Eastern Investments Ltd. v. CIT

The Commissioner of Income Tax vs. M/S Oracle India Pvt. Ltd

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

…e the carrying on the business, may yet be expended wholly and exclusively for the purposes of the trade.” The above test was quoted with approval and applied by the Supreme Court in the case of Eastern Investments Ltd. Vs. Commissioner of Income Tax, 20 ITR 1. 20. It is well-settled that it is not open to the Department to adopt a subjective standard of reasonableness and disallow a part of business expenditure as being unreasonably large, or decide what type of expenditure the assessee should incur and in what circumstances. This was so held by the Supreme Court in the case of Commissioner of In…

Commissioner of Income Tax vs. Bharti Televenture Ltd

…d in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case (supra) has been approved by this Court in several decisions e.g. Eastern Investments Ltd. vs. CIT (1951) 20 ITR 1, CIT vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 etc. In our opinion, the High Court as well as the Tribunal and other Income Tax authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest free loan was given to the sister company (whi…

Commissioner of Income Tax vs. Bharti Televenture Ltd

…d in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case (supra) has been approved by this Court in several decisions e.g. Eastern Investments Ltd. vs. CIT (1951) 20 ITR 1, CIT vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 etc. In our opinion, the High Court as well as the Tribunal and other Income Tax authorities should have approached the question of allowability of interest on the borrowed funds from the above angle. In other words, the High Court and other authorities should have enquired as to whether the interest free loan was given to the sister company (whi…

The Commissioner of Income Tax vs. Micromatic Machine Tools P.Ltd

Bench: HON'BLE MR. JUSTICE BADAR DURREZ AHMED,HON'BLE MR. JUSTICE V.K. JAIN

…d and serviced by the assessee-company. In any case, in the case before us, the Principals of the assessee-company have contributed more than 68% of the expenditure incurred on participation in the exhibition. 10. In CIT vs. Chandulal Keshavlal & Co.: 38 ITR 601, the assessee, which was the Managing Agent, getting commission under an agreement with the managed company, ITA No.587/2010 Page 8 of 9 had waived a portion of the commission payable to it. Upholding the part waiver of the commission, it was held by the Supreme Court that if the payment or the expenditure is incurred for the…

P.C.Bhandari & Co vs. Asstt. Commissioner of Income Tax

…t be stated that there would not be any expenditure incurred. Test of commercial expediency would be applicable to Section 57 (iii) as well as it applies to Section 37(1) as held by Supreme Court in Eastern Investments Ltd. vs. Commissioner of Income-tax, 20 ITR 1. In case it is found that the business had only been suspended in that particular year and 2009:DHC:5406-DB ITA No.1272/2008 Page 5 of 5 had not been closed down, then the aforesaid expenditure would be allowable as business expenditure. In such a case in the absence of any income under the head ‘business income’ it could b…