CIT v. Mysore Sugar Co. Ltd.

46 ITR 649Supreme Court of India1962#875 most cited

What is CIT v. Mysore Sugar Co. Ltd. authority for?

When advances extended in the normal course of business operations become irrecoverable and are written off, these amounts are allowable as a business loss or revenue expenditure.

120

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2011 to 2025.

Also referred to as

Mysore Sugar Co. Ltd. · 46 ITR 649 · Section 37(1) · Section 36(1)(vii) · business loss · advances written off · irrecoverable advances · revenue expenditure · allowable deduction · business expenditure

Sections most often in play

Section 37(1)Section 32Section 147Section 148Section 36(1)(vii)Section 36(2)Section 115JBSection 143(3)
Read the full judgment

Issues it is cited on

section 90aconstruction peunexplained jewellerysection 24(b)under-reporting of incomeproject completion methodsection 80cforeign tax creditroyalty incomewithholding taxdisallowance of interest expendituresection 139(4)

Judgments citing CIT v. Mysore Sugar Co. Ltd.

Delite Propeties Pvt. Ltd., Kolkata vs. DCIT, Circle -7, Kolkata

In the result, appeal of Revenue stands dismissed and that of assessee is 12

ITA 830/KOL/2012[2005-06]Status: DisposedITAT Kolkata21 Sept 2016AY 2005-06

Bench: Shri Waseem Ahmed & Shri S.S.Viswanethra Ravi

Section 143(2)Section 143(3)

…IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH “A” KOLKATA Before Shri Waseem Ahmed, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member ITA No.830 & 923/Kol/2012 Assessment Years:2005-06 Delite Properties Pvt. Ltd. बनाम DCIT, Circle-7, Circular Court, 9th Floor, Kolkata, P-7, / V/s. Chowringhee Square, 5th 8, AJC Bose Road, Kolkata-700 017 Floor, Room No. 15, [PAN No.AABCD 0241 J] Kolkata-69 DCIT, Circle-7, P-7, M/s Delite properties बनाम Chowringhee Square, 5th Pvt. Ltd., Circular / V/s. Court, 9th Floor, 8 AJC Floor, Room No.15, Kolkata-700 069 Bose Road, Kol-17 .. अपीलाथ" /Appellant ""यथ" /…

ACIT, New Delhi vs. M/S. Timex Group India Ltd., New Delhi

ITA 259/DEL/2013[2006-07]Status: DisposedITAT Delhi21 Jun 2016AY 2006-07

Bench: Sh. N. K. Saini, Am & Ms. Suchitra Kamble, Jm Ita No. 2769/Del/2012 : Asstt. Year : 2004-05 Asstt. Commissioner Of Income Tax Vs M/S Timex Watches Ltd., Circle-16(1), 117, Ground Floor, World Trade New Delhi Centre, Babar Road, New Delhi-110001 (Appellant) (Respondent) Co No. 323/Del/2012 : Asstt. Year : 2004-05 M/S Timex Watches Ltd., Vs Asstt. Commissioner Of Income 117, Ground Floor, World Trade Tax, Circle-16(1), Centre, Babar Road, New Delhi New Delhi-110001 (Appellant) (Respondent) Pan No. Aaact0773C

For Appellant: Sh. K.M. Gupta, Adv. & Sh. Gautam Jain, CAFor Respondent: Sh. Hemant Gupta, Sr. DR

…the bank account in the course of business of the assessee and once such was the position then such sum was eligible for deduction. The reliance was placed on the following case laws: " Mohan Meakin Ltd. Vs CIT 59 DTR 401 (Del) " CIT Vs Mysore Sugar Co. Ltd. 46 ITR 649 (SC) 17. It was stated before the ld. CIT(A) that the amount had been fraudulently withdrawn by anonymous person, the assessee thought prudent to write off the loss though suit had been filed for recovery of the same and that the loss was suffered by the assessee of Rs.8,25,000/- in regular course of business be allowed as a deduction u/s 37(1) of…

ACIT, New Delhi vs. M/S. Timex Group India Ltd., New Delhi

ITA 258/DEL/2013[2005-06]Status: DisposedITAT Delhi21 Jun 2016AY 2005-06

Bench: Sh. N. K. Saini, Am & Ms. Suchitra Kamble, Jm Ita No. 2769/Del/2012 : Asstt. Year : 2004-05 Asstt. Commissioner Of Income Tax Vs M/S Timex Watches Ltd., Circle-16(1), 117, Ground Floor, World Trade New Delhi Centre, Babar Road, New Delhi-110001 (Appellant) (Respondent) Co No. 323/Del/2012 : Asstt. Year : 2004-05 M/S Timex Watches Ltd., Vs Asstt. Commissioner Of Income 117, Ground Floor, World Trade Tax, Circle-16(1), Centre, Babar Road, New Delhi New Delhi-110001 (Appellant) (Respondent) Pan No. Aaact0773C

For Appellant: Sh. K.M. Gupta, Adv. & Sh. Gautam Jain, CAFor Respondent: Sh. Hemant Gupta, Sr. DR

…the bank account in the course of business of the assessee and once such was the position then such sum was eligible for deduction. The reliance was placed on the following case laws: " Mohan Meakin Ltd. Vs CIT 59 DTR 401 (Del) " CIT Vs Mysore Sugar Co. Ltd. 46 ITR 649 (SC) 17. It was stated before the ld. CIT(A) that the amount had been fraudulently withdrawn by anonymous person, the assessee thought prudent to write off the loss though suit had been filed for recovery of the same and that the loss was suffered by the assessee of Rs.8,25,000/- in regular course of business be allowed as a deduction u/s 37(1) of…

ACIT, New Delhi vs. M/S. Timex Watches Ltd., New Delhi

ITA 2769/DEL/2012[2004-05]Status: DisposedITAT Delhi21 Jun 2016AY 2004-05

Bench: Sh. N. K. Saini, Am & Ms. Suchitra Kamble, Jm Ita No. 2769/Del/2012 : Asstt. Year : 2004-05 Asstt. Commissioner Of Income Tax Vs M/S Timex Watches Ltd., Circle-16(1), 117, Ground Floor, World Trade New Delhi Centre, Babar Road, New Delhi-110001 (Appellant) (Respondent) Co No. 323/Del/2012 : Asstt. Year : 2004-05 M/S Timex Watches Ltd., Vs Asstt. Commissioner Of Income 117, Ground Floor, World Trade Tax, Circle-16(1), Centre, Babar Road, New Delhi New Delhi-110001 (Appellant) (Respondent) Pan No. Aaact0773C

For Appellant: Sh. K.M. Gupta, Adv. & Sh. Gautam Jain, CAFor Respondent: Sh. Hemant Gupta, Sr. DR

…the bank account in the course of business of the assessee and once such was the position then such sum was eligible for deduction. The reliance was placed on the following case laws: " Mohan Meakin Ltd. Vs CIT 59 DTR 401 (Del) " CIT Vs Mysore Sugar Co. Ltd. 46 ITR 649 (SC) 17. It was stated before the ld. CIT(A) that the amount had been fraudulently withdrawn by anonymous person, the assessee thought prudent to write off the loss though suit had been filed for recovery of the same and that the loss was suffered by the assessee of Rs.8,25,000/- in regular course of business be allowed as a deduction u/s 37(1) of…

Bayer Bioscience Private Limited, Mumbai vs. DCIT, New Delhi

In the result, both the cross appeals filed by the Revenue and the assessee are partly allowed

ITA 2685/DEL/2009[2004-05]Status: DisposedITAT Delhi21 Apr 2016AY 2004-05

Bench: : Shri A.T. Varkey & Shri L.P. Sahuasstt. Year : 2004-05 D.C.I.T. 14(1), Vs. Bayer Bioscience P. Ltd., Mumbai. (Formerly M/S. Proagro Seed Co. P. Ltd. ), Bayer House, Hiranandani Garden, Powai, Mumbai.[Pan: Aaacp 3459M]

For Respondent: Smt. Anima Barnwal, DR

…e following judicial precedents to support that advances which have become irrecoverable, given in the course of carrying on business are an allowable deduction as a business loss while computing the profits of the business: (i). CIT vs. Mysore Sugar Co. Ltd (46 ITR 649)(SC) (ii). ACIT vs.Shantilal Balabhai (74 TTJ 506)(ITAT Ahd.) (iii). Gujrat Fluoro Chemicals Ltd. vs. JCIT (76 TTJ 313)(ITAT Ahd.) (iv). CIT vs. Deccan Sugars & Abkhari & Co. Ltd. (157 ITR 467 (Mad.) (v). CIT vs. Baldeoram Heharilal (99 ITR 108 (Cal.). 19. The learned DR, on the other hand, relied on the orders of the authorities below. 20. Afte…

M/S. B O C India Ltd., Kolkata vs. A.C.I.T., Cir-12, Kolkata

In the result, assessee’s appeal is partly allowed for statistical purpose

ITA 669/KOL/2008[2003-04]Status: DisposedITAT Kolkata19 Apr 2016AY 2003-04

Bench: Shri Mahavir Singh & Shri Waseem Ahmed

Section 143(3)Section 28

…xpenditures before qualifying for deduction are required to be laid out or expended wholly and exclusively for the purpose of the business and profession. Therefore we disagree with the view taken by the AO. Relying in the case of Mysore Sugar Company Limited 46 ITR 649 (SC), the Hon’ble Supreme Court held as under:- “To find out whether expenditure is on the capital account or on revenue, one must consider the expenditure in relation to the business. Since all payments reduce capital in the ultimate analysis one is apt to consider a loss as amounting to a loss of capital. But this is not true of all losses, beca…

D.C.I.T., Cir-12, Kolkata vs. M/S. B O C India Ltd

In the result, assessee’s appeal is partly allowed for statistical purpose

ITA 1071/KOL/2008[2003-04]Status: DisposedITAT Kolkata19 Apr 2016AY 2003-04

Bench: Shri Mahavir Singh & Shri Waseem Ahmed

Section 143(3)Section 28

…xpenditures before qualifying for deduction are required to be laid out or expended wholly and exclusively for the purpose of the business and profession. Therefore we disagree with the view taken by the AO. Relying in the case of Mysore Sugar Company Limited 46 ITR 649 (SC), the Hon’ble Supreme Court held as under:- “To find out whether expenditure is on the capital account or on revenue, one must consider the expenditure in relation to the business. Since all payments reduce capital in the ultimate analysis one is apt to consider a loss as amounting to a loss of capital. But this is not true of all losses, beca…

DCIT, Chennai vs. Dymos Lear Automotive India Pvt Ltd., Kancheepuram

In the result, the appeal of the Revenue is partly allowed for 8

ITA 1931/CHNY/2015[2008-09]Status: DisposedITAT Chennai03 Feb 2016AY 2008-09

Bench: Shri Chandra Poojari & Shri G. Pavan Kumar

For Appellant: Shri. B. Lakshminarayanan, IRS, JCITFor Respondent: Shri. Rahunathan Sampath, Advocate
Section 143(1)Section 143(2)Section 143(3)Section 37(1)

…allowing advances written off to the tune of ₹39,37,127/- towards Advances paid to custom House Agent towards Freight for A.Y.2008-09. 2.2 The learned CIT(A) erred in relying on the decision of the Apex Court in the case of CIT vs. Mysore Sugar Co. Ltd (1962) 46 ITR 649 (SC) and held that advances which are written off in the books can be claimed as revenue expenses u/s.37(1) of the Act. 2.3 The learned CIT(A) ought to have appreciated the fact that in the relied on decision, the Apex Court has held that the expenditure was not in the nature of capital expenditure, was deductible as revenue expenditure. 2.4. The…

DCIT, Circle-6, Kolkata vs. West Bengal Industrial Development Corporation Ltd., Kolkata

In the result, the appeals being ITA Nos

ITA 1376/KOL/2009[2002-03]Status: DisposedITAT Kolkata16 Dec 2015AY 2002-03

Bench: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi

Section 143(3)Section 254

…investment or advances. Thus, loss incurred in the process could be said to arise out of and as an incident of the business of the appellant. Reference may also be made to a decision of the Hon'ble Supreme Court in the case of CIT-v- Msore Sugar Company Ltd. 46 ITR 649 where advance made by the company was allowed as business loss on the same becoming irrecoverable. It may be stated that assessee is an industrial development corporation whose business consists of inter alia, investment in shares, debentures, etc therefore, such write off should be regarded as a trading loss as the same is closely linked up with…

Avery India Ltd., Haryana vs. D.C.I.T, Cir- 1, Kolkata

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

ITA 601/KOL/2013[2006-07]Status: DisposedITAT Kolkata27 Nov 2015AY 2006-07

Bench: : Shri Mahavir Singh & Shri Balaganesh

For Appellant: Shri Saurabh Kedia, ld.A/RFor Respondent: Shri D. Naskar, JCIT, ld.DR
Section 143(3)Section 28Section 37(1)

…s of the Act was deemed to be and became the liability of the assessee. Loss was allowable if it “sprang directly from and was incidental to”the business of the assessee.” C. Hon’ble Supreme Court in the case of CIT vs Mysore Sugar Co. Ltd reported in (1962) 46 ITR 649 (SC) . The facts before the Hon’ble Apex Court and decision rendered thereon is given below:- “Facts: “The assessee was a sugar company. The assessee purchased sugarcane from the sugarcane growers and crushed them in its factory to prepare sugar. As a part of its business operations. It entered into agreements with the sugarcane growers, and adva…

Summit Investments Ltd., Kolkata vs. JCIT, Spl. RG-16, Kolkata

In the result, the appeal of the assessee is allowed

ITA 338/KOL/1999[1995-1996]Status: DisposedITAT Kolkata28 Oct 2015AY 1995-1996

Bench: : Shri S.S. Viswanethra Ravi

For Appellant: Shri J.P Khaitan, Sr. Advocate, ld.ARFor Respondent: Shri Sanjay Mukherjee,JCIT, ld.DR
Section 10(1)Section 143(3)Section 36Section 36(1)(vii)Section 36(2)

…bility would automatically fall under the category of trade debt / receivable and hence is allowable as business loss. Reliance in this regard is placed on the decision of the Hon’ble Supreme Court in the case of CIT vs Mysore Sugar Co. Ltd reported in (1962) 46 ITR 649 (SC) . The facts before the Hon’ble Apex Court and decision rendered thereon is given below:-“ Facts: The assessee who carried on the manufacture of sugar used to advance seedlings, fertilisers and money to sugarcane growers under an agreement by which the growers agreed to sell the next crop of the sugarcane grown by them exclusively to the asse…

Rajiv Sharad Pradhan, Mumbai vs. ACIT 18(3), Mumbai

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

ITA 2614/MUM/2014[2009-10]Status: DisposedITAT Mumbai21 Oct 2015AY 2009-10

Bench: Shri N.K. Billaiya & Shri Amarjit Singhआयकर अपील सं/ I.T.A. No.2614/Mum/2014 ("नधा"रण वष" / Assessment Year:2009-10 बनाम/ Shri Rajeev Sharad The Acit-18(3), Pradhan (Prop. M/S. Piramal Chambers, Parel, Vs. Pantoscope), Mumbai-400 016 229, Om Gita Niwas, L.J. Road, Mahim, Mumbai-400 016 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aajpp 9049H (अपीलाथ" /Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से/ Appellant By: Shri Ruturaj H. Gurjar Shri S.K. Mutsaddi ""यथ" क" ओर से/Respondent By: Shri Vivek Anand सुनवाई क" तार"ख / Date Of Hearing : 12 .10.2015 घोषणा क" तार"ख /Date Of Pronouncement : 21.10.2015 आदेश / O R D E R Per N.K. Billaiya, Am: This Appeal By The Assessee Is Preferred Against The Order Of The Ld. Cit(A)-29,Mumbai Dated 18.02.2014 Pertaining To Assessment Year 2009-10. 2. The Grievance Of The Assessee Reads As Under:

For Appellant: Shri Ruturaj H. GurjarFor Respondent: Shri Vivek Anand

…with Mayekar’s & Arolkars who have forfeited the said deposit. There is also a write off for a deposit with Mohamad Khan. To substantiate its claim, reliance was placed on the decision of the Hon’ble Supreme Court in the case of CIT Vs Mysore Sugar Coi. Ltd. 46 ITR 649 and I.B.M. World Trade Corpn. Vs CIT 186 ITR 412. The claim of the assessee was denied by the AO who made an addition of Rs. 3,64,442/- in respect of the write off in the case of Shri Mohamad Khan. 4. Aggrieved by this, the assessee carried the matter before the Ld. CIT(A) but without any success. The Ld. CIT(A) confirmed the disallowance made by…

ACIT 8(3), Mumbai vs. Radhakrishan Consumer Services P. Ltd, Thane

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

ITA 6862/MUM/2012[2009-10]Status: DisposedITAT Mumbai21 Oct 2015AY 2009-10

Bench: Shri N.K. Billaiya & Shri Amarjit Singhआयकर अपील सं/ I.T.A. No.6862/Mum/2012 ("नधा"रण वष" / Assessment Year:2009-10 बनाम/ The Acit-8(3), M/S. Radhakrishna Consumer Aayakar Bhavan, Services Pvt.Ltd., Vs. Mumbai-400 020 Radhakrishna House, Majiwade Village Road, Majiwade, Thane-400 601 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. :Aaact 5839G (अपीलाथ" /Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से/ Appellant By: Shri Anilkumar Dhondial ""यथ" क" ओर से/Respondent By: Shri J.D. Mistry सुनवाई क" तार"ख / Date Of Hearing :12.10.2015 घोषणा क" तार"ख /Date Of Pronouncement :21.10.2015 आदेश / O R D E R Per N.K. Billaiya, Am: This Appeal By The Revenue Is Directed Against The Order Of The Ld. Cit(A)-18, Mumbai Dated 31.08.2012 Pertaining To Assessment Year 2009-10. 2. The Sole Grievance Of The Revenue Is That The Ld. Cit(A) Erred In Deleting The Disallowance Of Rs. 93,62,085/- Being Deposits Written Off.

For Appellant: Shri AnilkumarFor Respondent: Shri J.D. Mistry

…ount as a business loss which was disallowed by the AO and the said disallowance was deleted by the First Appellate Authority. 8.1. It would be relevant to consider the observations made by the Hon’ble Supreme Court in the case of CIT Vs Mysore Sugar Co. Ltd 46 ITR 649 which read as under: “To find out whether an expenditure is on the capital account or on revenue, one must consider the expenditure in relation to the business. Since all payments reduce capital in the ultimate analysis, one is apt to consider a loss as amounting to a loss of capital. But this is not true of all losses, because loosed in the runn…

ITO, Ward-1(1), Kolkata vs. M/S. Shree Gouri Shankar Jute Mills Ltd, Kolkata

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

ITA 1185/KOL/2012[2008-2009]Status: DisposedITAT Kolkata08 Oct 2015AY 2008-2009

Bench: : Shri M. Balaganesh & Shri S.S. Viswanethra Ravi

For Appellant: Shri Subash Agarwal, Advocate, ld.ARFor Respondent: Shri Pinaki Mukherjee, JCIT, ld.DR
Section 143(3)Section 36(2)Section 37

…t of recoverability would automatically fall under the category of trade debt and hence is allowable as business loss. Reliance in this regard is placed on the decision of the Hon’ble Supreme Court in the case of CIT vs Mysore Sugar Co. Ltd reported in (1962) 46 ITR 649 (SC) . The facts before the Hon’ble Apex Court and decision rendered thereon is given below:- Facts: “The assessee was a sugar company. The assessee purchased sugarcane from the sugarcane growers and crushed them in its factory to prepare sugar. As a part of its business operations. It entered into agreements with the sugarcane growers, and advanc…

The Commissioner of Income Tax -1 vs. R.S. Sudheesh

ITTA/172/2013HC Telangana03 Jul 2013

Commissioner of Income Tax vs. M/S. Dcm Shriram Consolidated Ltd

ITA/1289/2010HC Delhi30 Jul 2012
Section 271(1)Section 28

…implication disallowed by the Act. The AO did not accept this contention, and held that the outstanding amount had the character of an investment, on the basis of his appreciation of the observations of the Supreme Court, in C.I.T. v Mysore Sugar Co. Ltd 46 ITR 649; it was held that the assessee had suffered a capital loss, which could not be allowed as a revenue loss. The AO therefore, added back the sum of Rs. 2,26,73,164/- and also held that it was liable for penal action under Section 271(1) (c) of the Act. The assessee’s appeal to the Appellate Commissioner was unsuccessful. Therefore, it appealed…

Mohan Meakin Ltd vs. Commissioner of Income Tax

ITA/405/2007HC Delhi11 May 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

Section 260A(1)

…ction 37 of the Act, learned counsel has placed reliance on the cases of Chenab Forest Co. v. Commissioner of Income-Tax, Patiala, 96 ITR 568; and ITAs No.405/2007 Page 6 of 14 Commissioner of Income-Tax, Mysore v. Mysore Sugar Co. Ltd., 46 ITR 649. On the other hand, learned counsel appearing for the Revenue submitted that the advances, which had been made, cannot be regarded as expenditure and it would be in the nature of debt. As it was not such a debt which would come within the purview of Section 36, so the assessee cannot claim any deduction on this account. With regard to subm…

Dy Commissioner of Income Tax vs. Insilco Ltd

The appeal is dismissed

ITA/311/2011HC Delhi29 Apr 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

Section 260ASection 263Section 36(1)(vii)Section 36(2)Section 37

…rror, much less an error prejudicial to the interest of the revenue, in the assessment order and thus set aside the order of the CIT(A) passed under Section 263 of the Act. 10. In the case of Commissioner of Income-Tax, Mysore v. Mysore Sugar Co. Ltd., 46 ITR 649, the corresponding sections of the Income Tax 1922 were for interpretations before the Hon‟ble Supreme Court. This case related to claim of bad debts under the said Act of 1922. The assessee company was changing its case regarding claim of bad debt from one Section to another from time to time. In that context, the Hon‟ble Supreme Court o…

Dy. Commissioner of Income Tax vs. M/s.Insilco Ltd

The appeal is dismissed

ITA-311/2011HC Delhi29 Apr 2011
Section 260ASection 263Section 36(1)(vii)Section 36(2)Section 37

…rror, much less an error prejudicial to the interest of the revenue, in the assessment order and thus set aside the order of the CIT(A) passed under Section 263 of the Act. 10. In the case of Commissioner of Income-Tax, Mysore v. Mysore Sugar Co. Ltd., 46 ITR 649, the corresponding sections of the Income Tax 1922 were for interpretations before the Hon‟ble Supreme Court. This case related to claim of bad debts under the said Act of 1922. The assessee company was changing its case regarding claim of bad debt from one Section to another from time to time. In that context, the Hon‟ble Supreme Court o…

Commissioner of Income Tax vs. Agricultural Market Committee

ITTA/134/2011HC Telangana20 Apr 2011

Bench: V.V.S.RAO,RAMESH RANGANATHAN