. DR

…ribe what the expenditure assessee should incur. In the instant involves the issue whether the expenditure incurred was for business purpose or not, which has not been proved by the assessee. The decision of the Hon’ble High court in the case of Dalmia Cement 254 ITR 377 dealing with the issue of Section 37(1) allowances held that there was a nexus between expenditure and the purpose of the business. In the instant case, the expenditure of interest for which the loan has been received has not been shown to be for the purpose of the business. We are not swayed by the observation of the Assessing Officer that earli…

DCIT, New Delhi vs. M/S. Jagson International Ltd., New Delhi

In the result, ITA.No.276/Del

ITA 276/DEL/2017[2014-15]Status: DisposedITAT Delhi31 Jan 2022AY 2014-15

Bench: Shri R.K. Panda & Shri Narendra Kumar Choudhary

For Appellant: Shri Rahul PrabhakarFor Respondent: Shri P.C. Maurya, CIT
Section 115JSection 14A

…board of directors and assume the role to decide how much is the reasonable expenditure having regard to the circumstances of the case, in the said decision, the Hon'ble Supreme Court approved of the view taken by Delhi High Court in Dalmia Cement Pvt. Ltd. (254 ITR 377) and disapproved of the Punjab & Haryana High Court decision in the case of Abhishek Industries (286 ITR). Incidentally in the case of Hero Cycles, it was found that the interest liability of the assessee towards the bank on borrowings made had no bearings on the issue as otherwise, the assessee had sufficient funds of its own to advance the fund…

DCIT, New Delhi vs. M/S. Jagson International Ltd., New Delhi

In the result, ITA.No.276/Del

ITA 1002/DEL/2016[2013-14]Status: DisposedITAT Delhi31 Jan 2022AY 2013-14

Bench: Shri R.K. Panda & Shri Narendra Kumar Choudhary

For Appellant: Shri Rahul PrabhakarFor Respondent: Shri P.C. Maurya, CIT
Section 115JSection 14A

…board of directors and assume the role to decide how much is the reasonable expenditure having regard to the circumstances of the case, in the said decision, the Hon'ble Supreme Court approved of the view taken by Delhi High Court in Dalmia Cement Pvt. Ltd. (254 ITR 377) and disapproved of the Punjab & Haryana High Court decision in the case of Abhishek Industries (286 ITR). Incidentally in the case of Hero Cycles, it was found that the interest liability of the assessee towards the bank on borrowings made had no bearings on the issue as otherwise, the assessee had sufficient funds of its own to advance the fund…

DCIT, New Delhi vs. M/S. Jagson International Ltd., New Delhi

In the result, ITA.No.276/Del

ITA 1001/DEL/2016[2012-13]Status: DisposedITAT Delhi31 Jan 2022AY 2012-13

Bench: Shri R.K. Panda & Shri Narendra Kumar Choudhary

For Appellant: Shri Rahul PrabhakarFor Respondent: Shri P.C. Maurya, CIT
Section 115JSection 14A

…board of directors and assume the role to decide how much is the reasonable expenditure having regard to the circumstances of the case, in the said decision, the Hon'ble Supreme Court approved of the view taken by Delhi High Court in Dalmia Cement Pvt. Ltd. (254 ITR 377) and disapproved of the Punjab & Haryana High Court decision in the case of Abhishek Industries (286 ITR). Incidentally in the case of Hero Cycles, it was found that the interest liability of the assessee towards the bank on borrowings made had no bearings on the issue as otherwise, the assessee had sufficient funds of its own to advance the fund…

ACIT, New Delhi vs. M/S Krishak Bharati Cooperative Ltd., New Delhi

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

ITA 2973/DEL/2017[2011-12]Status: DisposedITAT Delhi29 Dec 2021AY 2011-12

Bench: Shri Anil Chaturvedi & Shri Kul Bharat

Section 143(3)Section 14ASection 263

…n the total income and only deduction u/s 80P(2)(d) has been claimed under Chapter VIA, wherein the Hon'ble Delhi High Court has held as under: "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 was as un…

ACIT, New Delhi vs. M/S Krishak Bharati Cooperative Ltd., New Delhi

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

ITA 2972/DEL/2017[2010-11]Status: DisposedITAT Delhi29 Dec 2021AY 2010-11

Bench: Shri Anil Chaturvedi & Shri Kul Bharat

Section 143(3)Section 14ASection 263

…n the total income and only deduction u/s 80P(2)(d) has been claimed under Chapter VIA, wherein the Hon'ble Delhi High Court has held as under: "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 was as un…

M/S. Krishak Bharti Cooperative Ltd., New Delhi vs. ACIT, New Delhi

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

ITA 2342/DEL/2017[2011-12]Status: DisposedITAT Delhi29 Dec 2021AY 2011-12

Bench: Shri Anil Chaturvedi & Shri Kul Bharat

Section 143(3)Section 14ASection 263

…n the total income and only deduction u/s 80P(2)(d) has been claimed under Chapter VIA, wherein the Hon'ble Delhi High Court has held as under: "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 was as un…

M/S. Krishak Bharti Cooperative Ltd., New Delhi vs. ACIT, New Delhi

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

ITA 2341/DEL/2017[2010-11]Status: DisposedITAT Delhi29 Dec 2021AY 2010-11

Bench: Shri Anil Chaturvedi & Shri Kul Bharat

Section 143(3)Section 14ASection 263

…n the total income and only deduction u/s 80P(2)(d) has been claimed under Chapter VIA, wherein the Hon'ble Delhi High Court has held as under: "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 was as un…

Deepak Nagindas Shah, Mumbai vs. ACIT Circle-19 (1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 7032/MUM/2019[2014-15]Status: DisposedITAT Mumbai22 Dec 2021AY 2014-15

Bench: Shri Om Prakash Kant & Shri Amarjit Singhassessment Year: 2014-15 Deepak Nagindas Shah, Acit, Circle – 19(1), 506-B, Walkeshwar Chandanwala 2Nd Floor, Matru Mandir, Chs Ltd. 4, R. R. Thakkar Road, Tardeo Road, Walkeshwar, Vs. Mumbai - 400007 Mumbai - 400006 Pan: Aaqps1861H (Appellant) (Respondent) Assessee By : Mr. Suchek Anchaliya (Ar) Revenue By : Ms. Rajni Roy (Dr) Date Of Hearing : 02/12/2021 Date Of Pronouncement: 22/12/2021

For Appellant: Mr. Suchek Anchaliya (AR)For Respondent: Ms. Rajni Roy (DR)
Section 10Section 143(3)Section 14A

…ilarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. vs. Commissioner of Wealth-Tax (1995) 215 ITR 582 also does not appear to be 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 CC 7 (2), Mumbai vs. M/S Man Global Ltd., Mumbai

In the result, all the appeals of the Revenue are dismissed and cross objections of the assessee in CO Nos

ITA 7440/MUM/2019[2011-12]Status: DisposedITAT Mumbai25 Nov 2021AY 2011-12

Bench: Sri Rajesh Kumar, Am & Sri Amarjit Singh, Jm आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं./ Ita No. 7440/Mum/2019 अपील (िनधा"रण वष" / Assessment Year 2011-12) आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं./ Ita No. 7533/Mum/2019 अपील (िनधा"रण वष" / Assessment Year 2012-13) आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं./ Ita No. 7534/Mum/2019 अपील (िनधा"रण वष" / Assessment Year 2013-14) आयकर अपील आयकर अपील संसंसंसं./ Ita No. 7535/Mum/2019 आयकर आयकर अपील अपील (िनधा"रण वष" / Assessment Year 2014-15) आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं./ Ita No. 7536/Mum/2019 अपील (िनधा"रण वष" / Assessment Year 2015-16)

…t was incurred on grounds of commercial expediency. In this case the AO has not verified whether the service charges paid was for commercial expediency. 11.6 I also agree with the view taken by the Delhi High Court In CIT vs. Dalms Cement (Bhart) Lid. (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…

Shri Rajesh Natani, Jaipur vs. ITO, Ward-4(5), Jaipur

In the result, this appeal of the assessee is allowed

ITA 234/JPR/2020[2015-16]Status: DisposedITAT Jaipur23 Nov 2021AY 2015-16

Bench: Shri Sandeep Gosain, Jm & Shri Vikram Singh Yadav, Am Vk;Dj Vihy La-@Ita No. 233 & 234/Jp/2020 Fu/Kzkj.K O"Kz@Assessment Years :2014-15 & 2015-16 Rajesh Natani, Cuke I.T.O. Vs. A-2, Subhash Nagar, Shastri Nagar, Ward-4(5), Jaipur-302016 (Raj) Jaipur. Lfkk;H Ys[Kk La-@Thvkbzvkj La-@Pan/Gir No.: Aaacn 5961 E Vihykfkhz@Appellant Izr;Fkhz@Respondent Fu/Kzkfjrh Dh Vksj Ls@ Assessee By : Shri G.N. Sharma (Adv) Jktlo Dh Vksj Ls@ Revenue By: Smt. Monisha Choudhary (Jcit) Lquokbz Dh Rkjh[K@ Date Of Hearing : 09/11/2021 Mn?Kks"K.Kk Dh Rkjh[K@ Date Of Pronouncement : 23/11/2021 Vkns'K@ Order Per: Sandeep Gosain, J.M. Both These Appeals Have Been Filed By The Assessee Against The Separate Orders Of The Ld. Cit(A), Ajmer Dated 17/10/2019 For The A.Y. 2014-15 & 2015-16 Respectively.

For Appellant: Shri G.N. Sharma (Adv)For Respondent: Smt. Monisha Choudhary (JCIT)
Section 253Section 36(1)(iii)

…ndigarh and Others, order dated 14/12/2006 reported in AIR 2007 SC 482, (2007)1 SCC 781, MANU/SC/8798/2006 wherein it was held as under: “20. We agree with the view taken by the Delhi High Court in CIT V. Dalmia Cement (Bhart) Ltd. MANU/DE/0309/2002 :[2002] 254 ITR 377 16 ITA 233 & 234/JP/2020_ Rajesh Natani Vs ITO (Delhi) that once it is established that there was nexus between expenditure and the purpose of the business (which need not necessarily be the business the assessee itself), the revenue cannot justifiably claim to put itself in the arm-chair of businessmen or in the position of the board of directo…

Shri Rajesh Natani, Jaipur vs. ITO, Ward-4(5), Jaipur

In the result, this appeal of the assessee is allowed

ITA 233/JPR/2020[2014-15]Status: DisposedITAT Jaipur23 Nov 2021AY 2014-15

Bench: Shri Sandeep Gosain, Jm & Shri Vikram Singh Yadav, Am Vk;Dj Vihy La-@Ita No. 233 & 234/Jp/2020 Fu/Kzkj.K O"Kz@Assessment Years :2014-15 & 2015-16 Rajesh Natani, Cuke I.T.O. Vs. A-2, Subhash Nagar, Shastri Nagar, Ward-4(5), Jaipur-302016 (Raj) Jaipur. Lfkk;H Ys[Kk La-@Thvkbzvkj La-@Pan/Gir No.: Aaacn 5961 E Vihykfkhz@Appellant Izr;Fkhz@Respondent Fu/Kzkfjrh Dh Vksj Ls@ Assessee By : Shri G.N. Sharma (Adv) Jktlo Dh Vksj Ls@ Revenue By: Smt. Monisha Choudhary (Jcit) Lquokbz Dh Rkjh[K@ Date Of Hearing : 09/11/2021 Mn?Kks"K.Kk Dh Rkjh[K@ Date Of Pronouncement : 23/11/2021 Vkns'K@ Order Per: Sandeep Gosain, J.M. Both These Appeals Have Been Filed By The Assessee Against The Separate Orders Of The Ld. Cit(A), Ajmer Dated 17/10/2019 For The A.Y. 2014-15 & 2015-16 Respectively.

For Appellant: Shri G.N. Sharma (Adv)For Respondent: Smt. Monisha Choudhary (JCIT)
Section 253Section 36(1)(iii)

…ndigarh and Others, order dated 14/12/2006 reported in AIR 2007 SC 482, (2007)1 SCC 781, MANU/SC/8798/2006 wherein it was held as under: “20. We agree with the view taken by the Delhi High Court in CIT V. Dalmia Cement (Bhart) Ltd. MANU/DE/0309/2002 :[2002] 254 ITR 377 16 ITA 233 & 234/JP/2020_ Rajesh Natani Vs ITO (Delhi) that once it is established that there was nexus between expenditure and the purpose of the business (which need not necessarily be the business the assessee itself), the revenue cannot justifiably claim to put itself in the arm-chair of businessmen or in the position of the board of directo…

Indira Constructions Private Limited, Hyderabad vs. DCIT, Central Circle-2(4), Hyderabad

In the result, all the appeals of the assessee are dismissed in above terms

ITA 396/HYD/2017[2010-11]Status: DisposedITAT Hyderabad28 Oct 2021AY 2010-11

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri A.V. RaghuramFor Respondent: Shri Rohit Mujumdar
Section 143(3)

…advance was given for commercial expediency. Further in Calico Dyeing & Printing Works vs CIT (1958) 34 ITR 265 (Bom.) it was held that if however the capital borrowed is not utilized for the purpose of the business. In CIT vs. Dalmia Cement (B) Ltd., (2002) 254 ITR 377 (Delhi), that no businessmen need be compelled to maximize his profit. The authorities should put themselves in the shoes of the assessee and consider what a prudent businessman would do. It is not the case of Income Tax department, that the funds lent to the subsidiary company were used for non-business purposes." 5.3 Perused the submissions of…

Indira Constructions Private Limited, Hyderabad vs. ACIT, Central Circle-2(4), Hyderabad

In the result, all the appeals of the assessee are dismissed in above terms

ITA 395/HYD/2017[2009-10]Status: DisposedITAT Hyderabad28 Oct 2021AY 2009-10

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri A.V. RaghuramFor Respondent: Shri Rohit Mujumdar
Section 143(3)

…advance was given for commercial expediency. Further in Calico Dyeing & Printing Works vs CIT (1958) 34 ITR 265 (Bom.) it was held that if however the capital borrowed is not utilized for the purpose of the business. In CIT vs. Dalmia Cement (B) Ltd., (2002) 254 ITR 377 (Delhi), that no businessmen need be compelled to maximize his profit. The authorities should put themselves in the shoes of the assessee and consider what a prudent businessman would do. It is not the case of Income Tax department, that the funds lent to the subsidiary company were used for non-business purposes." 5.3 Perused the submissions of…

Indira Constructions Private Limited, Hyderabad vs. ACIT, Central Circle-2(4), Hyderabad

In the result, all the appeals of the assessee are dismissed in above terms

ITA 394/HYD/2017[2007-08]Status: DisposedITAT Hyderabad28 Oct 2021AY 2007-08

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri A.V. RaghuramFor Respondent: Shri Rohit Mujumdar
Section 143(3)

…advance was given for commercial expediency. Further in Calico Dyeing & Printing Works vs CIT (1958) 34 ITR 265 (Bom.) it was held that if however the capital borrowed is not utilized for the purpose of the business. In CIT vs. Dalmia Cement (B) Ltd., (2002) 254 ITR 377 (Delhi), that no businessmen need be compelled to maximize his profit. The authorities should put themselves in the shoes of the assessee and consider what a prudent businessman would do. It is not the case of Income Tax department, that the funds lent to the subsidiary company were used for non-business purposes." 5.3 Perused the submissions of…

M/S Lifestyle International Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-4(1)(1), Bangalore

In the results appeal filed by assessee for assessment year

ITA 2826/BANG/2017[2012-13]Status: DisposedITAT Bangalore11 Oct 2021AY 2012-13

Bench: Shri Chandra Poojari & Smt Beena Pillai

Section 143(2)

…nse has to be incurred or not. Merely because there is expert management and team and resources, it cannot be contended that the expenditure was not at all required. The Hon’ble Delhi High Court in the case of CIT v. Dalmia Cement (P.) Ltd. reported in [2002] 254 ITR 377 (Delhi) had held that “the jurisdiction of the revenue is confined to deciding reality of the expenditure, namely, whether the amount claimed as deduction was factually expended or laid down and whether it was wholly and exclusively for the purpose of the business. The reasonableness of the expenditure could be gone into only for the purpose of d…