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 367,164 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.

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

In the results appeal filed by assessee for assessment year

ITA 2473/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…

M/S.Lifestyle International Private Limited, Bangalore vs. Deputy Commissioner of Income-Tax, Bangalore

In the results appeal filed by assessee for assessment year

ITA 2334/BANG/2016[2011-12]Status: DisposedITAT Bangalore11 Oct 2021AY 2011-12

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…

M/S.Lifestyle International Private Limited, Bangalore vs. Deputy Commissioner of Income-Tax, Bangalore

In the results appeal filed by assessee for assessment year

ITA 2333/BANG/2016[2009-10]Status: DisposedITAT Bangalore11 Oct 2021AY 2009-10

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…

Assistant Commissioner of Income-Tax, Bangalore vs. M/S. Lifestyle International (P) Ltd., Bangalore

In the results appeal filed by assessee for assessment year

ITA 2260/BANG/2016[2011-12]Status: DisposedITAT Bangalore11 Oct 2021AY 2011-12

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…

Bcl Securities Pvt Ltd, Gurgaon vs. ACIT Circle-4(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 1615/DEL/2020[2015-16]Status: DisposedITAT Delhi08 Oct 2021AY 2015-16

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri S.K. Tulsiyan, AdvFor Respondent: Ms. Rinku Singh, Sr.DR
Section 14ASection 28Section 36Section 37

…d for earning profits.” I.T.A. No.1615/DEL/2020 49 The Hon’ble Supreme Court of India in the case of Shiv Raj Gupta (supra). Further, the Hon’ble Delhi High Court (jurisdictional High Court) in the case of CIT vs Dalmia Cement (Bharat) Ltd reported in[2002] 254 ITR 377 had held that once it was 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 armchair of the businessman or in the position of the board of directors and assume the role to decide how…

M/S Shubham Cotton Mills Pvt. Ltd., Ellenabad vs. DCIT, Circle, Sirsa

In the result appeal of the assessee is allowed

ITA 1416/CHANDI/2019[2015-16]Status: DisposedITAT Chandigarh05 Oct 2021AY 2015-16
For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Shri Ashok Kumar, Addl. CIT
Section 133ASection 143(1)Section 143(3)Section 145(3)Section 234Section 234B

…hat the rates on which appellant had undertaken transactions were within prevailing market price on the said date even as per the rates quoted by market committee Ellenabad. The reliance was placed on the following case laws: • Dalmia Cement (P) Ltd. Vs. CIT 254 ITR 377 (Del) • S.A. Builders Ltd. 288 ITR 1 (SC) 6.6 The Ld. CIT after considering the submissions of the assessee and Remand Report of the A.O. sustained the addition by observing as under: The facts of the case, the basis of addition made by the AO after rejection of books of accounts and the arguments of the AR during the course of appellate procee…

Addl. CIT, Special Range- 03, New Delhi vs. Dlf Ltd., New Delhi

ITA 5941/DEL/2017[2012-13]Status: DisposedITAT Delhi10 Sept 2021AY 2012-13

Bench: Shri Amit Shukla & Prashant Maharishi

For Appellant: Shri Surender Pal, CIT-DRFor Respondent: S/Shri R.S. Singhvi & Satyajeet Goel
Section 14A

…ccordingly estimated ad-hoc disallowance @ 66.67% of the total expenses relating to aircraft and helicopter including depreciation. 15.2 The CIT(A) after placing reliance on the judgement of Hon’ble Delhi High Court in the case of Dalmia Cement (Bharat) Ltd. 254 ITR 377 held that assessing officer cannot question the reasonableness of the expenditure incurred for the purpose of business. On the basis of decision of Hon’ble Gujarat High Court in the case of Sayaji Iron and Engg. Co 253 ITR 749I, it was further held that assessee is a public ltd. company and being a distinct assessee, there cannot be a case of dis…

M/S P.S. Srijan Height Developers, Kolkata vs. PCIT-II, Kolkata

In the result, the appeal of the assessee is allowed

ITA 421/KOL/2020[2015-16]Status: DisposedITAT Kolkata09 Sept 2021AY 2015-16

Bench: Shri P. M. Jagtap, Vp & Shri A. T. Varkey]

Section 263

…had nexus with the business of the assessee. For coming to such conclusion, we rely on the decision of the Hon’ble Supreme Court in S. A. Builders Vs. CIT 288 ITR 1 (SC) wherein the view of the Hon’ble Delhi High Court in CIT v. Dalmia Cement (B.) Ltd. [2002] 254 ITR 377 was upheld by observing that, once it is established that there was nexus between the expenditure then the purpose of the business (which necessarily be the business of the assessee itself) the revenue cannot justifiably claim to put itself in the arm chair of the businessmen and further that no businessmen can be compelled to maximize its profit…

DCIT Corporate Circle 2(2), Chennai vs. Heal Kraft India Pvt. Limited, Chennai

In the result, the appeal filed by the assessee is partly allowed and the appeal filed by the Revenue is dismissed

ITA 3537/CHNY/2018[2010-11]Status: DisposedITAT Chennai08 Sept 2021AY 2010-11

Bench: Shri Duvvuru Rl Reddy & Shri G. Manjunatha

For Appellant: Shri T. Banusekar, CAFor Respondent: Shri G. Johnson, Addl.CIT
Section 14ASection 234BSection 37(1)

…e Court in the case of S.A.Builders Ltd V. CIT reported in 288 ITR 1 (SC) and in the case of Hero Cycles (P) Ltd V. CIT reported in 379 ITR 347 (SC) and also the decision of Hon’ble Delhi High Court in the case of CIT V. Dalmia Cement (Bharat) Ltd reported in 254 ITR 377 (Del), wherein it was held that the assessee’s nexus between the expenditure and the purpose of the business had to be looked into from the point of view of businessman and not from the point of the revenue. The ld AO cannot step into the shoes of the assessee to decide whether the expenditure is required to be incurred by the assessee or not. 1…

Healkraft Pharma India Pvt Ltd., Chennai vs. Addl.CIT Corporate Range- 2, Chennai

In the result, the appeal filed by the assessee is partly allowed and the appeal filed by the Revenue is dismissed

ITA 3345/CHNY/2018[2010-11]Status: DisposedITAT Chennai08 Sept 2021AY 2010-11

Bench: Shri Duvvuru Rl Reddy & Shri G. Manjunatha

For Appellant: Shri T. Banusekar, CAFor Respondent: Shri G. Johnson, Addl.CIT
Section 14ASection 234BSection 37(1)

…e Court in the case of S.A.Builders Ltd V. CIT reported in 288 ITR 1 (SC) and in the case of Hero Cycles (P) Ltd V. CIT reported in 379 ITR 347 (SC) and also the decision of Hon’ble Delhi High Court in the case of CIT V. Dalmia Cement (Bharat) Ltd reported in 254 ITR 377 (Del), wherein it was held that the assessee’s nexus between the expenditure and the purpose of the business had to be looked into from the point of view of businessman and not from the point of the revenue. The ld AO cannot step into the shoes of the assessee to decide whether the expenditure is required to be incurred by the assessee or not. 1…

Dy. Commissioner of Income Tax, Circle-2(1)., Hyderabad vs. Ksk Energy Company Private Limited, Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1663/HYD/2017[2014-15]Status: DisposedITAT Hyderabad30 Aug 2021AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…not correct. 33. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 585 also does not appear to be correct. 34. 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-2(1)., Hyderabad vs. Ksk Energy Company Private Limited, Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1121/HYD/2017[2013-14]Status: DisposedITAT Hyderabad30 Aug 2021AY 2013-14

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…not correct. 33. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 585 also does not appear to be correct. 34. 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-2(1)., Hyderabad vs. Ksk Energy Company Private Limited., Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1120/HYD/2017[2011-12]Status: DisposedITAT Hyderabad30 Aug 2021AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…not correct. 33. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 585 also does not appear to be correct. 34. 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…

DCIT, Circle-2(1), Hyderabad vs. Ksk Energy Company Private Limited, Hyderabad

In the result, all the appeals of revenue are allowed

ITA 1745/HYD/2016[2010-11]Status: DisposedITAT Hyderabad30 Aug 2021AY 2010-11

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri S. Rama RaoFor Respondent: Smt. Nivedita Biswas
Section 143(3)

…not correct. 33. Similarly, the view taken by the Bombay High Court in Phaltan Sugar Works Ltd. v. CIT [1995] 215 ITR 585 also does not appear to be correct. 34. 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…

M/S.Apollo Tyres Ltd vs. The Deputy Commissioner of Income Tax

ITA/272/2013HC Kerala04 Aug 2021

Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS

For Appellant: M/S.APOLLO TYRES LTDFor Respondent: THE DEPUTY COMMISSIONER OF INCOME TAX
Section 260A

…IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS WEDNESDAY, THE 4TH DAY OF AUGUST 2021 / 13TH SRAVANA, 1943 ITA NO. 272 OF 2013 AGAINST THE ORDER IN ITA 31/COCH/2010 OF I.T.A.TRIBUNAL, COCHIN BENCH, ERNAKULAM APPELLANT/ APPELLANT : M/S.APOLLO TYRES LTD., 6TH FLOOR, CHERUPUSHPAM BUILDINGS, SHANMUGHAM ROAD, KOCHI-31. (PAN NO:AAACA69900) BY ADVS. SRI.JOSEPH MARKOSE (SR.) SRI.V.ABRAHAM MARKOS SRI.ABRAHAM JOSEPH MARKOS SRI.ABRAHAM VARGHESE THARAKAN SRI.BINU MATHEW SRI.TOM THOMAS KAKKUZHIYIL RESPONDENT/ RESPONDENT : THE DE…

Swarn Gems P Ltd., New Delhi vs. ITO, New Delhi

Appeal of the assessee is allowed

ITA 473/DEL/2014[2007-08]Status: DisposedITAT Delhi04 Aug 2021AY 2007-08

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi

Section 133(6)Section 68

…he assessee company’s director submitted satisfactory clarification and Ld. AR also placed before us the vouchers for the expenses for A.Y. 2007-08. The Ld. AR relied upon the decision of the Hon’ble Delhi High Court in case of CIT vs. Dalmia Cement Pvt. Ltd. 254 ITR 377. 6. The Ld. DR relied upon the assessment order and the order of the CIT(A). The Ld. DR submitted that as regards Ground No. 1, the Assessing Officer as well as the CIT(A) has taken cognizance of the evidences produced at the time of assessment proceedings and, thereof, correctly made the additions. As regards Ground No. 2, the Ld. DR relied upon…

Ashish Jindal, Delhi vs. ITO Ward- 52(4), New Delhi

In the result, the appeal filed by the assessee is partly allowed

ITA 4383/DEL/2019[2015-16]Status: DisposedITAT Delhi03 Aug 2021AY 2015-16

Bench: Shri R.K. Pandaassessment Year: 2015-16 Ashish Jindal, Vs Ito, 8, Sundar Nagar, Ward-52(4), Delhi. New Delhi. Pan: Aexpj2013H (Appellant) (Respondent) Assessee By : Shri Ved Jain, Advocate & Shri Ashish Goel, Ca Revenue By : Shri Vijay Kumar Kataria, Sr. Dr Date Of Hearing : 26.07.2021 Date Of Pronouncement : 03.08.2021 Order This Appeal Filed By The Assessee Is Directed Against The Order Dated 11Th April, 2019 Of The Cit(A)-18, New Delhi, Relating To Assessment Year 2015-16. 2. This Appeal Was Earlier Dismissed By The Tribunal For Non-Prosecution. Subsequently, The Tribunal Recalled Its Order Vide Ma No.205/Del/2020, Order Dated 11.06.2021. Hence, This Is A Recalled Matter.

For Appellant: Shri Ved Jain, Advocate &For Respondent: Shri Vijay Kumar Kataria, Sr. DR
Section 36Section 36(1)(ii)Section 36(1)(iii)Section 37(1)

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC-1 : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER Assessment Year: 2015-16 Ashish Jindal, Vs ITO, 8, Sundar Nagar, Ward-52(4), Delhi. New Delhi. PAN: AEXPJ2013H (Appellant) (Respondent) Assessee by : Shri Ved Jain, Advocate & Shri Ashish Goel, CA Revenue by : Shri Vijay Kumar Kataria, Sr. DR Date of Hearing : 26.07.2021 Date of Pronouncement : 03.08.2021 ORDER This appeal filed by the assessee is directed against the order dated 11th April, 2019 of the CIT(A)-18, New Delhi, relating to assessment year 2015-16. 2. This appeal was earlier dismissed by…

ACIT, Circle- 7(1), New Delhi vs. Dlf Utilities Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 7800/DEL/2018[2013-14]Status: DisposedITAT Delhi30 Jul 2021AY 2013-14

Bench: Shri Kul Bharat & Shri O.P. Kant[Through Video Conferencing] Assessment Year: 2013-14

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

…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…

Mason Infrastructure Pvt. Ltd., New Delhi vs. DCIT, Circle- 16(2), New Delhi

In the result, appeal of the assessee is allowed

ITA 3409/DEL/2018[2013-14]Status: DisposedITAT Delhi23 Jul 2021AY 2013-14

Bench: Shri Prashant Maharishi & Shri K.Narasimha Chary

Section 143(3)

…ABW Infrastructiur and the same has been offered to tax by the assessee as income from other sources u/s.56 of the Act. Ld. AR placed reliance on the decisions reported in S.A. Builders Ltd. 158 Taxman 74/288 ITR 1 (SC), CIT v. Dalmia Cement Pvt Ltd. (2002) 254 ITR 377 (Del), and PCIT v. Reebok India Company[2018] 98 taxmann.com 413 (Delhi). 7. Per contra, it is the submission on behalf of the Revenue that the Ld. CIT(A) had taken into consideration the proximity of the transactions between OIPL and the assessee and the assessee and the M/S. ABW Infrastructure and is right in observing that the assessee appear…

DCIT, CC- 8(1), Mumbai vs. Nirshilp Securities Pvt. Ltd., Mumbai

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

ITA 6321/MUM/2019[2014-15]Status: DisposedITAT Mumbai21 Jun 2021AY 2014-15
Section 115JSection 143(3)Section 14A

…ing the loss in the normal course of the business is not doubted. For this, he placed reliance on the decision of Hon‟ble Supreme Court in the case of S A Builders reported in 288 ITR 1(SC) and Hon‟ble Delhi High Court in the case of Dalmia Cement reported in 254 ITR 377 (Del). w) In para 41, the ldCIT(A) relies on the decision of Mumbai Tribunal in the case of Conwest (P) Ltd. vs. First ITO reported in 7 ITD 314 and holds that the business loss appearing in the audited accounts needs to be allowed. x) In para 43, the ld CIT(A) takes note of the fact that the assessee company had offered the amount recovered fr…