CIT v. Madras Auto Service (P) Ltd.

233 ITR 468Supreme Court of India1998#353 most cited

What is CIT v. Madras Auto Service (P) Ltd. authority for?

Expenditure providing an enduring advantage, such as upfront lease rent for land, is revenue expenditure if no capital asset is acquired or generated, allowing for deduction under Section 37, even when capitalized in the books of account.

246

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2008 to 2026.

Also referred to as

CIT v. Madras Auto Service (P) Ltd. · 233 ITR 468 · Section 37(1) · revenue expenditure · capital expenditure · test of enduring benefit · upfront lease rent · no capital asset generated · business deduction · expenditure classification · depreciation for income tax

Sections most often in play

Section 143(3)Section 14ASection 254Section 37(1)Section 115JBSection 142(1)Section 37Section 10(15)
Read the full judgment

Issues it is cited on

test of enduring benefitsection 10(2)(xv)business transfer agreementnon-compete feeenduring benefitslump salededuction u/s 80iasection 40a(2)revenue expenditurecapital expenditurebook profitssection 80ia

Judgments citing CIT v. Madras Auto Service (P) Ltd.

Uhde India P.Ltd, Mumbai vs. Addl CIT 10(3), Mumbai

In the result, the appeal filed by the Revenue is dismissed

ITA 3775/MUM/2016[2008-09]Status: DisposedITAT Mumbai16 Mar 2021AY 2008-09

Bench: Shri Vikas Awasthy () & Shri N.K. Pradhan () Assessment Year: 2008-09

For Respondent: Mr. Neeraj Sheth, AR
Section 143(3)Section 145(2)

…has fallen for determination in various contexts, but in all decisions particularly of the Supreme Court what has been emphasized is that the matter has to be looked at from a commercial point of view. [Para 7] In CIT v. Madras Auto Service (P.) Ltd. [1998] 233 ITR 468/ 99 Taxman 575 (SC) the assessee had in fact incurred the entire cost of construction of a new building but obtained no title to the new construction. The benefit which the assessee obtained was a long lease of thirty nine years on low rent. The Supreme Court held that the asset which was created belonged to someone else. The assessee was held to…

Principal Commissioner of Income Tax - 5 vs. M/S Ncr Corporation (India) Pvt Ltd

Appeal is dismissed

ITA/254/2020HC Karnataka26 Feb 2021

Bench: SATISH CHANDRA SHARMA,V SRISHANANDA

Section 143(1)Section 143(2)Section 260ASection 32(1)Section 37

…y erred in treating the same to be a revenue expenditure and that the asset was capital in nature. In support of aforesaid submission, reliance has been placed on decision 6 of Supreme Court in 'CIT VS. MADRAS AUTO SERVICES (P) LTD.,', 233 ITR 468 and a decision of this court in 'D.P.CHIRANIA AND COMPANY VS. COMMISSIONER OF INCOME-TAX, MYSORE', 112 ITR 12. It is further submitted that ATMs are not Computers and the tribunal erred in holding that ATMs are computers and assessee is entitled to deduction to the extent of 60%. In support of aforesaid submission, reliance has been placed…

ACIT (Ltu), New Delhi vs. M/S Havells India Ltd., New Delhi

In the result, appeal of the assessee is partly allowed

ITA 466/DEL/2011[2007-08]Status: DisposedITAT Delhi25 Aug 2020AY 2007-08

Bench: Shri Amit Shukla & Shri Prashant Maharishihavells India Ltd, Vs. Dcit, 1/7 Ram Kishore Road, Circle-12(1), Civil Lines, New Delhi Cr Building Ip Estate, Pan: Aaach0351E New Delhi (Appellant) (Respondent) Havells India Ltd, Vs. Dcit, 1/7 Ram Kishore Road, Ltu, Nbcc Plaza, Civil Lines, New Delhi Pusp Vihar, Sector-4, Saket, Pan: Aaach0351E New Delhi (Appellant) (Respondent) Acit (Ltu), Vs. Havells India Ltd, Nbcc Plaza, Pusp Vihar, Sector- 1/7 Ram Kishore Road, 4, Saket, New Delhi Civil Lines, New Delhi Pan: Aaach0351E (Appellant) (Respondent)

For Appellant: Shri Rohit Jain, AdvFor Respondent: Shri Saras Kumar, Sr. DR
Section 143(3)Section 144ASection 14ASection 80H

…rable Supreme Court in CIT v. Associated Cement Companies Ltd.: [172 ITR 257], and again in the case of Alembic Chemical Works Co. Ltd. v. CIT: [177 ITR 377]. He also referred to several decisions to the same effect as i. CIT vs. Madras Auto Service (P) Ltd.: 233 ITR 468 (SC) ii. CIT vs. Associated Cement Companies Ltd: 172 ITR 257(SC) iii. Commissioner of Income Tax v. Hindustan Zinc Ltd. : 322 ITR 478 (Raj) iv. CIT v. Jai Parabolic Springs Ltd.: 306 ITR 42 (Delhi HC), v. CIT v. Salora International: 308 ITR 199/ 177 Taxman 456 (Del. HC) vi. CIT v. Pepsico India Holdings (P) Ltd.: ITA No.319,1185,1448,1822 & 209…

M/S Havells India Ltd., New Delhi vs. DCIT, New Delhi

In the result, appeal of the assessee is partly allowed

ITA 6073/DEL/2010[2007-08]Status: DisposedITAT Delhi25 Aug 2020AY 2007-08

Bench: Shri Amit Shukla & Shri Prashant Maharishihavells India Ltd, Vs. Dcit, 1/7 Ram Kishore Road, Circle-12(1), Civil Lines, New Delhi Cr Building Ip Estate, Pan: Aaach0351E New Delhi (Appellant) (Respondent) Havells India Ltd, Vs. Dcit, 1/7 Ram Kishore Road, Ltu, Nbcc Plaza, Civil Lines, New Delhi Pusp Vihar, Sector-4, Saket, Pan: Aaach0351E New Delhi (Appellant) (Respondent) Acit (Ltu), Vs. Havells India Ltd, Nbcc Plaza, Pusp Vihar, Sector- 1/7 Ram Kishore Road, 4, Saket, New Delhi Civil Lines, New Delhi Pan: Aaach0351E (Appellant) (Respondent)

For Appellant: Shri Rohit Jain, AdvFor Respondent: Shri Saras Kumar, Sr. DR
Section 143(3)Section 144ASection 14ASection 80H

…rable Supreme Court in CIT v. Associated Cement Companies Ltd.: [172 ITR 257], and again in the case of Alembic Chemical Works Co. Ltd. v. CIT: [177 ITR 377]. He also referred to several decisions to the same effect as i. CIT vs. Madras Auto Service (P) Ltd.: 233 ITR 468 (SC) ii. CIT vs. Associated Cement Companies Ltd: 172 ITR 257(SC) iii. Commissioner of Income Tax v. Hindustan Zinc Ltd. : 322 ITR 478 (Raj) iv. CIT v. Jai Parabolic Springs Ltd.: 306 ITR 42 (Delhi HC), v. CIT v. Salora International: 308 ITR 199/ 177 Taxman 456 (Del. HC) vi. CIT v. Pepsico India Holdings (P) Ltd.: ITA No.319,1185,1448,1822 & 209…

M/S Havells India Ltd., New Delhi vs. DCIT, New Delhi

In the result, appeal of the assessee is partly allowed

ITA 6072/DEL/2010[2004-05]Status: DisposedITAT Delhi25 Aug 2020AY 2004-05

Bench: Shri Amit Shukla & Shri Prashant Maharishihavells India Ltd, Vs. Dcit, 1/7 Ram Kishore Road, Circle-12(1), Civil Lines, New Delhi Cr Building Ip Estate, Pan: Aaach0351E New Delhi (Appellant) (Respondent) Havells India Ltd, Vs. Dcit, 1/7 Ram Kishore Road, Ltu, Nbcc Plaza, Civil Lines, New Delhi Pusp Vihar, Sector-4, Saket, Pan: Aaach0351E New Delhi (Appellant) (Respondent) Acit (Ltu), Vs. Havells India Ltd, Nbcc Plaza, Pusp Vihar, Sector- 1/7 Ram Kishore Road, 4, Saket, New Delhi Civil Lines, New Delhi Pan: Aaach0351E (Appellant) (Respondent)

For Appellant: Shri Rohit Jain, AdvFor Respondent: Shri Saras Kumar, Sr. DR
Section 143(3)Section 144ASection 14ASection 80H

…rable Supreme Court in CIT v. Associated Cement Companies Ltd.: [172 ITR 257], and again in the case of Alembic Chemical Works Co. Ltd. v. CIT: [177 ITR 377]. He also referred to several decisions to the same effect as i. CIT vs. Madras Auto Service (P) Ltd.: 233 ITR 468 (SC) ii. CIT vs. Associated Cement Companies Ltd: 172 ITR 257(SC) iii. Commissioner of Income Tax v. Hindustan Zinc Ltd. : 322 ITR 478 (Raj) iv. CIT v. Jai Parabolic Springs Ltd.: 306 ITR 42 (Delhi HC), v. CIT v. Salora International: 308 ITR 199/ 177 Taxman 456 (Del. HC) vi. CIT v. Pepsico India Holdings (P) Ltd.: ITA No.319,1185,1448,1822 & 209…

Goldmohur Design and Apparel Park Ltd., Mumbai vs. Pr. Comm. of Income Tax - 7, Mumbai

ITA 3971/MUM/2017[2012-13]Status: DisposedITAT Mumbai31 Jul 2020AY 2012-13

Bench: Shri S.Rifaur Rahman & Shri Ravish Soodgoldmohar Design & Pr. Cit-7 R. No. 628, 6Th Floor, Apparel Park Ltd. 145, Goldmohar Mill, Aayakar Bhavan, M.K. Road, Vs. Dada Saheb Phalke Road, Mumbai – 400 020 Dadar (E), Mumbai- 400 014 Pan – Aadcg1613M (Appellant) (Respondent)

For Appellant: Shri Vipul JoshiFor Respondent: Shri. T. Kipgen &
Section 143Section 143(2)Section 143(3)Section 263

…nditure under Sec. 37 of the Act relied on the following judicial pronouncements: (i) CIT Vs. Cinecita (P) Ltd.- [(1982) 137 ITR 652 (Bom)]. (ii) Richardson Hindustan ltd. Vs. CIT- [(1988) 169 ITR 516 (Bom)] (iii) CIT Vs. Madras Auto Services P. Ltd.- [(1998) 233 ITR 468 (SC) (iv) CIT Vs. H.M.T. LTd. – [(1993) 203 ITR 820 (Karn)] (v) DCIT Vs. Sun Pharmaceutical Ind. Ltd. – [(2010) 329 ITR 479 (Guj)] (vi) ACIT Vs. Delhi International Airport (P.) Ltd.- [(2018) 89 taxmann.com 326 (Del)] (vii) CIT Vs. Hari Vignesh Motors P. Ltd. [(2006) 282 ITR 338 (Madras)].‖ Alternatively, it was submitted by the ld. A.R that the…

Mahindra & Mahindra Ltd, Mumbai vs. ACIT Cir 2(2)2, Mumbai

In the result, all the appeals of the assessee are partly allowed for statistical purposes and appeal of the revenue is dismissed

ITA 1449/MUM/2016[2011-12]Status: DisposedITAT Mumbai19 Jun 2020AY 2011-12

Bench: Shri Mahavir Singh, Vp & Shri M.Balaganesh, Am & Sa No.462/Mum/2019 (Arising Out Of Ita No.1449/Mum/2016) (Assessment Year : 2011-12) Mahindra & Mahindra Vs. Dy. Commissioner Of Limited, Income-Tax Corporation Taxation, Circle-2(2)(2) P.K. Kurne Chowk, Aayakar Bhavan, Worli, Mumbai – 400020 M.K.Road, Mumbai-400020 Pan/Gir No.Aaacm3025E (Appellant) .. (Respondent) & Sa No.461/Mum/2019 (Arising Out Of Ita No.7382/Mum/2017) (Assessment Year : 2013-14) Mahindra & Mahindra Vs. Dy. Commissioner Of Limited, Income-Tax Corporation Taxation, Circle-2(2)(2) P.K. Kurne Chowk, Aayakar Bhavan, Worli, Mumbai – 400020 M.K.Road, Mumbai-400020 Pan/Gir No.Aaacm3025E (Appellant) .. (Respondent) Dy. Commissioner Of Vs. Mahindra & Mahindra Limited, Income-Tax Corporation Taxation, Circle-2(2)(2) P.K. Kurne Chowk, Aayakar Bhavan, Worli, Mumbai – 400020 M.K.Road, Mumbai- 400020 Pan/Gir No.Aaacm3025E (Appellant) .. (Respondent) Mahindra & Mahindra Vs. Asst. Commissioner Of Limited, Income-Tax Corporation Taxation, Circle-2(2)(2) P.K. Kurne Chowk, Aayakar Bhavan, Worli, Mumbai – 400020 M.K.Road, Mumbai-400020 Pan/Gir No.Aaacm3025E (Appellant) .. (Respondent)

Section 143(3)Section 144C(5)

…ut which was never set up. The disputed expenditure was towards travelling expenses which was held by the Department to be capital in nature (para 14). In Para 20 the High Court has referred to the order of the SC in the case of Madras Auto Services (P) Ltd. (233 ITR 468) in which certain expenditure was held to be revenue in nature because no capital asset was generated by spending the amount in question. Concluding the issue in para 23 and applying the ratio in the case of Madras Auto (supra), the High Court held that the subject expenditure could not be directly related with the acquisition of any capital asse…

Commissioner of Income Tax-III vs. M/S Ncr Corporation Pvt Ltd

In the result we do not find any merit in the appeal

ITA/242/2011HC Karnataka16 Jun 2020

Bench: ALOK ARADHE,M.NAGAPRASANNA

Section 143(1)Section 143(2)Section 260Section 260A

…the tribunal grossly erred in treating the same to be a revenue expenditure and that the asset was capital in nature. In support of aforesaid submission, reliance has been placed on decision of Supreme Court in ‘CIT VS. MADRAS AUTO SERVICES (P) LTD.,’, 233 ITR 468 and a decision of this court in ‘D.P.CHIRANIA AND COMPANY VS. COMMISSIONER OF INCOME-TAX, MYSORE’, 112 ITR 12. It is further submitted that ATMs are not Computers and the tribunal erred in holding that ATMs are computers and assessee is entitled to deduction to the extent of 60%. In support of aforesaid submission, reliance has been pla…

DCIT Central Circle-6(2), Mumbai vs. Indiawin Sports Pvt. Ltd., Mumbai

Appeal is Allowed

ITA 59/MUM/2019[2013-14]Status: DisposedITAT Mumbai06 Mar 2020AY 2013-14

Bench: Shri M. Balaganesh, Am & Shri Amarjit Singh, Jm

For Appellant: Shri Nimesh Vora (AR)For Respondent: Shri V. Sreekar (DR)
Section 143(1)Section 143(2)

…IN THE INCOME TAX APPELLATE TRIBUNAL“C” BENCH, MUMBAI BEFORE SHRI M. BALAGANESH, AM AND SHRI AMARJIT SINGH, JM I.T.A. Nos. 59 & 60/Mum/2019 (Assessment Years: 2013-14 & 2014-15) Dy. Commissioner of Income Vs. M/s. Indiawin Sports Pvt. Tax, Central Circle-6(2) Ltd. Room No.1903, 19th Floor 3rd Floor, Court House, Air India Building, Nariman Lokmanya Tilak Marg, Point, Mumbai-400021. Dhobi Talao, Mumbai- 400002. I.T.A. Nos.230 & 231/Mum/2019 (Assessment Years: 2013-14 & 2014-15) M/s. Indiawin Sports Pvt. Vs. Dy. Commissioner of Ltd. Income Tax, Central Circle- 3rd Floor, Court House, 6(2) Lokmanya Tilak Marg, Dhobi…

M/S Snc Power Corporation Private Limited, Bangalore vs. DCIT, Bangalore

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

ITA 65/BANG/2013[2007-08]Status: DisposedITAT Bangalore20 Feb 2020AY 2007-08

Bench: Shri Arun Kumar Garodia, Am Assessment Year : 2007 – 08 M/S Snc Power Corporation Pvt. Ltd., Snc House, 4Th Floor, No. 7, Residency Road, Dcit Circle – 12 (3), Vs. (Old No. 9, Raja Ram Mohanroy Road) Bangalore Bangalore - 560025 Pan: Aajcs7901C Appellant Respondent Assessee By : Shri V. Chandrasekar, Advocate Revenue By : Shri S. Tamil Selvam, Jcit Dr Date Of Hearing : 14.01.2020 Date Of Pronouncement : 20.02.2020 O R D E R Per Shri A.K. Garodia, Am: This Appeal Is Filed By The Assessee & The Same Is Directed Against The Order Of Learned Cit (A) – Iii Bangalore Dated 31.10.2012 For A. Y. 2007 – 08. 2. In Course Of Hearing, Learned Ar Of The Assessee Submitted That Synopsys Is Already Filed & This Appeal May Be Decided By Considering The Same. Learned Dr Of The Revenue Supported The Order Of Cit (A). 3. We Have Considered The Rival Submissions. We Find That Ground No. 1 & 2 Raised By The Assessee Are General & No Separate Adjudication Is Called For About These Two Grounds. As Per Ground No. 3, The Grievance Of The Assessee Is About Confirming Of The Disallowance Of Rs. 775,310/- Made By The Ao. In This Regard, In Para (C) Of The Synopsys, It Is Submitted That The Assessee Has Incurred An Expense Of Rs. 77,53,110/- As Wages In Respect Of A Turnover Of More Than Rs. 15 Crores & The Ao Made An Adhoc Disallowance Of Rs. 15 Lacs & Learned Cit (A) Confirmed Part

For Appellant: Shri V. Chandrasekar, AdvocateFor Respondent: Shri S. Tamil Selvam, JCIT DR

…t of Rs. 138,17,096/- spent on the building portion used for business should be allowed as revenue expenditure but the same was disallowed. Reliance is placed on the judgment of Hon’ble Apex Court rendered in the case of CIT vs. Madras Auto Services (P) Ltd., 233 ITR 468 and of Hon’ble Madras High Court rendered in the case of CIT vs. TVS Lean Logistics Private Limited, 293 ITR 432. As per the judgment of Hon’ble Apex Court rendered in the case of CIT vs. Madras Auto Services (P) Ltd.(Supra), the assessee spent the amounts in question in order to construct a new building after demolishing the old building but in…

DCIT CC 6(2), Mumbai vs. Indiawin Sports P. Ltd, Mumbai

In the result, both appeal of the assessee as well as the revenue are dismissed

ITA 4678/MUM/2018[2015-16]Status: DisposedITAT Mumbai19 Feb 2020AY 2015-16

Bench: Shri C.N. Prasad, Hon'Ble & Shri G. Manjunatha, Hon'Blem/S. Indiawin Sports Private Limited V. Dy. Commissioner Of Income-Tax Court House, 3Rd Floor Central Circle – 6(2) Lokmanya Tilak Marg, Dhobi Talao Room No. 1903, Air India Building Mumbai – 400 002 Nariman Point, Mumbai – 400 021 Pan: Aadcr8195F (Appellant) (Respondent) Dy. Commissioner Of Income-Tax V. M/S. Indiawin Sports Private Limited Court House, 3Rd Floor Central Circle – 6(2) Lokmanya Tilak Marg, Dhobi Talao Room No. 1903, Air India Building Mumbai – 400 002 Nariman Point, Mumbai – 400 021 Pan: Aadcr8195F (Appellant) (Respondent)

For Appellant: Shri Rajesh LakharaFor Respondent: Shri Awungshi Gimson

…revenue expenditure. Whatever may be the period of lease, the annual payment will be only revenue in nature. In fact the Madras High Court in the case of CIT v: Gemini Am (P) Ltd, 254 ITR 201, following the Apex Court in CJT v. Madras Auto Services Pvt. Ltd, 233 ITR 468 (sq, has held that upfront payment of future rent for 41 years would still be revenue expenditure. In the case of lease of immovable property, the Supreme Court has held that any premium paid for acquisition of the right to lease would constitute capital payment bin no! a periodic payment for the actual use of the property 8 ITA No. 4614 & 4678/…

Indiawin Sports P. Ltd, Mumbai vs. DCIT CC 6(2), Mumbai

In the result, both appeal of the assessee as well as the revenue are dismissed

ITA 4614/MUM/2018[2015-16]Status: DisposedITAT Mumbai19 Feb 2020AY 2015-16

Bench: Shri C.N. Prasad, Hon'Ble & Shri G. Manjunatha, Hon'Blem/S. Indiawin Sports Private Limited V. Dy. Commissioner Of Income-Tax Court House, 3Rd Floor Central Circle – 6(2) Lokmanya Tilak Marg, Dhobi Talao Room No. 1903, Air India Building Mumbai – 400 002 Nariman Point, Mumbai – 400 021 Pan: Aadcr8195F (Appellant) (Respondent) Dy. Commissioner Of Income-Tax V. M/S. Indiawin Sports Private Limited Court House, 3Rd Floor Central Circle – 6(2) Lokmanya Tilak Marg, Dhobi Talao Room No. 1903, Air India Building Mumbai – 400 002 Nariman Point, Mumbai – 400 021 Pan: Aadcr8195F (Appellant) (Respondent)

For Appellant: Shri Rajesh LakharaFor Respondent: Shri Awungshi Gimson

…revenue expenditure. Whatever may be the period of lease, the annual payment will be only revenue in nature. In fact the Madras High Court in the case of CIT v: Gemini Am (P) Ltd, 254 ITR 201, following the Apex Court in CJT v. Madras Auto Services Pvt. Ltd, 233 ITR 468 (sq, has held that upfront payment of future rent for 41 years would still be revenue expenditure. In the case of lease of immovable property, the Supreme Court has held that any premium paid for acquisition of the right to lease would constitute capital payment bin no! a periodic payment for the actual use of the property 8 ITA No. 4614 & 4678/…

Niit Technologies Ltd., New Delhi vs. ACIT, New Delhi

In the result, both the appeals of the assessee are partly allowed and the appeal of Revenue for assessment year 2007-08

ITA 5525/DEL/2013[2008-09]Status: DisposedITAT Delhi28 Jan 2020AY 2008-09

Bench: Shri Bhavnesh Saini & Shri O.P. Kant

For Appellant: 1. That the Commissioner of Income-Tax (Appeals) erred on facts and in law in up
Section 14ASection 35D

…r considering the decisions on the issue of when a particular expenditure has to be considered as capital expenditure, in the case of Empire Jute Co. Vs CIT 124 ITR 1 (SC); Lakshmiji Sugar Mills Co P Ltd Vs CIT 82 ITR 376 (SC) and Madras Auto Services (P) Ltd 233 ITR 468 (SC) allowed the claim of the assessee observing as under: “8.5.2 The appellant submitted that it had claimed deduction of Rs.77,98,042 on account of payment of commuted lease rentals to Greater Noida Authority for Plot No. 2A taken on lease situated in Greater Noida Industrial Development Area District, Gautam Budh Nagar. The appellant had the o…

Niit Technologies Ltd., New Delhi vs. ACIT, New Delhi

In the result, both the appeals of the assessee are partly allowed and the appeal of Revenue for assessment year 2007-08

ITA 5524/DEL/2013[2007-08]Status: DisposedITAT Delhi28 Jan 2020AY 2007-08

Bench: Shri Bhavnesh Saini & Shri O.P. Kant

For Appellant: 1. That the Commissioner of Income-Tax (Appeals) erred on facts and in law in up
Section 14ASection 35D

…r considering the decisions on the issue of when a particular expenditure has to be considered as capital expenditure, in the case of Empire Jute Co. Vs CIT 124 ITR 1 (SC); Lakshmiji Sugar Mills Co P Ltd Vs CIT 82 ITR 376 (SC) and Madras Auto Services (P) Ltd 233 ITR 468 (SC) allowed the claim of the assessee observing as under: “8.5.2 The appellant submitted that it had claimed deduction of Rs.77,98,042 on account of payment of commuted lease rentals to Greater Noida Authority for Plot No. 2A taken on lease situated in Greater Noida Industrial Development Area District, Gautam Budh Nagar. The appellant had the o…

ACIT, New Delhi vs. M/S Niit Technologies Ltd., New Delhi

In the result, both the appeals of the assessee are partly allowed and the appeal of Revenue for assessment year 2007-08

ITA 5492/DEL/2013[2008-09]Status: DisposedITAT Delhi28 Jan 2020AY 2008-09

Bench: Shri Bhavnesh Saini & Shri O.P. Kant

For Appellant: 1. That the Commissioner of Income-Tax (Appeals) erred on facts and in law in up
Section 14ASection 35D

…r considering the decisions on the issue of when a particular expenditure has to be considered as capital expenditure, in the case of Empire Jute Co. Vs CIT 124 ITR 1 (SC); Lakshmiji Sugar Mills Co P Ltd Vs CIT 82 ITR 376 (SC) and Madras Auto Services (P) Ltd 233 ITR 468 (SC) allowed the claim of the assessee observing as under: “8.5.2 The appellant submitted that it had claimed deduction of Rs.77,98,042 on account of payment of commuted lease rentals to Greater Noida Authority for Plot No. 2A taken on lease situated in Greater Noida Industrial Development Area District, Gautam Budh Nagar. The appellant had the o…

ACIT, New Delhi vs. M/S Niit Technologies Ltd., New Delhi

In the result, both the appeals of the assessee are partly allowed and the appeal of Revenue for assessment year 2007-08

ITA 5491/DEL/2013[2007-08]Status: DisposedITAT Delhi28 Jan 2020AY 2007-08

Bench: Shri Bhavnesh Saini & Shri O.P. Kant

For Appellant: 1. That the Commissioner of Income-Tax (Appeals) erred on facts and in law in up
Section 14ASection 35D

…r considering the decisions on the issue of when a particular expenditure has to be considered as capital expenditure, in the case of Empire Jute Co. Vs CIT 124 ITR 1 (SC); Lakshmiji Sugar Mills Co P Ltd Vs CIT 82 ITR 376 (SC) and Madras Auto Services (P) Ltd 233 ITR 468 (SC) allowed the claim of the assessee observing as under: “8.5.2 The appellant submitted that it had claimed deduction of Rs.77,98,042 on account of payment of commuted lease rentals to Greater Noida Authority for Plot No. 2A taken on lease situated in Greater Noida Industrial Development Area District, Gautam Budh Nagar. The appellant had the o…

Prosales Financial Services Pvt. Ltd., Mumbai vs. ITO 10 (1)(3), Mumbai

In the result, the appeal filed by the assessee is hereby ordered to be allowed

ITA 6614/MUM/2018[2009-10]Status: DisposedITAT Mumbai22 Jan 2020AY 2009-10

Bench: Shri Shamim Yahya, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.6614/Mum/2018 (निर्धारण वर्ा / Assessment Year: 2009-10) Prosales Financial Services बिधम/ Ito 10(1)(3) Pvt. Ltd. Aayakar Bhavan, M.K. Vs. 158, Dani Corporate Park, 1St Road, Mumbai-400020. Floor, Cst Road, Kalina, Santacruze (E), Mumbai. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaecp2576K (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Assessee By: Shri Rashmikant C. Modi & Ms. Ketki Rajeshirke Revenue By: Shri Somnath M. Wajale (Dr) सुनवाई की तारीख / Date Of Hearing: 08/01/2020 घोषणा की तारीख /Date Of Pronouncement: 22/01/2020 आदेश / O R D E R Per Amarjit Singh, Jm: The Assessee Has Filed The Present Appeal Against The Order Dated 24.08.2018 Passed By The Commissioner Of Income Tax (Appeals) - 22, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y.2009- 10. 2. The Assessee Has Raised The Following Grounds: -

For Appellant: Shri Rashmikant C. Modi & MsFor Respondent: Shri Somnath M. Wajale (DR)
Section 143(1)Section 143(3)Section 148

…ncurred on improvements of leasehold premises and treated the same as revenue expenditure. The assessee capitalized the expenses and amortized the same in 5 years by relying upon the Supreme Court decision in the case of CIT Vs. Madras Auto Services (P.) Ltd. 233 ITR 468. Feeling aggrieved, the ITA. NO.6614/M/2018 A.Y. 2009-10 assessee filed an appeal before the CIT(A) who confirmed the order of the AO, therefore, the assessee has filed the present appeal before us. ISSUE NO.1 4. Under this issue the assessee has challenged the reopening of the assessment proceeding u/s 148 of the Act. In the instant case, the…

Lipi Specific Family Trust, Ahmedabad vs. The DCIT, Circle-3(2), Ahmedabad

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

ITA 688/AHD/2019[2014-15]Status: DisposedITAT Ahmedabad20 Jan 2020AY 2014-15

Bench: Shri Rajpal Yadav & Shri Waseem Ahmed

For Appellant: Shri S.N. Soparkar, Sr.Adv. with Shri Himanshu Shah, ARFor Respondent: Shri Vidhyut Trivedi, Sr.DR
Section 234B

…. in this regard we further place our reliance on the judgment of Hon’ble apex Court in the case B and A Plantations & Industries Ltd v/s CIT reported in 117 Taxman 323 wherein it was held as under: “In the case of CIT v. Madras Auto Service (P.) Ltd. [1998] 233 ITR 468/ 99 Taxman 575, the Apex Court held that the general principles applicable in determining whether a particular expenditure is capital or revenue expenditure are as follows : (1) outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment; (2) expenditu…

M/S. Multitude Infrastructures Pvt. Ltd., New Delhi vs. DCIT, New Delhi

The Appeal of the assessee is allowed

ITA 2722/DEL/2017[2012-13]Status: DisposedITAT Delhi13 Dec 2019AY 2012-13

Bench: Sh. G. S. Pannu & Ms Suchitra Kamblei.T.A. No. 2722/Del/2017 (A.Y 2012-13) M/S. Multitude Infrastructure Vs Deputy Commissioner Of Pvt. Ltd., 1St Floor, Ece House, Income Tax, 28, Kasturba Gandhi Marg, Circle – 17(1) New Delhi – 110 001. New Delhi (Pan : Aafcm 5511 L) (Appellant) (Respondent) Appellant By Sh. Vivek Bansal, Advocate Respondent By Ms. Rakhi Vimal, Sr. D.R. Date Of Hearing 11.12.2019 Date Of Pronouncement 13.12.2019

Section 143(1)Section 143(2)Section 143(3)Section 14ASection 250

…rent. Thus, the expenditure incurred was for the business purpose only and therefore, it cannot be held as capital in nature. The Ld. AR relied upon the decision of the Hon’ble Apex Court in case of Commissioner of Income-tax vs. Madras Auto Service (P.) Ltd. 233 ITR 468, wherein it is held that 5 expenditure which bring about some kind of an enduring benefit to the company as a revenue expenditure when the expenditure did not bring into existence any capital asset for the company are expenditure of the said company. The asset which was created belonged to somebody else and the company derived an enduring busines…

ACIT, Circle - 5(2), Kolkata vs. M/S. Balmer Lawrie & Co. Ltd., Kolkata

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

ITA 98/KOL/2018[2012-13]Status: DisposedITAT Kolkata31 Oct 2019AY 2012-13

Bench: Shri A. T. Varkey, Jm & Dr. A.L. Saini, Am]

…quire any asset but only facilitated carrying on the business more profitably by paying token rent. In arriving at such conclusion the Hon’ble Gujarat High Court had relied on the judgment of the Hon’ble Supreme Court in the case of CIT VsMadras Auto Service (233 ITR 468). We note that although the judgment of the Hon’ble Gujarat High Court was rendered on 23.03.2009, the coordinate bench of this Tribunal while deciding the Revenue’s appeal in the assessee’s case for AY 2008-09 had not taken note of the same and went on to hold the expenditure claimed to be capital in nature. We however find that in the decision…