CIT v. National Rayon Corp. Ltd.

140 ITR 143High Court1983#6765 most cited

What is CIT v. National Rayon Corp. Ltd. authority for?

Expenditure on product development may be treated as capital expenditure, leading to disallowance of weighted deduction claimed under Section 35(2AB) for in-house scientific research.

17

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2016 to 2025.

Also referred to as

CIT v. National Rayon Corp. Ltd. · 140 ITR 143 · Section 35(2AB) · Section 35 · weighted deduction · R&D expenditure · product development expenditure · capital expenditure · in-house scientific research

Sections most often in play

Section 143(3)Section 250Section 32Section 35(1)(iv)Section 35(2AB)Section 37(1)Section 35

Issues it is cited on

section 35(1)(iv)r&d expendituresection 35(1)weighted deductionsection 35(2ab)section 35associated enterprisessection 32associated enterpriserevenue expenditureinternational transactioncapital expenditure

Judgments citing CIT v. National Rayon Corp. Ltd.

DCIT Circle 8, Pune vs. Mahle Anand Thermal Systems Pvt. Ltd, Pune

In the result, the appeal and the CO filed by the assessee are partly allowed and the appeals filed by the Revenue are dismissed

ITA 96/PUN/2024[2015-16]Status: DisposedITAT Pune22 Jan 2025AY 2015-16

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2014-15

For Appellant: Shri R D OnkarFor Respondent: Shri Amol Khairnar CIT-DR
Section 143(3)Section 35Section 35(1)(iv)

…ficer while making the disallowance u/s 35(2AB) followed the decision of the Ahmedabad Bench of the Tribunal in the case of Cadila Health Care Ltd. vs. Addl. CIT (ITA No.3140/Ahd/2010), CIT vs. Ciba of India Ltd. (69 ITR 188), National Rayon Corporation ltd. (140 ITR 143) and other decisions. 3. So far as the disallowance of Product Development expenditure treating the same as capital expenditure is concerned, he followed the decision in assessee’s own case for assessment years 2006-07 to 2008-09. CO No.12/PUN/2024 4. So far as the disallowance of weighted deduction claimed u/s 35(2AB) is concerned, the Assessin…

Mahle Anand Thermal Systems Private Limited, Pune vs. Dy Commissioner of Income Tax, Pune

In the result, the appeal and the CO filed by the assessee are partly allowed and the appeals filed by the Revenue are dismissed

ITA 333/PUN/2024[2014-15]Status: DisposedITAT Pune22 Jan 2025AY 2014-15

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2014-15

For Appellant: Shri R D OnkarFor Respondent: Shri Amol Khairnar CIT-DR
Section 143(3)Section 35Section 35(1)(iv)

…ficer while making the disallowance u/s 35(2AB) followed the decision of the Ahmedabad Bench of the Tribunal in the case of Cadila Health Care Ltd. vs. Addl. CIT (ITA No.3140/Ahd/2010), CIT vs. Ciba of India Ltd. (69 ITR 188), National Rayon Corporation ltd. (140 ITR 143) and other decisions. 3. So far as the disallowance of Product Development expenditure treating the same as capital expenditure is concerned, he followed the decision in assessee’s own case for assessment years 2006-07 to 2008-09. CO No.12/PUN/2024 4. So far as the disallowance of weighted deduction claimed u/s 35(2AB) is concerned, the Assessin…

DCIT, Circle-8, Pune vs. Mahle Anand Thermal Systems Pvt. Ltd., Pune

ITA 228/PUN/2024[2017-18]Status: DisposedITAT Pune22 Jan 2025AY 2017-18

Bench: Shri R. K. Panda & Ms. Astha Chandra

For Appellant: Shri R D OnkarFor Respondent: Shri Amol Khairnar CIT-DR
Section 143(3)Section 35Section 35(1)(iv)

…ficer while making the disallowance u/s 35(2AB) followed the decision of the Ahmedabad Bench of the Tribunal in the case of Cadila Health Care Ltd. vs. Addl. CIT (ITA No.3140/Ahd/2010), CIT vs. Ciba of India Ltd. (69 ITR 188), National Rayon Corporation ltd. (140 ITR 143) and other decisions. 3. So far as the disallowance of Product Development expenditure treating the same as capital expenditure is concerned, he followed the decision in assessee's own case for assessment years 2006-07 to 2008-09. 4 ITA No.127/PUN/2024 ITA No.333/PUN/2024 ITA No.96/PUN/2024 CO No.12/PUN/2024 ITA No.228/PUN/2024 4. So far as th…

DCIT, Circle-8, Pune vs. Mahale Anand Thermal Systems Pvt. Ltd., Pune

In the result, the appeal and the CO filed by the assessee are partly allowed and the appeals filed by the Revenue are dismissed

ITA 127/PUN/2024[2014-15]Status: DisposedITAT Pune22 Jan 2025AY 2014-15

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2014-15

For Appellant: Shri R D OnkarFor Respondent: Shri Amol Khairnar CIT-DR
Section 143(3)Section 35Section 35(1)(iv)

…ficer while making the disallowance u/s 35(2AB) followed the decision of the Ahmedabad Bench of the Tribunal in the case of Cadila Health Care Ltd. vs. Addl. CIT (ITA No.3140/Ahd/2010), CIT vs. Ciba of India Ltd. (69 ITR 188), National Rayon Corporation ltd. (140 ITR 143) and other decisions. 3. So far as the disallowance of Product Development expenditure treating the same as capital expenditure is concerned, he followed the decision in assessee’s own case for assessment years 2006-07 to 2008-09. CO No.12/PUN/2024 4. So far as the disallowance of weighted deduction claimed u/s 35(2AB) is concerned, the Assessin…

ACIT, New Delhi vs. M/S Dhara Vegetable Oil & Foods Co. Ltd., New Delhi

In the result, the appeal filed by the revenue is accordingly dismissed

ITA 505/DEL/2011[2006-07]Status: DisposedITAT Delhi05 Aug 2019AY 2006-07

Bench: Sh. N. K. Billaiya & Sh. Laliet Kumar

Section 41Section 41(1)Section 44

…sessee could not be established which is primarily required for allowance of deduction u/s 35(1 )(i) of the Act. 27. We find the answer to this quarrel is in the decision of the Hon’ble High Court of Bombay in the case of National Rayon Corporation Limited 140 ITR 143 wherein the Hon'ble High Court has held that for claiming the deduction u/s 35(1)(i) of the Act, research must have been carried on by the assessee itself is not borne out by phraseology of the statutory provision. The assessee can claim the deduction even if the research is carried on by some other person on behalf of the assessee. 28. Second…

ACIT, New Delhi vs. M/S. Dhara Vegetable Oil & Foods Co. Ltd., New Delhi

In the result, the appeal filed by the revenue is accordingly dismissed

ITA 1113/DEL/2011[2005-06]Status: DisposedITAT Delhi05 Aug 2019AY 2005-06

Bench: Sh. N. K. Billaiya & Sh. Laliet Kumar

Section 41Section 41(1)Section 44

…sessee could not be established which is primarily required for allowance of deduction u/s 35(1 )(i) of the Act. 27. We find the answer to this quarrel is in the decision of the Hon’ble High Court of Bombay in the case of National Rayon Corporation Limited 140 ITR 143 wherein the Hon'ble High Court has held that for claiming the deduction u/s 35(1)(i) of the Act, research must have been carried on by the assessee itself is not borne out by phraseology of the statutory provision. The assessee can claim the deduction even if the research is carried on by some other person on behalf of the assessee. 28. Second…

Dhara Vegetable Oil Foods Company Ltd., New Delhi vs. ACIT, New Delhi

In the result, the appeal filed by the revenue is accordingly dismissed

ITA 1022/DEL/2011[2005-06]Status: DisposedITAT Delhi05 Aug 2019AY 2005-06

Bench: Sh. N. K. Billaiya & Sh. Laliet Kumar

Section 41Section 41(1)Section 44

…sessee could not be established which is primarily required for allowance of deduction u/s 35(1 )(i) of the Act. 27. We find the answer to this quarrel is in the decision of the Hon’ble High Court of Bombay in the case of National Rayon Corporation Limited 140 ITR 143 wherein the Hon'ble High Court has held that for claiming the deduction u/s 35(1)(i) of the Act, research must have been carried on by the assessee itself is not borne out by phraseology of the statutory provision. The assessee can claim the deduction even if the research is carried on by some other person on behalf of the assessee. 28. Second…

Dhara Vegetable Oil Foods Company Ltd., New Delhi vs. ACIT, New Delhi

In the result, the appeal filed by the revenue is accordingly dismissed

ITA 1021/DEL/2011[2004-05]Status: DisposedITAT Delhi05 Aug 2019AY 2004-05

Bench: Sh. N. K. Billaiya & Sh. Laliet Kumar

Section 41Section 41(1)Section 44

…sessee could not be established which is primarily required for allowance of deduction u/s 35(1 )(i) of the Act. 27. We find the answer to this quarrel is in the decision of the Hon’ble High Court of Bombay in the case of National Rayon Corporation Limited 140 ITR 143 wherein the Hon'ble High Court has held that for claiming the deduction u/s 35(1)(i) of the Act, research must have been carried on by the assessee itself is not borne out by phraseology of the statutory provision. The assessee can claim the deduction even if the research is carried on by some other person on behalf of the assessee. 28. Second…

DCIT 6(2), Mumbai vs. E Bay India P Ltd, Mumbai

In the result, appeal filed by the revenue is dismissed and cross objection filed by the assessee is allowed

ITA 7098/MUM/2012[2007-08]Status: DisposedITAT Mumbai18 Mar 2019AY 2007-08

Bench: Shri G.S. Pannu (Vp) & Shri Ram Lal Negi (Jm) Assessment Year: 2007-2008 The Dcit-6 (2), M/S. E-Bay India Pvt. Ltd., Room No. 563, 202, B-Wing, Phoenix House, Aayakar Bhavan, M.K. Road, 462, Senapati Bapat Marg, Churchgate, Vs. Lower Parel, Mumbai - 400020 Mumbai – 13 Pan: Aabcb2307H (Appellant) (Respondent) Co No. 37/Mum/2012 Assessment Year: 2007-2008 M/S. E-Bay India Pvt. Ltd., The Dcit- Circle 6(2), 14Th Floor, North Block, Room No. 563, R-Tech Park, Aayakar Bhavan, Western Express Highway, Vs. M.K. Road, Churchgate, Goregaon (East), Mumbai - 400020 Mumbai - 400063 Pan: Aabcb2307H (Appellant) (Respondent)

For Appellant: Shri M.P. Lohia &For Respondent: S.K. Mishra (DR)
Section 143Section 37Section 37(1)

…of the revenue. The Ld. counsel relied on the following cases to substantiate the contention of the assessee:- 1. Maruti Udyog Limited (92 ITD 119) Delhi Tribunal. 2. J B Advani & Company Limited (18 ITR 557) (Bombay High Court) 3. National Rayon Corporation (155 ITR 413) (Bombay High Court) 4. J N Singh & Company Private Limited (60 ITR 732) (Punjab & Haryana High Court) 5. Ahmedabad Controlled Iron & Steel Reg. Stockholders Association Private Limited (99 ITR 567) (Gujarat High Court). 6. We have heard the rival submissions and also perused the material on record including the cases relied upon by the parties.…

DCIT, New Delhi vs. M/S. Dhara Vegetable Oil and Foods Company Ltd., New Delhi

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

ITA 2875/DEL/2013[2003-04]Status: DisposedITAT Delhi11 Oct 2018AY 2003-04

Bench: Shri N.K. Billaiya & Smt Beena A. Pillai[A.Y 2003-04] The Dy. C.I.T Vs. M/S Dhara Vegetable Oil & Foods Circle – 5(1) Company Ltd [Now Amalgamated New Delhi With Mother Dairy Fruit & Vegetable Pvt. Ltd, Mother Dairy, Patparganj, New Delhi Pan : Aaccm 3174 A [Appellant] [Respondent] Date Of Hearing : 25.09.2018 Date Of Pronouncement : 11.10.2018

For Appellant: Shri S.D. Kapila, AdvFor Respondent: Ms. Ashima Neb, Sr. DR
Section 143(3)Section 32Section 35(1)(i)Section 35(1)(ii)Section 35(1)(iv)

…assessee could not be established which is primarily required for allowance of deduction u/s 35(1)(i) of the Act. 27. We find the answer to this quarrel is in the decision of the Hon'ble High Court of Bombay in the case of National Rayon Corporation Limited 140 ITR 143 wherein the Hon'ble High Court has held that for claiming the deduction u/s 35(1)(i) of the Act, research must have been carried on by the assessee itself is not borne out by phraseology of the statutory provision. The assessee can claim the deduction even if the research is carried on by some other person on behalf of the assessee. 28. Second q…

Hiranandani Akruti Jv, Mumbai vs. DCIT Cen Cir 5(1), Mumbai

The appeal of the assessee is partly allowed

ITA 5678/MUM/2015[2012-13]Status: DisposedITAT Mumbai03 Oct 2017AY 2012-13

Bench: Shri Joginder Singh & Shri Ramit Kocharassessment Year: 2012-13 Hiranandani Akruti Jv, Dcit, 6Th Floor, Akruti Trade Centre, Central Circle-5(1), बनाम/ Road No.7, Marol, M.I.D.C. Mumbai Vs. Andheri (East), Mumbai-400093 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No.Aaaa1443H

Section 115Section 143(1)Section 143(2)Section 143(3)Section 2Section 30Section 37(1)Section 57

…defence of accused). 5) Parshva Properties Ltd. v. CIT, (1976) 104 ITR 631 (Cal) [expenses incurred in defending employees of the assessee-company in a criminal prosecution for violating Mines Regulations]. 6) CIT v. National Rayon Corporation Ltd., (1985) 155 ITR 413 (Bom) [expenditure incurred in defending a senior employee of the assessee was held deductible]. 7) CIT v. Indian Copper Corporation Ltd., (1986) 162 ITR 905 (Pat) [expenditure incurred in defending watchmen and other employees who guarded the premises of company]. 8) Atlas Cycle Industries Ltd. v. CIT, (1990) 181 ITR 18 (Punj) [expenditure inc…

D.C.I.T.RG.8(3), Mumbai vs. Sanofi Synthelabo (I) Pvt. Ltd., Mumbai

In the result, all the three appeals of Revenue are dismissed

ITA 7592/MUM/2011[2006-07]Status: DisposedITAT Mumbai22 Nov 2016AY 2006-07

Bench: Sri Mahavir Singh, Jm & Ashwani Taneja, Am

Section 143(3)

…loses its significance while considering its deductibility because the nature of expenditure is on account of R&D and is admissible u//s 35(1)(iv). It is also noted that the Hon’ble Bombay HC in the case of CIT Vs. National Rayon Corp. Ltd, reported in (1983) 140 ITR 143 (Bom) has held that for claiming deduction u/s 35(1), it is not necessary that the research must carried on by the assessee himself. It can be claimed even if the research must carried on by the assessee himself. It can be claimed even if the research is carried on by some other person on behalf of the assessee. Thus the appellant company’s claim…

D.C.I.T. 8(3), Mumbai vs. Sanofi Syntheabo (India) Limited, Mumbai

In the result, all the three appeals of Revenue are dismissed

ITA 6755/MUM/2011[2005-06]Status: DisposedITAT Mumbai22 Nov 2016AY 2005-06

Bench: Sri Mahavir Singh, Jm & Ashwani Taneja, Am

Section 143(3)

…loses its significance while considering its deductibility because the nature of expenditure is on account of R&D and is admissible u//s 35(1)(iv). It is also noted that the Hon’ble Bombay HC in the case of CIT Vs. National Rayon Corp. Ltd, reported in (1983) 140 ITR 143 (Bom) has held that for claiming deduction u/s 35(1), it is not necessary that the research must carried on by the assessee himself. It can be claimed even if the research must carried on by the assessee himself. It can be claimed even if the research is carried on by some other person on behalf of the assessee. Thus the appellant company’s claim…

ACIT RG 8(3), Mumbai vs. Sanofi Synthellabo (I) Ltd, Mumbai

In the result, all the three appeals of Revenue are dismissed

ITA 6720/MUM/2011[2004-05]Status: DisposedITAT Mumbai22 Nov 2016AY 2004-05

Bench: Sri Mahavir Singh, Jm & Ashwani Taneja, Am

Section 143(3)

…loses its significance while considering its deductibility because the nature of expenditure is on account of R&D and is admissible u//s 35(1)(iv). It is also noted that the Hon’ble Bombay HC in the case of CIT Vs. National Rayon Corp. Ltd, reported in (1983) 140 ITR 143 (Bom) has held that for claiming deduction u/s 35(1), it is not necessary that the research must carried on by the assessee himself. It can be claimed even if the research must carried on by the assessee himself. It can be claimed even if the research is carried on by some other person on behalf of the assessee. Thus the appellant company’s claim…

Navinchandra N . Majithia, Mumbai vs. ITO 9(2)(1), Mumbai

The appeal of the assessee is partly allowed

ITA 2830/MUM/2013[1999-00]Status: DisposedITAT Mumbai18 Nov 2016AY 1999-00

Bench: Shri Joginder Singh & Shri N.K. Pradhanassessment Year: 1999-2000 Shri Navinchandra N. Income Tax Officer-9(2)(1) Majithia, Aayakar Bhavan, बनाम/ 304, Kedia Chambers, M.K. Road, Vs. Near New Era Cinema, Mumbai-400020 S.V. Road, Malad (W), Mumbai-400064 ("नधा"रती /Assessee) (राज"व /Revenue) P.A. No. Aaepm6435F "नधा"रती क" ओर से / Assessee By M/S. Keyuri Desai Shri Sushil Kumar Poddar,Dr राज"व क" ओर से / Revenue By 16/11/2016 सुनवाई क" तार"ख / Date Of Hearing : 18/11/2016 आदेश क" तार"ख /Date Of Order:

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ, बी, मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “B”, MUMBAI "ी जो"ग"दर "संह, "या"यक सद"य एवं "ी एन. के. "धान, लेखा सद"य, के सम" Before Shri Joginder Singh, Judicial Member, and Shri N.K. Pradhan, Accountant Member Assessment Year: 1999-2000 Shri Navinchandra N. Income Tax Officer-9(2)(1) Majithia, Aayakar Bhavan, बनाम/ 304, Kedia Chambers, M.K. Road, Vs. Near New Era Cinema, Mumbai-400020 S.V. Road, Malad (W), Mumbai-400064 ("नधा"रती /Assessee) (राज"व /Revenue) P.A. No. AAEPM6435F "नधा"रती क" ओर से / Assessee by M/s. Keyuri Desai Shri Sushil Kumar Poddar,DR राज"…

DCIT Cir 6(1), Mumbai vs. Indiareit Fund Advisors P. Ltd, Mumbai

In the result, both the appeals of assessee and that of the revenue are dismissed

ITA 3218/MUM/2013[2009-10]Status: DisposedITAT Mumbai15 Apr 2016AY 2009-10

Bench: Shri R. C. Sharma, Am & Shri Mahavir Singh, Jm आयकर अपील सं./I.T.A. No. 3218/Mum/2013 ("नधा"रण वष" / Assessment Year: 2009-10) Dy. Cit, Circ.6(1), R. No. 506, Indiareit Fund Advisors Pvt. Ltd. 5Th Floor, Aaykar Bhavan, M. K. Road, बनाम/ 3Rd Floor, Nicholas Primal Tower, Mumbai-400 020 Ganpatrai Kadam Marg, Lower Vs. Parel, Mumbai-400 013 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabci3931J (Revenue) (Assessee) : आयकर अपील सं./I.T.A. No. 3099/Mum/2013 ("नधा"रण वष" / Assessment Year: 2009-10) Indiareit Fund Advisors Pvt. Ltd. Dy. Cit, Circ.6(1), R. No. 506, 3Rd Floor, Nicholas Primal Tower, बनाम/ 5Th Floor, Aaykar Bhavan, M. K. Ganpatrai Kadam Marg, Lower Parel, Road, Mumbai-400 020 Vs. Mumbai-400 013 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabci3931J (Assessee) : (Revenue) Revenue By : Shri V. S. Jadhav Assessee By : Shri Arun Chhabra सुनवाई क" तार"ख / : 29.03.2016 Date Of Hearing घोषणा क" तार"ख / : 15.04.2016 Date Of Pronouncement आदेश / O R D E R Per Mahavir Singh, Jm: These Are Cross Appeals, By Revenue & The Assessee, Are Arising Out Of Order Of Cit(A), Mumbai In Appeal No. Cit(A)-14/It.39/Rg.6(1)/11-12 Dated 31.01.2013. 2

For Appellant: Shri Arun ChhabraFor Respondent: Shri V. S. Jadhav
Section 143(3)Section 14A

…so shown monetary fees and advisory fee from Indiareit Investment Management Co. In view of these arguments, the ld. Counsel for the assessee relied on the decision of the Hon’ble Bombay High Court in the case of CIT vs. National Rayon Corporation ltd. [1985] 155 ITR 413 (Bom). 10. On the other hand, the ld. Sr. DR relied on the orders of the lower authorities. 11. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the assessee-company is in the business of providing investment advisory services. During the year under consideration it has shown management fe…

Indiareit Fund Advisors P. Ltd, Mumbai vs. Addl CIT RG 6(1), Mumbai

In the result, both the appeals of assessee and that of the revenue are dismissed

ITA 3099/MUM/2013[2009-10]Status: DisposedITAT Mumbai15 Apr 2016AY 2009-10

Bench: Shri R. C. Sharma, Am & Shri Mahavir Singh, Jm आयकर अपील सं./I.T.A. No. 3218/Mum/2013 ("नधा"रण वष" / Assessment Year: 2009-10) Dy. Cit, Circ.6(1), R. No. 506, Indiareit Fund Advisors Pvt. Ltd. 5Th Floor, Aaykar Bhavan, M. K. Road, बनाम/ 3Rd Floor, Nicholas Primal Tower, Mumbai-400 020 Ganpatrai Kadam Marg, Lower Vs. Parel, Mumbai-400 013 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabci3931J (Revenue) (Assessee) : आयकर अपील सं./I.T.A. No. 3099/Mum/2013 ("नधा"रण वष" / Assessment Year: 2009-10) Indiareit Fund Advisors Pvt. Ltd. Dy. Cit, Circ.6(1), R. No. 506, 3Rd Floor, Nicholas Primal Tower, बनाम/ 5Th Floor, Aaykar Bhavan, M. K. Ganpatrai Kadam Marg, Lower Parel, Road, Mumbai-400 020 Vs. Mumbai-400 013 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabci3931J (Assessee) : (Revenue) Revenue By : Shri V. S. Jadhav Assessee By : Shri Arun Chhabra सुनवाई क" तार"ख / : 29.03.2016 Date Of Hearing घोषणा क" तार"ख / : 15.04.2016 Date Of Pronouncement आदेश / O R D E R Per Mahavir Singh, Jm: These Are Cross Appeals, By Revenue & The Assessee, Are Arising Out Of Order Of Cit(A), Mumbai In Appeal No. Cit(A)-14/It.39/Rg.6(1)/11-12 Dated 31.01.2013. 2

For Appellant: Shri Arun ChhabraFor Respondent: Shri V. S. Jadhav
Section 143(3)Section 14A

…so shown monetary fees and advisory fee from Indiareit Investment Management Co. In view of these arguments, the ld. Counsel for the assessee relied on the decision of the Hon’ble Bombay High Court in the case of CIT vs. National Rayon Corporation ltd. [1985] 155 ITR 413 (Bom). 10. On the other hand, the ld. Sr. DR relied on the orders of the lower authorities. 11. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the assessee-company is in the business of providing investment advisory services. During the year under consideration it has shown management fe…

CIT v. National Rayon Corp. Ltd. (140 ITR 143) — Cited in 17 Judgments | BharatTax