CIT v. Shree Rajasthan Syntex Ltd.

313 ITR 231High Court2009#2103 most cited

What is CIT v. Shree Rajasthan Syntex Ltd. authority for?

This case establishes principles for distinguishing operating leases from finance leases and determining if leased equipment constitutes a Permanent Establishment (PE). It also clarifies that reassessment proceedings initiated on borrowed satisfaction without independent application of mind are invalid.

55

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2016 to 2025.

Also referred to as

CIT v. Shree Rajasthan Syntex Ltd. · 313 ITR 231 · Section 9(1)(vi) · Section 147 · operating lease · finance lease · permanent establishment · PE aircraft · DTAA · reassessment · borrowed satisfaction

Sections most often in play

Section 143(3)Section 144C(13)Section 234BSection 9(1)(vi)Section 5(1)Section 11Section 12Section 7

Issues it is cited on

dtaa benefitprincipal purpose testmultilateral instrumentsection 90(1)use of equipmentfixed place petreaty benefitscommercial substancesection 147(1)pptsubstance over formtax residency certificate

Judgments citing CIT v. Shree Rajasthan Syntex Ltd.

RMS KARAMCHARI BACHAT AND SAKH SAHAKARI SAMITI LIMITED JAIPUR,JAIPUR vs. ITO WARD-1(2), JAIPUR, JAIPUR

In the result, the appeals of the assessee are allowed

ITA 246/JPR/2025[2016-17]Status: DisposedITAT Jaipur13 Oct 2025AY 2016-17
For Appellant: Shri Deepak Sharma, C.AFor Respondent: Smt. Anita Rinesh, JCIT
Section 147Section 250

…it was held that mere reproduction of information from\nan external source without independent application of mind does not confer jurisdiction\nto reopen an assessment. Similarly, the Hon'ble Rajasthan High Court in CIT v. Shree\nRajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.) held that suspicion, however strong,\ncannot substitute for the statutory requirement of “reason to believe.”\n6. Quantification and Belief Formation: Another important aspect which invalidates\nthe reopening is the absence of proper quantification in the reasons recorded. The AO is\nduty-bound to clearly record the amount of alleged escap…

RMS KARAMCHARI BACHAT AND SAKH SAHAKARI SAMITI LIMITED JAIPUR,JAIPUR vs. ITO WARD-1(2), JAIPUR, JAIPUR

In the result, the appeals of the assessee are allowed

ITA 245/JPR/2025[2015-16]Status: DisposedITAT Jaipur13 Oct 2025AY 2015-16
For Appellant: Shri Deepak Sharma, C.AFor Respondent: Smt. Anita Rinesh, JCIT
Section 147Section 250

…it was held that mere reproduction of information from\nan external source without independent application of mind does not confer jurisdiction\nto reopen an assessment. Similarly, the Hon'ble Rajasthan High Court in CIT v. Shree\nRajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.) held that suspicion, however strong,\ncannot substitute for the statutory requirement of “reason to believe.”\n6. Quantification and Belief Formation: Another important aspect which invalidates\nthe reopening is the absence of proper quantification in the reasons recorded. The AO is\nduty-bound to clearly record the amount of alleged escap…

RMS KARAMCHARI BACHAT AND SAKH SAHAKARI SAMITI LIMITED JAIPUR,JAIPUR vs. ITO, WARD-1(2), JAIPUR, JAIPUR

In the result, the appeals of the assessee are allowed

ITA 244/JPR/2025[2014-15]Status: DisposedITAT Jaipur13 Oct 2025AY 2014-15
For Appellant: Shri Deepak Sharma, C.AFor Respondent: Smt. Anita Rinesh, JCIT
Section 147Section 250

…it was held that mere reproduction of information from\nan external source without independent application of mind does not confer jurisdiction\nto reopen an assessment. Similarly, the Hon'ble Rajasthan High Court in CIT v. Shree\nRajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.) held that suspicion, however strong,\ncannot substitute for the statutory requirement of “reason to believe.”\n6. Quantification and Belief Formation: Another important aspect which invalidates\nthe reopening is the absence of proper quantification in the reasons recorded. The AO is\nduty-bound to clearly record the amount of alleged escap…

RMS KARAMCHARI BACHAT AND SAKH SAHAKARI SAMITI LIMITED JAIPUR,JAIPUR vs. ITO WARD-1(2), JAIPUR, JAIPUR

In the result, the appeals of the assessee are allowed

ITA 243/JPR/2025[2013-14]Status: DisposedITAT Jaipur13 Oct 2025AY 2013-14
For Appellant: Shri Deepak Sharma, C.AFor Respondent: Smt. Anita Rinesh, JCIT
Section 147Section 250

…it was held that mere reproduction of information from\nan external source without independent application of mind does not confer jurisdiction\nto reopen an assessment. Similarly, the Hon'ble Rajasthan High Court in CIT v. Shree\nRajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.) held that suspicion, however strong,\ncannot substitute for the statutory requirement of “reason to believe.”\n\n6. Quantification and Belief Formation: Another important aspect which invalidates\nthe reopening is the absence of proper quantification in the reasons recorded. The AO is\nduty-bound to clearly record the amount of alleged esc…

SKY HIGH II LEASING COMPANY LIMITED ,MUMBAI vs. THE ASSISTANT COMMISSIONER OF INCOME TAX (INTERNATIONAL TAX) CIRCLE 4(2)(1), MUMBAI

ITA 1550/MUM/2025[2022-23]Status: DisposedITAT Mumbai06 Oct 2025AY 2022-23

Bench: Shri Amit Shukla, Jm & Ms Padmavathy S, Am

Section 143(3)Section 9(1)(vi)

…ase the asset is returned to the lessor at the end of the lease period and that as per RBI regulations purchase of aircraft requires specific approval. The ratio laid down by Hon'ble Rajasthan High Court in the case of CIT v. Shri Rajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.), are relevant in this regard.  In operating leases, ownership remains with the lessor, depreciation belongs to the lessor, and lease charges are deductible revenue expenses for the lessee which in the present case is factually established.  Accordingly, the DRP erred in classifying the leases as finance leases and hence the lease income…

SKY HIGH LXXX LEASING COMPANY LIMITED ,MUMBAI vs. THE ASSISTANT COMMISSIONER OF INCOME TAX (INTERNATIONAL TAX) CIRCLE 4(2)(1), MUMBAI

ITA 1549/MUM/2025[2022-23]Status: DisposedITAT Mumbai06 Oct 2025AY 2022-23

Bench: Shri Amit Shukla, Jm & Ms Padmavathy S, Am

Section 143(3)Section 9(1)(vi)

…ase the asset is returned to the lessor at the end of the lease period and that as per RBI regulations purchase of aircraft requires specific approval. The ratio laid down by Hon'ble Rajasthan High Court in the case of CIT v. Shri Rajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.), are relevant in this regard.  In operating leases, ownership remains with the lessor, depreciation belongs to the lessor, and lease charges are deductible revenue expenses for the lessee which in the present case is factually established.  Accordingly, the DRP erred in classifying the leases as finance leases and hence the lease income…

SKY HIGH LXXVIII LEASING COMPANY LIMITED ,MUMBAI vs. THE ASSISTANT COMMISSIONER OF INCOME TAX (INTERNATIONAL TAX) CIRCLE 4(2)(1), MUMBAI

ITA 1548/MUM/2025[2022-23]Status: DisposedITAT Mumbai06 Oct 2025AY 2022-23

Bench: Shri Amit Shukla, Jm & Ms Padmavathy S, Am

Section 143(3)Section 9(1)(vi)

…ase the asset is returned to the lessor at the end of the lease period and that as per RBI regulations purchase of aircraft requires specific approval. The ratio laid down by Hon'ble Rajasthan High Court in the case of CIT v. Shri Rajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.), are relevant in this regard.  In operating leases, ownership remains with the lessor, depreciation belongs to the lessor, and lease charges are deductible revenue expenses for the lessee which in the present case is factually established.  Accordingly, the DRP erred in classifying the leases as finance leases and hence the lease income…

SKY HIGH LXXIX LEASING COMPANY LIMITED ,MUMBAI vs. THE ASSISTANT COMMISSIONER OF INCOME TAX (INTERNATIONAL TAX) CIRCLE 4(2)(1), MUMBAI

ITA 1546/MUM/2025[2022-23]Status: DisposedITAT Mumbai06 Oct 2025AY 2022-23

Bench: Shri Amit Shukla, Jm & Ms Padmavathy S, Am

Section 143(3)Section 9(1)(vi)

…ase the asset is returned to the lessor at the end of the lease period and that as per RBI regulations purchase of aircraft requires specific approval. The ratio laid down by Hon'ble Rajasthan High Court in the case of CIT v. Shri Rajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.), are relevant in this regard.  In operating leases, ownership remains with the lessor, depreciation belongs to the lessor, and lease charges are deductible revenue expenses for the lessee which in the present case is factually established.  Accordingly, the DRP erred in classifying the leases as finance leases and hence the lease income…

TFDAC IRELAND II LIMITED,IRELAND vs. DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAX CIRCLE 4(1)(2) MUMBAI, MUMBAI

ITA 1198/MUM/2025[2022-23]Status: DisposedITAT Mumbai13 Aug 2025AY 2022-23
Section 143(3)Section 144C(13)Section 144C(5)

…of the Recovery of Debts and Bankruptcy Act, 1993 define a finance lease as one in which the lessee becomes the owner at the expiry of the term or upon payment of an agreed residual amount. The Rajasthan High Court in CIT v. Shri Rajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.) applied a similar lens, emphasising the transfer-of ownership feature as central to finance leases. None of these indicia is present here. Ld. Counsel also placed reliance on the IndiGo proceedings (the very lessee here) across multiple years. In particular, the order dated 18 November 2016 in ITA Nos.749 & 750/Del/2016 for AYs 2008-09 & 2…

DAE(SY22) LEASING (IRELAND)41, DESIGNATED ACTIVITY COMPANY ,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION CIRCLE 2(1)(2), MUMBAI

ITA 1157/MUM/2025[2022-23]Status: DisposedITAT Mumbai13 Aug 2025AY 2022-23

Bench: SHRI AMIT SHUKLA (Judicial Member), MS PADMAVATHY S (Accountant Member)

Section 143(3)Section 144C(13)Section 144C(5)

…of the Recovery of Debts and Bankruptcy Act, 1993 define a finance lease as one in which the lessee becomes the owner at the expiry of the term or upon payment of an agreed residual amount. The Rajasthan High Court in CIT v. Shri Rajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.) applied a similar lens, emphasising the transfer-of- ownership feature as central to finance leases. None of these indicia is present here. Ld. Counsel also placed reliance on the IndiGo proceedings (the very lessee here) across multiple years. In particular, the order dated 18 November 2016 in ITA Nos. 749 & 750/Del/2016 for AYs 2008-09 &…

DAE (SABS) LEASING IRELAND 43 DESIGNATED ACTIVITY COMPANY,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX INT TAX.CIRCLE 2(1)(2), MUMBAI

ITA 1156/MUM/2025[2022-22]Status: DisposedITAT Mumbai13 Aug 2025AY 2022-22
Section 143(3)Section 144C(13)Section 144C(5)

…the Recovery of Debts and\nBankruptcy Act, 1993 define a finance lease as one in which the\nlessee becomes the owner at the expiry of the term or upon\npayment of an agreed residual amount. The Rajasthan High\nCourt in CIT v. Shri Rajasthan Syntex Ltd. (2009) 313 ITR 231\n(Raj.) applied a similar lens, emphasising the transfer-of-\nownership feature as central to finance leases. None of these\nindicia is present here. Ld. Counsel also placed reliance on the\nIndiGo proceedings (the very lessee here) across multiple years.\nIn particular, the order dated 18 November 2016 in ITA Nos.749\n& 750/Del/2016 for AYs 2008…

DAE (SABS) 10296 IRELAND DESIGNATED ACTIVITY COMPANY,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX (INT TAXATION), CIRLCE 2(1)(2), MUMBAI

ITA 1155/MUM/2025[2022-23]Status: DisposedITAT Mumbai13 Aug 2025AY 2022-23
Section 143(3)Section 144C(13)

…the Recovery of Debts and\nBankruptcy Act, 1993 define a finance lease as one in which the\nlessee becomes the owner at the expiry of the term or upon\npayment of an agreed residual amount. The Rajasthan High\nCourt in CIT v. Shri Rajasthan Syntex Ltd. (2009) 313 ITR 231\n(Raj.) applied a similar lens, emphasising the transfer-of-\nownership feature as central to finance leases. None of these\nindicia is present here. Ld. Counsel also placed reliance on the\nIndiGo proceedings (the very lessee here) across multiple years.\nIn particular, the order dated 18 November 2016 in ITA Nos.749\n& 750/Del/2016 for AYs 2008…

SKY HIGH XLIII LEASING COMPANY LIMITED,IRELAND vs. ASSISTANT COMMISSIONER OF INCOME TAX INT TAX CIRCLE 4 (2) (1) MUMBAI, MUMBAI

ITA 1122/MUM/2025[2022-2023]Status: DisposedITAT Mumbai13 Aug 2025AY 2022-2023
Section 143(3)Section 144C(13)

…the Recovery of Debts and\nBankruptcy Act, 1993 define a finance lease as one in which the\nlessee becomes the owner at the expiry of the term or upon\npayment of an agreed residual amount. The Rajasthan High\nCourt in CIT v. Shri Rajasthan Syntex Ltd. (2009) 313 ITR 231\n(Raj.) applied a similar lens, emphasising the transfer-of-\nownership feature as central to finance leases. None of these\nindicia is present here. Ld. Counsel also placed reliance on the\nIndiGo proceedings (the very lessee here) across multiple years.\nIn particular, the order dated 18 November 2016 in ITA Nos.749\n& 750/Del/2016 for AYs 2008…

ORTUS AIRCRAFT LEASE 6(DUBLIN) LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(2)(2) INTERNATIONAL TAXATION, MUMBAI

ITA 1106/MUM/2025[2022-23]Status: DisposedITAT Mumbai13 Aug 2025AY 2022-23

Bench: SHRI AMIT SHUKLA (Judicial Member), MS PADMAVATHY S (Accountant Member)

Section 143(3)Section 144C(13)Section 144C(5)

…of the Recovery of Debts and Bankruptcy Act, 1993 define a finance lease as one in which the lessee becomes the owner at the expiry of the term or upon payment of an agreed residual amount. The Rajasthan High Court in CIT v. Shri Rajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.) applied a similar lens, emphasising the transfer-of- ownership feature as central to finance leases. None of these indicia is present here. Ld. Counsel also placed reliance on the IndiGo proceedings (the very lessee here) across multiple years. In particular, the order dated 18 November 2016 in ITA Nos. 749 & 750/Del/2016 for AYs 2008-09 &…

MAHENDRA SHARMA,JAIPUR vs. ITO, WARD-3(1), JAIPUR

In the result, the appeal of the assessee is allowed

ITA 654/JPR/2023[2011-12]Status: DisposedITAT Jaipur25 Mar 2025AY 2011-12
For Appellant: Shri Sarwan Kumar Gupta, AdvFor Respondent: Shri Anup Singh, Addl.CIT
Section 143(2)Section 143(3)Section 147Section 148Section 151Section 250

…isdiction and further AO not recorded his satisfaction and re-assessment is based on\nborrowed satisfaction which was not sufficient to confer power on the AO to initiate\nreassessment proceedings against assessee.\n\nCIT vs. Shree Rajasthan Syntex Ltd. (2009)313 ITR 231 (Raj.) SLP dismissed (2009)\n313 ITR (St.) 27 (SC);\n\nSun Pharmaceutical Industries Ltd. Vs. DY. CIT (2016)287 CTR(Del.)621;\n\nThe Impugned initiation of assessment proceedings had started by the AO on borrowed\nsatisfaction but not their own which is mandatory condition of the law as provided for re\n-opening of any assessment. Section 147 of…

ARUN BHARDWAJ,DELHI vs. ACIT CIRCLE 1 , JAIPUR

In the result, appeal of the assessee is allowed

ITA 1190/JPR/2024[2010-2011]Status: DisposedITAT Jaipur08 Jan 2025AY 2010-2011

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

For Appellant: Shri S.L. Jain, Advocate &For Respondent: Shri Gautam Singh Choudhary, JCIT
Section 139(1)Section 147Section 148Section 234ASection 250

…urisdiction and further AO not recorded his satisfaction re-assessment is based on borrowed satisfaction which was not sufficient to confer power on the AO to initiate re-assessment proceedings against the assessee. CIT Vs. Shree Rajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.) SLP dismissed: (2009) 313 ITR (St.) 27 (SC) Sun Pharmaceutical Industries Lt. Vs. Dy. CIT (2016) 287 CTR (Del.) 621 Submission; The impugned case was re-opened on the basis of AIR Information as received by the Ld. AO that the assessee has made payment for credit card bills of Rs. 2,89,995/- and received fees for professional or technic…

PRABHATI DEVI,DAUSA vs. ITO WARD DAUSA , DAUSA

ITA 1031/JPR/2024[2011-12]Status: HeardITAT Jaipur01 Oct 2024AY 2011-12
For Appellant: Shri Sarwan Kumar Gupta, Advocate &For Respondent: Shri Gautam Singh Chaudhary, JCIT D/R
Section 144Section 147Section 148Section 234ASection 250

…t jurisdiction and further AO not recorded his satisfaction and re-assessment is based on borrowed satisfaction which was not sufficient to confer power on the AO to initiate reassessment proceedings against assessee. CIT vs. Shree Rajasthan Syntex Ltd. (2009)313 ITR 231 (Raj.) SLP dismissed (2009) 313 ITR (St.) 27 (SC); Sun. Pharmaceutical Industries Ltd. Vs. DY. CIT (2016)287 CTR(Del.) 621; The Impugned initiation of assessment proceedings had started by the AO on borrowed satisfaction but not their own which is mandatory condition of the law as provided for re -opening of any assessment. Section 147 of Act cle…

AKIK MARKETING INDIA PVT LTD,NEW DELHI vs. ITO WARD - 2(1), NEW DELHI

ITA 4559/DEL/2019[2010-11]Status: DisposedITAT Delhi11 Jan 2024AY 2010-11

Bench: Shri M. Balaganesh & Shri Anubhav Sharmaassessment Year : 2010-11 Akik Marketing India Pvt. Ltd. Vs. Ito, N-39, Ground Floor, Ward 2(1), Greater Kailash-I, New Delhi New Delhi-110048 Pan : Aaaca6579K (Appellant) (Respondent) Assessee By : Shri Gurjeet Singh, Ca & Shri Shantanu Jain, Adv. Revenue By : Shri Kanav Bali, Sr. Dr

For Appellant: Shri Gurjeet Singh, CA &For Respondent: Shri Kanav Bali, Sr. DR
Section 147Section 68

…assessment u/s 148 of the Act. Ld. AR placed reliance upon following mentioned judgments: - i) Hon/ble Delhi High Court in G & G Pharma 384 ITR 147 ii) Hon’ble Delhi High Court in Meenakshi Overseas 395 ITR 677 iii) CIT vs. Shree Rajasthan Syntex Ltd. (2009) 313 ITR 231 (Raj.) iv) Sarthak Securities Co. (P) Ltd. vs. ITO (2010) 47 DTR 201 (Delhi) v) Hon’ble Delhi high Court Sabh Infrastructure 398 ITR 198 5 4559/Del/2019 7. As with regard to ground no. 4, Ld. AR has submitted that Section 151 of the Act clearly stipulates that the Pr.CIT, who is the competent authority to authorize the reassessment notice made…

DINESH AGARWAL,JAIPUR vs. DCIT CIR-6, JAIPUR

ITA 17/JPR/2022[2008-09]Status: DisposedITAT Jaipur30 Jun 2023AY 2008-09

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Shrawan Kumar Gupta (C.A.)For Respondent: Mrs Monisha Choudhary (Addl.CIT)
Section 147Section 148Section 50C

…jurisdiction and further AO not recorded his satisfaction re-assessment is based on borrowed satisfaction which was not sufficient to confer power on the AO to initiate re-assessment proceedings against the assessee. CIT Vs. Shree Rajasthan Syntex Ltd.(2009) 313 ITR 231 (Raj.)SLP dismissed: (2009) 313 ITR (St.) 27 (SC) Sun Pharmaceutical Industries Lt. Vs. Dy. CIT (2016) 287 CTR (Del.) 621 (iii) Initiation is in very hyper mechanical manner, Under the facts and circumstances of the case the Ld. AO has grossly erred in initiating the section 147 as the initiation is based on the borrowed satisfaction therefore be…

SHRI.J M VRUSHABENDRAIAH ,HOSPET vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1 , BELLARY

The appeal of the assessee is partly allowed

ITA 299/BANG/2019[2010-11]Status: DisposedITAT Bangalore20 Jul 2022AY 2010-11

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2010-11

For Appellant: Shri Srihari Kutsa, A.RFor Respondent: Shri Narayana K.R., D.R
Section 147Section 148Section 153CSection 250

…n 148 was to be quashed and the consequential assessment was to be annulled. k. Reliance is also placed on the parity of reasoning laid down in the following decisions – (a) ACIT v. Dhariya Construction Co. 328 ITR 515 (SC) (b) CIT v. Shree Rajasthan Syntex 313 ITR 231 (Raj) [SLP dismissed] (c) ICICI Home Finance Co. Ltd., v. ACIT 2012-TIOL- 590-HC-MUM-IT (d) Mrs.Vinita Jain v. ITO 158 Taxman Magazine 167 (Del) Shri J.M. Vrushabendraiah, Hospete Page 25 of 58 (e) CIT v. Shardaben K Modi reported in [2013] 35 taxmann.com 264 (Gujarat) (f) Shree Chalthan Vibhag Khand v. Dy. CIT reported in [2015] 376 ITR 419 (G…

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CIT v. Shree Rajasthan Syntex Ltd. (313 ITR 231) — Cited in 55 Judgments | BharatTax