CWT v. Ramaraju Surgical Cotton Mills Ltd.

63 ITR 478Supreme Court of India1967#3491 most cited

What is CWT v. Ramaraju Surgical Cotton Mills Ltd. authority for?

A business is considered 'set up' only when it is ready to function and discharge its intended purpose, not merely when preparatory operations have begun. This readiness signifies the stage where the unit can commence functioning as a business or manufacturing organization.

34

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2013 to 2024.

Also referred to as

Ramaraju Surgical Cotton Mills Ltd. · 63 ITR 478 · setting up of business · business commencement · readiness to function · manufacturing organization · depreciation allowance · pre-operative expenses

Issues it is cited on

companyindiabusiness

Judgments citing CWT v. Ramaraju Surgical Cotton Mills Ltd.

ACIT, Circle-5(2), Kolkata vs. M/S Thiess Mines India Pvt. Ltd., Kolkata

In the result, this issue is adjudicated in favour of the assessee

ITA 2163/KOL/2016[2012-13]Status: DisposedITAT Kolkata09 Jan 2019AY 2012-13

Bench: Sri J. Sudhakar Reddy & Sri Aby T. Varkey)

Section 250

…ore actual business operation started on 1st October, 1995 and in view of judicial pronouncement of the Bombay High Court in Western India Vegetables Products Ltd. v. CIT [1954] 26 ITR 151 and Supreme Court in CWT v. Ramaraju Surgical Cotton Mills Ltd. [1967] 63 ITR 478 and Sarabhai Management Corpn. Ltd. v. CIT [1991] 192 ITR 151 (SC), the same should be disallowed as expenditure. We may only note that the Assessing Officer did not go into the factual matrix applicable to the assessee's case to find out the date of setting up of business. He simply took the date 1st October, 1995 i.e. as the date of start of the…

DCIT Cir 2(2)(1), Mumbai vs. L & T Mhi Boilers P.Ltd, Mumbai

Appeal stands dismissed

ITA 712/MUM/2016[2009-10]Status: DisposedITAT Mumbai07 Sept 2018AY 2009-10

Bench: Shri C.N. Prasad, Jm & Shri Manoj Kumar Aggarwal, Am आयकरअपीलसं./I.T.A. No.712/Mum/2016 (िनधा"रणवष" / Assessment Year:2009-10) Deputy Commissioner Of Income Tax L & T Mhi Boilers Private Limited 3Rd Floor, L & T House, N.M.Marg, Circle-2(2)(1) बनाम/ Room No.545, Aaykar Bhavan, Vs. Ballard Estate, Fort M.K.Road, Mumbai-400 020 Mumbai-400 098 "थायीलेखासं./जीआइआरसं./Pan/Gir No.Aabcl-2635-C (अपीलाथ"/Appellant) (""थ" / Respondent) : Revenue By : R.P.Meena, Ld.Cit Dr Assessee By : Vijay Mehta, Ld. Ar सुनवाई की तारीख/ : 10/07/2018 Date Of Hearing घोषणा की तारीख / : 07/09/2018 Date Of Pronouncement

For Appellant: Vijay Mehta, Ld. ARFor Respondent: R.P.Meena, Ld.CIT DR
Section 143(3)Section 14A

…t year's expenses or income has to be allowed. Now, it is to be examined whether the business was set-up in the case of the appellant. The term set-up was examined, set up was interpreted by Supreme Court in CWT vs. Ramaraju Surgical Cotton Mills Ltd. (1967) (63 ITR 478 SC) as "A unit cannot be said to have been set up unless it is ready to discharge the function for which it is being set up. It is only when the unit has been put into such a shape that it can start functioning as a business or a manufacturing organization that it can be said that the unit has been set up". Here from the above Supreme Court decisi…

M/S. Shristi Hotel Pvt. Ltd., Kolkata vs. DCIT, Circle - 8(2), Kolkata

In the result, the appeal of the assessee is allowed

ITA 395/KOL/2018[2012-13]Status: DisposedITAT Kolkata18 Jul 2018AY 2012-13

Bench: Shri P.M. Jagtap, Am & Shri A. T. Varkey, Jm]

Section 143(3)Section 57

…servations and finding made by the Ld. CIT(A) in his appellate order. He also reiterated the following judgments of the Hon’ble High Courts referred to by the Ld. CIT(A) in support of the revenue’s case: (a) CWT Vs. Ramaraju Surgical Cotton Mills Ltd. (1963) 63 ITR 478 (SC), (b) CIT Vs. Piem Hotel (P) Ltd. 73 Taxman 295, (c) CIT Vs. Industrial Solvents & Chemicals Pvt. Ltd. (1979) 119 ITR 608, (d) Ritz Continental Hotels Ltd. Vs. CIT 114 ITR 554. As regards the assessee’s alternate plea for netting off interest received against pre- commencement expenses, the Ld. DR submitted that such plea was never raised by t…

ITO 3(1)(4), Mumbai vs. G.E. Global Sourcing India P.Ltd, Mumbai

In the result appeal of the Revenue in I

ITA 4194/MUM/2016[2009-10]Status: DisposedITAT Mumbai09 Nov 2017AY 2009-10

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No. 4194/Mum/2016 (नििाारण वर्ा / Assessment Year : 2009-10)

For Appellant: NoneFor Respondent: Shri V. Vidyadhar
Section 271Section 271(1)(c)

…usiness as from 1st of September, 1946?" and we will answer that in the affirmative. No order as to costs.' The above decision of Hon'ble Bombay High Court was approved by Hon'ble Supreme Court in the case of CWT v. Ramaraju Surgical Cotton Mills Ltd. [1967] 63 ITR 478. In the instant case under appeal, the project for manufacturing and supplying of locomotives has not yet been set up , while only preparatory steps are taken by the assessee company by bidding for award of the contract by Rites Limited , Ministry of Railways in favour of the consortium partners which included assessee company also for setting up…

M/S. Mahanivesh (India) Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 5783/DEL/2014[2011-12]Status: DisposedITAT Delhi16 Dec 2016AY 2011-12
For Appellant: Sh. V. P. Gupta, AdvFor Respondent: Sh. F. R. Meena, Sr. DR
Section 10Section 143(1)

…the audit fee amounting to Rs.21,000/- and disallowed Rs.16,28,942/- claimed by the assessee on account of other expenses. The reliance was placed on the following case laws: 10 Mahanivesh (India) Pvt Ltd. " CWT Vs Ramaraju Surgical Cotton Mills Ltd. (1967) 63 ITR 478 (SC) " S.P.V. Bank Ltd. Vs CIT (1980) 126 ITR 773 (Kerala) " Perfect Pottery Ltd. Vs CIT 166 ITR 190 (MP) " Rani J. Sarla Devi Vs CIT 46 ITR 837 (AP) 13. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted as under: “1. As will be seen by the Hon'ble CIT(A) from the Profit & Loss Account, the appellant company during th…

Globex Energia P.Ltd, Mumbai vs. Asst CIT 6(3), Mumbai

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

ITA 1109/MUM/2014[2010-11]Status: DisposedITAT Mumbai18 Nov 2016AY 2010-11

Bench: Shri Amit Shukla & Shri Ashwani Tanejaassessment Year: 2010-11 Globex Energia P. Ltd. Acit 6(3) 4Th Floor, Sadhna House, 570 Mumbai- बनाम/ Pandurang Budhkar Marg, Vs. Behind Mahindra Towr, S. Worli Mumbai-400018 (Appellant) (Respondent ) P.A. No.Aadcg1161C Appellant By Shri Nishant Thakkar & Mis. Jasmin Amalsadvala (Ar) Revenue By Shri Prakash Mane (Dr) सुनवाई क" तार"ख/Date Of Hearing: 09/11/2016 18/11/2016 आदेश क" तार"ख /Date Of Order:

Section 143(1)Section 143(3)

…if commencement of business has not yet taken place: 1.CIT Vs. Ralliwolf Ltd. (121 ITR 262) (Bom) 2.Saurashtra Cement & Chemical Industries Ltd. (91 ITR 170) (Guj) 3.Western India Vegetable Products Ltd. (26 ITR 151) 4.Ramaraja Surgical Cottons Mills Ltd. (63 ITR 478) 5.CIT vs Whirlpool of India Ltd 318 ITR 347 (Delhi) In the case of CIT vs Sardar Sarovar Narmada Nigam Ltd 364 ITR 477 (Guj) it has been held that where business of the assessee consists of different categories, then company can be said to have set up its business from the date when one of categories of its business was started and all the reve…

ACIT 25(1), Mumbai vs. G Shoes Exports, Mumbai

In the result, the assessee’s appeal is partly allowed

ITA 6209/MUM/2014[2010-11]Status: DisposedITAT Mumbai24 Oct 2016AY 2010-11

Bench: Shri Sanjay Arora, Am & Shri Amarjit Singh, Jm आयकर अपील सं./I.T.A. No. 5736/Mum/2014 ("नधा"रण वष" / Assessment Year: 2010-11) G. Shoes Exports Asst. Cit-25(1)/Cit City 25 बनाम/ 2Nd Floor, Bandra Kurla Complex, 1, Hitex Industrial Estate, S. V. Road, Dahisar (E), Bandra (E), Mumbai-400 051 Vs. Mumbai-400 068 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aacfg 5376 P (Assessee) : (Revenue) & आयकर अपील सं./I.T.A. No. 6209/Mum/2014 ("नधा"रण वष" / Assessment Year: 2010-11) बनाम/ Asst. Cit-25(1), G. Shoes Exports Mumbai-400 051 Mumbai-400 068 Vs. (Revenue) : (Assessee) Assessee By : Shri Radheshyam Jain : Shri Airiju Jaikaran Revenue By सुनवाई क" तार"ख / : 24.06.2016 Date Of Hearing घोषणा क" तार"ख / : 24.10.2016 Date Of Pronouncement आदेश / O R D E R Per Sanjay Arora, A. M.: These Are Cross Appeals, I.E., By The Assessee & The Revenue, Directed Against The Order By The Commissioner Of Income Tax (Appeals)-35, Mumbai (‘Cit(A)’ For Short) Dated 16.7.2014, Partly Allowing The Assessee’S Appeal Contesting It’S Assessment U/S.143(3) Of The Income Tax Act, 1961 (‘The Act’ Hereinafter) For The Assessment Year (A.Y.) 2010-11 Vide Order Dated 20.3.2013. 2

For Appellant: Shri Radheshyam Jain
Section 143(3)Section 32(1)

…आयकर अपील"य अ"धकरण “जी” "यायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SANJAY ARORA, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं./I.T.A. No. 5736/Mum/2014 ("नधा"रण वष" / Assessment Year: 2010-11) G. Shoes Exports Asst. CIT-25(1)/CIT City 25 बनाम/ 2nd Floor, Bandra Kurla Complex, 1, Hitex Industrial Estate, S. V. Road, Dahisar (E), Bandra (E), Mumbai-400 051 Vs. Mumbai-400 068 "थायी लेखा सं./जीआइआर सं./PAN/GIR No. AACFG 5376 P (Assessee) : (Revenue) & आयकर अपील सं./I.T.A. No. 6209/Mum/2014 ("नधा"रण वष" / Assessment Year: 2010-11) बनाम/ Asst. CIT-25(1), G. Shoes Exports Mumbai-…

Wondervalue Realty Developers P.Ltd, Mumbai vs. ITO WD 5(3)(4), Mumbai

In the result, the assessee’s is allowed for statistical purposes

ITA 6059/MUM/2014[2010-11]Status: DisposedITAT Mumbai05 Oct 2016AY 2010-11

Bench: Shri Sanjay Arora, Am & Shri Amarjit Singh, Jm आयकर अपील सं./I.T.A. No. 6059/Mum/2014 ("नधा"रण वष" / Assessment Year: 2010-11) Wondervalue Realty Developers P. Ltd. Ito, Ward 5(3)(4), बनाम/ Aaykar Bhavan, 5Th Floor, 505, Ceejay House, Dr. Annie Besant Road, Worli, Mumbai-400 018 New Marine Lines, Mumbai Vs. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaacw 8249 C (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant By : Shri Mandar Vaidya ""यथ" क" ओर से/Respondent By : Shri Airiju Jaikaran

For Appellant: Shri Mandar VaidyaFor Respondent: Shri Airiju Jaikaran
Section 143(3)Section 56

…आयकर अपील"य अ"धकरण “जी” "यायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SANJAY ARORA, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं./I.T.A. No. 6059/Mum/2014 ("नधा"रण वष" / Assessment Year: 2010-11) Wondervalue Realty Developers P. Ltd. ITO, Ward 5(3)(4), बनाम/ Aaykar Bhavan, 5th Floor, 505, Ceejay House, Dr. Annie Besant Road, Worli, Mumbai-400 018 New Marine Lines, Mumbai Vs. "थायी लेखा सं./जीआइआर सं./PAN/GIR No. AAACW 8249 C (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant by : Shri Mandar Vaidya ""यथ" क" ओर से/Respondent by : Shri Airiju Jaikaran सुनव…

Ge Global Sourceing India P.Ltd, New Delhi vs. ITO RG 3(1)4, Mumbai

In the result, the appeal filed by the assessee company in ITA N0

ITA 4610/MUM/2013[2009-10]Status: DisposedITAT Mumbai13 Jun 2016AY 2009-10

Bench: Shri C.N. Prasad & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.4610/Mum/2013 ("नधा"रण वष" / Assessment Year : 2009-10) Ge Global Sourcing India Income Tax Officer – बनाम/ Private Limited, Range 3(1)(4), V. Aifcas Building, Aayakar Bhavan, 1 Rafi Marg, Mumbai – 400020. New Delhi – 11 0001. "थायी लेखा सं./Pan : Aabcg0865H (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

For Respondent: Shri S. Senthil Kumaran,DR
Section 143(3)Section 234B

…usiness as from 1st of September, 1946?" and we will answer that in the affirmative. No order as to costs.' The above decision of Hon'ble Bombay High Court was approved by Hon'ble Supreme Court in the case of CWT v. Ramaraju Surgical Cotton Mills Ltd. [1967] 63 ITR 478. In the instant case under appeal, the project for manufacturing and supplying of locomotives has not yet been set up , while only preparatory steps are taken by the assessee company by bidding for award of the contract by Rites Limited , Ministry of Railways in favour of the consortium partners which included assessee company also for setting up…

M/S. Mahle Holding (India) Pvt. Ltd., Gurgaon vs. ITO, New Delhi

In the result the appeal of the assessee is allowed

ITA 5553/DEL/2014[2011-12]Status: DisposedITAT Delhi23 Dec 2015AY 2011-12

Bench: Shri Vijay Pal Raomahale Holding (India) Pvt. Ito, Ltd., 207, 2Nd Floor, Iris Tech Ward-6(1), Vs. Park, Sohna Road, Sector-48, New Delhi Gurgaon Pan:Aagcm2208M (Assessee) (Respondent)

For Appellant: Sh. Rajan Bhatia, AdvFor Respondent: Dr. Anjula Jain, Sr. DR

…is clear that the business was set up from 1-11-1995, by which date the company was ready and in a position to commence its business." 7. The counsel for the revenue has relied upon the decision in the case of CWT v. Ramaraju Surgical Cotton Mills Ltd. [1967] 63 ITR 478 (SC) to canvass the proposition that it is only when actual business operation was commenced, a business is set up. We feel that the decision of the Supreme Court in Ramaraju Surgical Cotton Mills Ltd.’s case (supra) is not applicable to the facts of the present case because the said judgment was dealing with the provision of section 5(1)(xxi) of…

DCIT, Circle - 8, Kolkata vs. M/S. E.I.H. Ltd., Kolkata

In the result, the appeal of the revenue in ITA NO

ITA 2182/KOL/2006[2003-04]Status: DisposedITAT Kolkata09 Dec 2015AY 2003-04

Bench: : Shri M. Balaganesh

For Appellant: Shri R.N Bajoria, Sr.Advocate &For Respondent: Shri Rajat Subhra Biswas, ld.CIT/DR
Section 143(3)Section 195Section 40Section 9(1)(vii)

…ness could be charged off as revenue expenditure or not. We find that this issue has been elaborately dealt with in the following cases :- a) CIT vs Kanoria General Dealers P Ltd – (1986) 159 ITR 524 (Cal) b) CIT vs Ramaraju Surgical Cotton Mills Ltd (1967) 63 ITR 478 (SC) c) CIT vs Hughes Escorts Communications Ltd (2009) 311 ITR 253 (Del) d) CIT vs Relaxo Footwears Ltd (2007) 293 ITR 231 (Del) – SLP by revenue against this order dismissed. The special leave petition filed by the revenue against this order is dismissed by the Supreme Court in CC 12361 / 2007 dated 3.1.2008 . e) Delhi ITAT – 15 SOT 348 (Del…

Carefour Wc&C India Private Limited vs. Deputy Commissioner of Income Tax

ITA/42/2014HC Delhi22 Sept 2014
Section 260ASection 28Section 43D

…t was held that the word “set up” is equivalent to the word “establishment”, but operation for establishment cannot be equated with the establishment of the unit itself or its setting up. In another case namely, CWT vs Ramraju Surgical Cotton Mills Ltd. (63 ITR 478) it was held that a unit cannot be said to have been set up unless it is ready to discharge the function for which it has been set up. It is only when the unit has been put into such a shape that it can start functioning as a business or as a manufacturing organisation that it can be said that the unit has been set up. Operations for the est…

Commissioner of Income Tax vs. Samsung India Electronics Ltd

The appeal is dismissed with costs

ITA/131/2010HC Delhi09 Jul 2013
Section 260ASection 37

…10 Page 4 of 8 judicial pronouncement of the Bombay High Court in Western India Vegetables Products Ltd. Vs. CIT, (1954) 26 ITR 151 and Supreme Court in CWT Vs. Ramaraju Surgical Cotton Mills Ltd., (1967) 63 ITR 478 (SC) and Sarabhhai Managment Corporation Ltd. Vs. CIT, (1991) 192 ITR 151, the same should be disallowed as expenditure. We may only note that the Assessing Officer did not go into the factual matrix applicable to the assessee‟s case to find out the date of setting up of business. He simply took the date 1st October, 1995 i.e. as the date o…

Commissioner of Income Tax - II vs. M/s. Healthware Private Limited

ITTA/204/2013HC Telangana04 Jul 2013