CIT v. Edward Keventer (P.) Ltd.

86 ITR 370High Court1972#5094 most cited

What is CIT v. Edward Keventer (P.) Ltd. authority for?

The Assessing Officer (AO) must consider the legitimate business needs and benefits of a company from the perspective of a prudent businessman, rather than dictating the company's business needs or methods.

23

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2011 to 2026.

Also referred to as

CIT v. Edward Keventer (P.) Ltd. · section 40a(2) · prudent businessman · legitimate business needs · commercial expediency · AO's powers · reasonableness of expenditure · business expenses

Sections most often in play

Section 11Section 12Section 12ASection 143(3)

Issues it is cited on

section 40a(2)(a)legal expensesclosely held companymanagement feessection 40a(2)(b)section 40a(2)maximum marginal rateenduring benefitsection 40afair market valuesection 260section 30

Judgments citing CIT v. Edward Keventer (P.) Ltd.

Income Tax Officer(E) Ward- 2(4), New Delhi, Civic Centre New Delhi vs. Prakash Sewa Trust, Paschim Vihar

ITA 4305/DEL/2024[2016-17]Status: DisposedITAT Delhi07 Jan 2026AY 2016-17

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwal

Section 11Section 12ASection 143(3)

…enial of exemption u/s 11. 7.4 Whether AO cannot dictate the appellant trust whether it can sale its trust property and the way in which it can sale its trust property - Hon'ble Calcutta High Court in the case of CIT Vs. Edward Keventer (Private) Ltd. (1972) (86 ITR 370) has been held that "It is not for the Assessing Officer to dictate what the business needs of the company should be and he is only to judge the legitimacy of the business needs of the company from the point of view of a prudent businessman". Thus, it is not for the AO to judge as how the transactions has been carried out by the appellant trust. T…

M/S Sanofi India Ltd (Formerly Known As Aventis Pharma Ltd, Mumbai vs. The ACIT RG 8(1), Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1606/MUM/2007[2003-2004]Status: DisposedITAT Mumbai31 Oct 2023AY 2003-2004

Bench: Shri Vikas Awasthy, Hon’Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 271(1)(c)

…r entire position dispassionately, judiciously and objectively from point ofview of prudent businessman and not capriciously, routinely, arbitrarily, subjectively and in a prejudiced manner with a view to collect more revenue [CIT v. EDWARD KEVENTER (PVT) LTD 86 ITR 370 (CAL) affirmed in 115 ITR 149 (SC). Relying upon aforesaid circular, Bombay High Court in CIT V. INDO SAUDI SERVICES (TRAVELS) PVT LTD 310 ITR 306, held that if revenue fails to demonstrate how tax is Page No.| 26 ITA.NO.1606 & 1302/MUM/2007 (A.Y: 2003-04) ITA.NO.1128/MUM/2009 (A.Y. 2003-04) ITA.NO. 5939 & 6548/MUM/2010 (A.Y. 2004-05) ITA.NO. 674…

ACIT- 3(1)(1), Mumbai vs. Mm/S Sanofi India Limited (Formerly Known As Aventis Pharma Ltd)., Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1302/MUM/2007[2003-2004]Status: DisposedITAT Mumbai31 Oct 2023AY 2003-2004

Bench: Shri Vikas Awasthy, Hon’Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 271(1)(c)

…r entire position dispassionately, judiciously and objectively from point ofview of prudent businessman and not capriciously, routinely, arbitrarily, subjectively and in a prejudiced manner with a view to collect more revenue [CIT v. EDWARD KEVENTER (PVT) LTD 86 ITR 370 (CAL) affirmed in 115 ITR 149 (SC). Relying upon aforesaid circular, Bombay High Court in CIT V. INDO SAUDI SERVICES (TRAVELS) PVT LTD 310 ITR 306, held that if revenue fails to demonstrate how tax is Page No.| 26 ITA.NO.1606 & 1302/MUM/2007 (A.Y: 2003-04) ITA.NO.1128/MUM/2009 (A.Y. 2003-04) ITA.NO. 5939 & 6548/MUM/2010 (A.Y. 2004-05) ITA.NO. 674…

Anuj Bansal, New Delhi vs. ACIT, CC-14, New Delhi

In the result, the appeal filed by the Assessee is allowed

ITA 1016/DEL/2021[2017-18]Status: DisposedITAT Delhi29 Apr 2022AY 2017-18

Bench: Shri R.K. Panda & Shri N. K. Choudhry[Assessment Year: 2017-18]

Section 131Section 132Section 132(4)Section 133ASection 143(2)Section 153A

…e shoes of he assesses and see how a prudent businessman would act; and that the authorities must not look at the matter from their view point, but that of a prudent businessman impelled by commercial expediency. • In CIT Vs. 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 expenditure incurred must take into consideration (i) the legitimate busines…

ACIT, New Delhi vs. M/S Opus Projects Ltd., Delhi

Appeal is dismissed

ITA 5470/DEL/2016[2012-13]Status: DisposedITAT Delhi19 Jan 2021AY 2012-13

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri C. S. Anand, AdvFor Respondent: Shri H. K. Chaudhary, CIT DR
Section 30Section 40Section 40A

…ng has to be considered judiciously, dispassionately and without any bias from viewpoint of a reasonable and honest person in business. Aforesaid ratio elucidated relies and refers to several earlier judgments including CIT v. Edward Keventer (P.) Ltd. [1972] 86 ITR 370 (Cal) which was affirmed by Hon Supreme Court in CIT v. Edward Keventer (P.) Ltd. [1978] 115 ITR 149 (SC) and CIT v. Shatrunjay Diamonds [2003] 261 ITR 258/128 Taxman 759 (Bom). Similar view has been expressed by Hon. Delhi High Court in Sigma Corpn. India Ltd. v. Dy. CIT [IT Appeal No. 795 of 2016, dated 15-2- 2017]. Assessee company as well as s…

DCIT, New Delhi vs. M/S. Opus Projects Ltd., New Delhi

Appeal is dismissed

ITA 3939/DEL/2015[2011-12]Status: DisposedITAT Delhi19 Jan 2021AY 2011-12

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri C. S. Anand, AdvFor Respondent: Shri H. K. Chaudhary, CIT DR
Section 30Section 40Section 40A

…ng has to be considered judiciously, dispassionately and without any bias from viewpoint of a reasonable and honest person in business. Aforesaid ratio elucidated relies and refers to several earlier judgments including CIT v. Edward Keventer (P.) Ltd. [1972] 86 ITR 370 (Cal) which was affirmed by Hon Supreme Court in CIT v. Edward Keventer (P.) Ltd. [1978] 115 ITR 149 (SC) and CIT v. Shatrunjay Diamonds [2003] 261 ITR 258/128 Taxman 759 (Bom). Similar view has been expressed by Hon. Delhi High Court in Sigma Corpn. India Ltd. v. Dy. CIT [IT Appeal No. 795 of 2016, dated 15-2- 2017]. Assessee company as well as s…

DCIT, New Delhi vs. M/S. Opus Projects Ltd., New Delhi

Appeal is dismissed

ITA 3938/DEL/2015[2010-11]Status: DisposedITAT Delhi19 Jan 2021AY 2010-11

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri C. S. Anand, AdvFor Respondent: Shri H. K. Chaudhary, CIT DR
Section 30Section 40Section 40A

…ng has to be considered judiciously, dispassionately and without any bias from viewpoint of a reasonable and honest person in business. Aforesaid ratio elucidated relies and refers to several earlier judgments including CIT v. Edward Keventer (P.) Ltd. [1972] 86 ITR 370 (Cal) which was affirmed by Hon Supreme Court in CIT v. Edward Keventer (P.) Ltd. [1978] 115 ITR 149 (SC) and CIT v. Shatrunjay Diamonds [2003] 261 ITR 258/128 Taxman 759 (Bom). Similar view has been expressed by Hon. Delhi High Court in Sigma Corpn. India Ltd. v. Dy. CIT [IT Appeal No. 795 of 2016, dated 15-2- 2017]. Assessee company as well as s…

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)

…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 derived by or accruing to the company, and that while doing so, the view point of the company or concern having rega…

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)

…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 derived by or accruing to the company, and that while doing so, the view point of the company or concern having rega…

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)

…business considerations, the deductibility of the expenditure should be considered from the point of view of the businessman and not from the point of view of any outsider, including the Assessing Officer. Sir, in CIT Vs. Edward Keventer (Private) 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 expenditure incurred must take into consideration (i) the legitimate business…

Sigma Research & Consulting Pvt. Ltd vs. Commissioner of Income Tax & Anr

The appeal is allowed and the addition made under Section 40A(2)(a) of the Act

ITA/120/2018HC Delhi12 Dec 2018

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI

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

…be considered judiciously, dispassionately and without any bias from the view-point of a reasonable and honest person in business. Aforesaid ratio elucidated relies and refers to several earlier judgments including CIT vs. Edward Keventer Pvt. Ltd., (1972) 86 ITR 370 (Cal) ITA 120/2018 page 6 of 9 which was affirmed by the Supreme Court in CIT Vs. Edward Keventer Pvt. Ltd. (1978) 115 ITR 149 (SC) and CIT vs. Shatrunjay Diamonds (2003) 261 ITR 258 (Bom). Similar view has been expressed by the Delhi High Court in Sigma Corporation India Ltd. vs. DCIT, ITA No. 795/2016 decided on 15.02.2017.…

M/S Loesche India Pvt. Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, the appeal is allowed

ITA 295/DEL/2016[2010-11]Status: DisposedITAT Delhi13 Aug 2018AY 2010-11

Bench: : Shri Amit Shukla & Shri L.P. Sahuassessment Year: 2010-11

Section 17(2)(iv)Section 37Section 37(1)

…e section is wider in scope than the expression "for the purposes of earning profits." It may take in not only the day to day running of a business but also many other acts incidental to the carrying on a business (b) CIT v. Edward Keventer (Private) Ltd. 197286 ITR 370 The legitimate needs of the business of the appellant are required to be considered objectively from the point of view of a businessman and not of the Revenue to determine 7 whether expenditure was wholly or exclusively laid out for the purpose of business and whether such expenditure was commercially expedient. The benefit derived by or accruing…

DCIT, Rewari vs. M/S Nippon Leakless Talbros Pvt. Ltd., Rewari

In the result, the Revenue’s appeal for assessment year

ITA 5584/DEL/2016[2012-13]Status: DisposedITAT Delhi22 Dec 2017AY 2012-13

Bench: Shri Amit Shukla & Shri O. P. Kant

For Appellant: Shri Ravi Kant Gupta, Sr. D.RFor Respondent: Shri V.K. Agarwal, AR
Section 143(3)Section 40A

…that the provision is meant to check evasion of tax through excessive or unreasonable payments relatives and associate concerns and should not be applied in a manner which will cause hardship in bona fide cases. 14. In CIT Vs. 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 expenditure incurred must I.T.As. No.2763, 2764 & 5584/DEL/2016 6 take into…

DCIT, Rewari vs. M/S. Nippon Leakless Talbros Pvt. Ltd., Rewari

In the result, the Revenue’s appeal for assessment year

ITA 2764/DEL/2016[2011-12]Status: DisposedITAT Delhi22 Dec 2017AY 2011-12

Bench: Shri Amit Shukla & Shri O. P. Kant

For Appellant: Shri Ravi Kant Gupta, Sr. D.RFor Respondent: Shri V.K. Agarwal, AR
Section 143(3)Section 40A

…that the provision is meant to check evasion of tax through excessive or unreasonable payments relatives and associate concerns and should not be applied in a manner which will cause hardship in bona fide cases. 14. In CIT Vs. 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 expenditure incurred must I.T.As. No.2763, 2764 & 5584/DEL/2016 6 take into…

DCIT, Rewari vs. M/S. Nippon Leakless Talbros Pvt. Ltd., Rewari

In the result, the Revenue’s appeal for assessment year

ITA 2763/DEL/2016[2008-09]Status: DisposedITAT Delhi22 Dec 2017AY 2008-09

Bench: Shri Amit Shukla & Shri O. P. Kant

For Appellant: Shri Ravi Kant Gupta, Sr. D.RFor Respondent: Shri V.K. Agarwal, AR
Section 143(3)Section 40A

…that the provision is meant to check evasion of tax through excessive or unreasonable payments relatives and associate concerns and should not be applied in a manner which will cause hardship in bona fide cases. 14. In CIT Vs. 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 expenditure incurred must I.T.As. No.2763, 2764 & 5584/DEL/2016 6 take into…

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)

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AY. 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) Assessee by : Sh. Ved Jain, Adv. & Ms. Rano Jain, Adv. Department by : Sh. N.K. Bansal, Sr. DR ORDER PER H.S. SIDHU, JM Assessee has filed the Appeal against the Order dated 23.2.2013 passed by the Ld. Commissioner of Income Tax (Appeals)—XI, New Delhi pertaining to assessment…

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)

…bas 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 by or accruing to the company, and that while doing so, the view point of the company or concern having regard to…

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)

…hat 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 expenditure incurred must take into consideration (i) the legitimate busines…

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)

…hat 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 expenditure incurred must take into consideration (i) the legitimate busines…

Ge Money Financial Services Pvt. Ltd., Delhi vs. DCIT, New Delhi

In the result ground, no

ITA 6282/DEL/2012[2008-09]Status: DisposedITAT Delhi02 May 2016AY 2008-09

Bench: Shri A.T.Varkey & Shri Prashant Maharishi

For Appellant: Sh. Sachit Jolly, AdvFor Respondent: Sh. Amendra Kumar, CIT DR
Section 143(3)Section 144Section 144CSection 144C(5)Section 32Section 36(1)(vii)Section 36(2)Section 92C

…substantial portion of share namely 65 per cent in the assessee company.” Page 60 of 79 G E Money Financial Services Pvt Limited A Y ITA No 5882/Del/2010 5816/Del/2011 & 6282/Del/2012 2006-07 2007-08 & 2008-09 “13. 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 expenditure incurred must take into consideration (i) the legitimate busines…

CIT v. Edward Keventer (P.) Ltd. (86 ITR 370) — Cited in 23 Judgments | BharatTax