Eastern Investments Ltd. v. CIT

38 ITR 601Supreme Court of India1960#222 most cited

What is Eastern Investments Ltd. v. CIT authority for?

Expenditure must be commercially expedient for carrying on the business, and it is not for revenue authorities to dictate how an assessee should conduct its business. The court will not question the business expediency of a transaction, even if a third party also benefits.

346

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2006 to 2026.

Also referred to as

Eastern Investments Ltd. v. CIT · 38 ITR 601 · commercial expediency · business expediency · related party transaction · enduring benefit · business expenditure · prudent businessman · disallowance of interest expenditure

Sections most often in play

Section 143(3)Section 147Section 148Section 14ASection 37Section 234BSection 40A(2)(b)Section 37(1)

Issues it is cited on

interest on interestaccumulated profitssection 40a(2)(b)commercial expediencyrelated party transactionbusiness expediencysection 194jenduring benefitsection 40a(2)section 14a(2)disallowance of interest expendituresection 36(1)(vii)

Judgments citing Eastern Investments Ltd. v. CIT

Kalaignar Tv Pvt. Ltd., Chennai vs. ACIT Non Corporate Circle 20(1), Chennai

ITA 2443/CHNY/2018[2013-14]Status: DisposedITAT Chennai20 Jul 2022AY 2013-14

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. Nos. 2442, 2443 & 2444/Chny/2018 िनधा"रण वष"/Assessment Years: 2012-13, 2013-14 & 2014-15 Kalaignar Tv Pvt. Ltd., The Assistant Commissioner Of “Anna Arivalayam”, 367/369, Anna Vs. Income Tax, Salai, Teynampet, Chennai 600 018. Non Corporate Circle 20(1), [Pan:Aadck0898E] Chennai. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri Sandeep Bagmar, Advocate ""थ" की ओर से/Respondent By : Shri M. Swaminathan, Sr. Standing Counsel & Ms. Pushpa, Jr. Standing Counsel सुनवाई की तारीख/ Date Of Hearing : 11.05.2022 घोषणा की तारीख /Date Of Pronouncement : 20.07.2022 आदेश /O R D E R Per V. Durga Rao: These Three Appeals Filed By The Assessee Are Directed Against Separate Orders Of The Ld. Commissioner Of Income Tax (Appeals) 14, Chennai, All Dated 30.05.2018 Relevant To The Assessment Years 2012- 13, 2013-14 & 2014-15. Since The Facts Are Identical & Common Issue Has Been Raised, All The Appeals Were Heard Together & Being Disposed Off By This Common Order For The Sake Of Brevity. In The Assessment Year 2012-13, The Assessee Has Raised Following Grounds: “The Grounds Of Appeal Stated Hereunder Are Independent Of & Without Prejudice To One Another:

For Appellant: Shri Sandeep Bagmar, AdvocateFor Respondent: Shri M. Swaminathan, Sr. Standing Counsel
Section 37Section 37(1)

…31 (Cal) 12. Atlas Cycle Industries Ltd. v. CIT [1990] 181 ITR 18 (P&H) 13. Gujarat Agro Oil Enterprises Ltd. v. CIT [2002] 256 ITR 230 (Guj) 14. Hiranandani Akruti JV v. DCIT [2017] 88 taxmann.com 209 (Mumbai-Trib) 15. CIT v. Chandulal Keshavlal & Co. [19601 38 ITR 601 (SC) 16. Sree Meenakshi Mills Ltd. v. CIT [19671 63 ITR 207 (SC) 17. The Weavers Mills Ltd. v. Balkis Ammal & Ors AIR 1969 MAD 462 18. McKnight (Inspector of Taxes) v. Sheppard [1999] 1 WLR 1333 5. On the other hand, the ld. DR has submitted that as per section 37(1) of the Act, such eligible expenditure should not be in the nature of capital expe…

Seyad Agro Industries P Ltd, Tirunelveli vs. ACIT, Central Circle-1, Madurai

The appeals stands allowed

ITA 129/CHNY/2021[2017-18]Status: DisposedITAT Chennai13 Jul 2022AY 2017-18

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./ Ita No.126/Chny/2021 (िनधाBरण वषB / Assessment Year: 2014-15) & आयकर अपील सं./ Ita No.127/Chny/2021 (िनधाBरण वषB / Assessment Year: 2015-16) & आयकर अपील सं./ Ita No.128/Chny/2021 (िनधाBरण वषB / Assessment Year: 2016-17) & आयकर अपील सं./ Ita No.130/Chny/2021 (िनधाBरण वषB / Assessment Year: 2018-19) M/S. Seyad Trading Company Acit बनाम/ Survey No.338/3 House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Accfs-3027-M (अपीलाथ"/Appellant) : (""थ" / Respondent) & आयकर अपील सं./ Ita No.129/Chny/2021 (िनधाBरण वषB / Assessment Year: 2017-18) M/S. Seyad Agro Investment Pvt. Ltd. Acit बनाम/ 110E/20/7, House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Aamcs-4443-E (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ" की ओरसे/ Appellant By : Shri B. Ramakrishnan (F.C.A)-Ld. Ar ""थ" की ओरसे/Respondent By : Shri M. Rajan (Cit)-Ld. Dr

For Appellant: Shri B. Ramakrishnan (F.C.A)-Ld. ARFor Respondent: Shri M. Rajan (CIT)-Ld. DR
Section 132Section 132(4)Section 143(3)Section 153CSection 37(1)

…e assessee may have all the right to donate and to carry on charitable activity, however, the same could not be considered as business expenditure for the assessee. Reliance was placed on the decision of Hon'ble Apex Court in CIT v. Chandulal Keshavlal (1960; 38 ITR 601) and CIT v. Ashok Leyland Ltd. (1972; 86 ITR 549). The concept of diversion of income by overriding title would also be applicable. Finally, the stand of Ld. AO was upheld. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 5. Upon perusal of copy of sample invoice of SBC, as placed on record, we find that the se…

Seyad Trading Company, Tirunelveli vs. ACIT Central Circle-1, Madurai

The appeals stands allowed

ITA 128/CHNY/2021[2016-17]Status: DisposedITAT Chennai13 Jul 2022AY 2016-17

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./ Ita No.126/Chny/2021 (िनधाBरण वषB / Assessment Year: 2014-15) & आयकर अपील सं./ Ita No.127/Chny/2021 (िनधाBरण वषB / Assessment Year: 2015-16) & आयकर अपील सं./ Ita No.128/Chny/2021 (िनधाBरण वषB / Assessment Year: 2016-17) & आयकर अपील सं./ Ita No.130/Chny/2021 (िनधाBरण वषB / Assessment Year: 2018-19) M/S. Seyad Trading Company Acit बनाम/ Survey No.338/3 House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Accfs-3027-M (अपीलाथ"/Appellant) : (""थ" / Respondent) & आयकर अपील सं./ Ita No.129/Chny/2021 (िनधाBरण वषB / Assessment Year: 2017-18) M/S. Seyad Agro Investment Pvt. Ltd. Acit बनाम/ 110E/20/7, House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Aamcs-4443-E (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ" की ओरसे/ Appellant By : Shri B. Ramakrishnan (F.C.A)-Ld. Ar ""थ" की ओरसे/Respondent By : Shri M. Rajan (Cit)-Ld. Dr

For Appellant: Shri B. Ramakrishnan (F.C.A)-Ld. ARFor Respondent: Shri M. Rajan (CIT)-Ld. DR
Section 132Section 132(4)Section 143(3)Section 153CSection 37(1)

…e assessee may have all the right to donate and to carry on charitable activity, however, the same could not be considered as business expenditure for the assessee. Reliance was placed on the decision of Hon'ble Apex Court in CIT v. Chandulal Keshavlal (1960; 38 ITR 601) and CIT v. Ashok Leyland Ltd. (1972; 86 ITR 549). The concept of diversion of income by overriding title would also be applicable. Finally, the stand of Ld. AO was upheld. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 5. Upon perusal of copy of sample invoice of SBC, as placed on record, we find that the se…

Seyad Trading Company, Tirunelveli vs. ACIT, CC-1, Madurai

The appeals stands allowed

ITA 127/CHNY/2021[2015-16]Status: DisposedITAT Chennai13 Jul 2022AY 2015-16

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./ Ita No.126/Chny/2021 (िनधाBरण वषB / Assessment Year: 2014-15) & आयकर अपील सं./ Ita No.127/Chny/2021 (िनधाBरण वषB / Assessment Year: 2015-16) & आयकर अपील सं./ Ita No.128/Chny/2021 (िनधाBरण वषB / Assessment Year: 2016-17) & आयकर अपील सं./ Ita No.130/Chny/2021 (िनधाBरण वषB / Assessment Year: 2018-19) M/S. Seyad Trading Company Acit बनाम/ Survey No.338/3 House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Accfs-3027-M (अपीलाथ"/Appellant) : (""थ" / Respondent) & आयकर अपील सं./ Ita No.129/Chny/2021 (िनधाBरण वषB / Assessment Year: 2017-18) M/S. Seyad Agro Investment Pvt. Ltd. Acit बनाम/ 110E/20/7, House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Aamcs-4443-E (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ" की ओरसे/ Appellant By : Shri B. Ramakrishnan (F.C.A)-Ld. Ar ""थ" की ओरसे/Respondent By : Shri M. Rajan (Cit)-Ld. Dr

For Appellant: Shri B. Ramakrishnan (F.C.A)-Ld. ARFor Respondent: Shri M. Rajan (CIT)-Ld. DR
Section 132Section 132(4)Section 143(3)Section 153CSection 37(1)

…e assessee may have all the right to donate and to carry on charitable activity, however, the same could not be considered as business expenditure for the assessee. Reliance was placed on the decision of Hon'ble Apex Court in CIT v. Chandulal Keshavlal (1960; 38 ITR 601) and CIT v. Ashok Leyland Ltd. (1972; 86 ITR 549). The concept of diversion of income by overriding title would also be applicable. Finally, the stand of Ld. AO was upheld. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 5. Upon perusal of copy of sample invoice of SBC, as placed on record, we find that the se…

Seyad Trading Company, Tirunelveli vs. ACIT, CC-1, Madurai

The appeals stands allowed

ITA 126/CHNY/2021[2014-15]Status: DisposedITAT Chennai13 Jul 2022AY 2014-15

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./ Ita No.126/Chny/2021 (िनधाBरण वषB / Assessment Year: 2014-15) & आयकर अपील सं./ Ita No.127/Chny/2021 (िनधाBरण वषB / Assessment Year: 2015-16) & आयकर अपील सं./ Ita No.128/Chny/2021 (िनधाBरण वषB / Assessment Year: 2016-17) & आयकर अपील सं./ Ita No.130/Chny/2021 (िनधाBरण वषB / Assessment Year: 2018-19) M/S. Seyad Trading Company Acit बनाम/ Survey No.338/3 House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Accfs-3027-M (अपीलाथ"/Appellant) : (""थ" / Respondent) & आयकर अपील सं./ Ita No.129/Chny/2021 (िनधाBरण वषB / Assessment Year: 2017-18) M/S. Seyad Agro Investment Pvt. Ltd. Acit बनाम/ 110E/20/7, House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Aamcs-4443-E (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ" की ओरसे/ Appellant By : Shri B. Ramakrishnan (F.C.A)-Ld. Ar ""थ" की ओरसे/Respondent By : Shri M. Rajan (Cit)-Ld. Dr

For Appellant: Shri B. Ramakrishnan (F.C.A)-Ld. ARFor Respondent: Shri M. Rajan (CIT)-Ld. DR
Section 132Section 132(4)Section 143(3)Section 153CSection 37(1)

…e assessee may have all the right to donate and to carry on charitable activity, however, the same could not be considered as business expenditure for the assessee. Reliance was placed on the decision of Hon'ble Apex Court in CIT v. Chandulal Keshavlal (1960; 38 ITR 601) and CIT v. Ashok Leyland Ltd. (1972; 86 ITR 549). The concept of diversion of income by overriding title would also be applicable. Finally, the stand of Ld. AO was upheld. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 5. Upon perusal of copy of sample invoice of SBC, as placed on record, we find that the se…

Seyad Trading Company, Tirunelveli vs. ACIT Central Circle-1, Madurai

The appeals stands allowed

ITA 130/CHNY/2021[2018-19]Status: DisposedITAT Chennai13 Jul 2022AY 2018-19

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकर अपील सं./ Ita No.126/Chny/2021 (िनधाBरण वषB / Assessment Year: 2014-15) & आयकर अपील सं./ Ita No.127/Chny/2021 (िनधाBरण वषB / Assessment Year: 2015-16) & आयकर अपील सं./ Ita No.128/Chny/2021 (िनधाBरण वषB / Assessment Year: 2016-17) & आयकर अपील सं./ Ita No.130/Chny/2021 (िनधाBरण वषB / Assessment Year: 2018-19) M/S. Seyad Trading Company Acit बनाम/ Survey No.338/3 House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Accfs-3027-M (अपीलाथ"/Appellant) : (""थ" / Respondent) & आयकर अपील सं./ Ita No.129/Chny/2021 (िनधाBरण वषB / Assessment Year: 2017-18) M/S. Seyad Agro Investment Pvt. Ltd. Acit बनाम/ 110E/20/7, House Of Seyad Central Circle-1 North Bye-Pass Road, Vs. Madurai. Vannarpettai, Tirunvelveli – 627 003. "थायी लेखा सं./जीआइ आर सं./Pan/Gir No. Aamcs-4443-E (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ" की ओरसे/ Appellant By : Shri B. Ramakrishnan (F.C.A)-Ld. Ar ""थ" की ओरसे/Respondent By : Shri M. Rajan (Cit)-Ld. Dr

For Appellant: Shri B. Ramakrishnan (F.C.A)-Ld. ARFor Respondent: Shri M. Rajan (CIT)-Ld. DR
Section 132Section 132(4)Section 143(3)Section 153CSection 37(1)

…e assessee may have all the right to donate and to carry on charitable activity, however, the same could not be considered as business expenditure for the assessee. Reliance was placed on the decision of Hon'ble Apex Court in CIT v. Chandulal Keshavlal (1960; 38 ITR 601) and CIT v. Ashok Leyland Ltd. (1972; 86 ITR 549). The concept of diversion of income by overriding title would also be applicable. Finally, the stand of Ld. AO was upheld. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 5. Upon perusal of copy of sample invoice of SBC, as placed on record, we find that the se…

Lakshmi Shankar Gumudavelli, Hyderabad vs. Income Tax Officer, Ward-17(4), Hyderabad

In the result, ITA No. 144/Hyd/2020 filed by the assessee is allowed, whereas ITA No

ITA 148/HYD/2020[2016-17]Status: DisposedITAT Hyderabad30 Jun 2022AY 2016-17

Bench: Shri Rama Kanta Panda

For Appellant: Shri A.V.Raghuram, AdvocateFor Respondent: Shri Dinesh Paruchuri, Sr.AR
Section 143(3)Section 154

…om the firm in absence of any profit, the provisions of section 36 are not such that the expenditure could be allowed only when there is income. 7. Referring to the decision of Hon’ble Supreme Court in the case of Eastern Investments Ltd. vs. CIT reported in 20 ITR 1, he submitted that the Hon’ble Supreme Court in the said decision has held that the expenditure is allowable, even when there is no income. He accordingly submitted that this is a debatable issue and therefore, debatable issues cannot be rectified u/s. 154 of the I.T.Act. 8. Referring to the decision of the Bangalore Bench of the Tribunal in the ca…

Lakshmi Shankar Gumudavelli, Hyderabad vs. Income Tax Officer, Ward-17(4), Hyderabad

In the result, ITA No. 144/Hyd/2020 filed by the assessee is allowed, whereas ITA No

ITA 144/HYD/2020[2014-15]Status: DisposedITAT Hyderabad30 Jun 2022AY 2014-15

Bench: Shri Rama Kanta Panda

For Appellant: Shri A.V.Raghuram, AdvocateFor Respondent: Shri Dinesh Paruchuri, Sr.AR
Section 143(3)Section 154

…om the firm in absence of any profit, the provisions of section 36 are not such that the expenditure could be allowed only when there is income. 7. Referring to the decision of Hon’ble Supreme Court in the case of Eastern Investments Ltd. vs. CIT reported in 20 ITR 1, he submitted that the Hon’ble Supreme Court in the said decision has held that the expenditure is allowable, even when there is no income. He accordingly submitted that this is a debatable issue and therefore, debatable issues cannot be rectified u/s. 154 of the I.T.Act. 8. Referring to the decision of the Bangalore Bench of the Tribunal in the ca…

M/S. the Sandur Manganese & Iron Ores Ltd, Sandur vs. Assistant Commissioner of Income Tax, Circle-1, Bellary

In the result, both the appeals filed by the assessee stands partly allowed

ITA 1965/BANG/2018[2015-16]Status: DisposedITAT Bangalore29 Jun 2022AY 2015-16

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri S. Parthasarathi
Section 37(1)

…ot accept the submissions of the assessee on the ground that the assessee failed to establish that expenditure was incurred wholly and exclusively for the purpose of business. Inter alia, the AO relied upon decision in CIT Vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC) and distinguished the decision relied upon by the assessee in CIT Vs. Kamal and Co. 203 ITR 1038(Raj.). 14. On appeal, the Id. CIT(A) upheld the disallowance, holding as under:- "6.1 I have carefully considered the assessment order and the submission made by the learned AR. The payments of '5 . 0 lacs is towards the building fund of FIMI i.e.…

M/S. the Sandur Manganese & Iron Ores Ltd, Sandur vs. Assistant Commissioner of Income Tax, Circle-1, Bellary

In the result, both the appeals filed by the assessee stands partly allowed

ITA 1964/BANG/2018[2012-13]Status: DisposedITAT Bangalore29 Jun 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri S. Parthasarathi
Section 37(1)

…ot accept the submissions of the assessee on the ground that the assessee failed to establish that expenditure was incurred wholly and exclusively for the purpose of business. Inter alia, the AO relied upon decision in CIT Vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC) and distinguished the decision relied upon by the assessee in CIT Vs. Kamal and Co. 203 ITR 1038(Raj.). 14. On appeal, the Id. CIT(A) upheld the disallowance, holding as under:- "6.1 I have carefully considered the assessment order and the submission made by the learned AR. The payments of '5 . 0 lacs is towards the building fund of FIMI i.e.…

M/S. Nicholas Piramal India Ltd, Mumbai vs. The ACIT Cur 7(1)

In the result, the appeal filed by the revenue is dismissed and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 769/MUM/2008[2004-2005]Status: DisposedITAT Mumbai28 Jun 2022AY 2004-2005

Bench: Shri Pavan Kumar Gadale & Shri S Rifaur Rahmanpiramal Enterprises Ltd Vs. Acit, Circle – 7(1) (Formerly Known As Aayakar Bhavan Piramal Healthcare Ltd) Mumbai – 400020. (Before Known As Nicholas Piramal Ind) Piramal Tower, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400013. Pan/Gir No. : Aaacn4538P Appellant .. Respondent Dcit, Circle – 7(1) Vs. Piramal Enterprises Ltd Aayakar Bhyavan (Formerly Known As Mumbai – 400 020. Piramal Healthcare Ltd) (Before Known As Nicholas Piramal Ind) Piramal Tower, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400 013. Pan/Gir No. : Aaacn4538P Assessee By : Mr.Ronak Doshi & Ms.Manshi Padhiyar.Ar Revenue By : Mr.S.N.Kabra.Dr

For Appellant: Mr.Ronak Doshi &For Respondent: Mr.S.N.Kabra.DR
Section 143(3)Section 145Section 32Section 35Section 80

…grounds of commercial expediency and in order to indirectly to facilitate the carrying on the business. The above test in Atherton's case [1925] 10 TC 155 (HL) has been approved by this court in several decisions, e.g. Eastern Investments Ltd. Vs. CIT [1951] 20 ITR 1, CIT Vs. Chandulal Keshavlal and Co. [1960] 38 ITR 2 601 etc. 26. The expression "Commercial expediency" is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation but yet it is allowable as a business ITA No. 769 &…

M/S. Devaraj Urs Educational Trust for Backward Classes (Regd), Kolar vs. Principal Commissioner of Income Tax (Central), Bangalore

In the result, appeal filed by the assessee is allowed

ITA 155/BANG/2022[2020-21]Status: DisposedITAT Bangalore08 Jun 2022AY 2020-21

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: Na

For Appellant: Sri Ramasubramaniyan, A.RFor Respondent: Sri Pradeep Kumar, D.R
Section 11Section 12ASection 132Section 143(2)Section 143(3)Section 153A

…donations made by the appellant. The only point of debate is satisfaction of condition stipulated in (d) supra. The expression “wholly and exclusively for the purpose of business” has been judicially interpreted. 335. In CIT v. Chandulal Keshavlal & Co.[1960] 38 ITR 601 (SC), the Hon’ble Supreme Court held that in deciding whether a payment of money is a deductible expenditure one has to take into consideration question of commercial expediency and principles of ordinary commercial trading. If the payment or expenditure is incurred for the purpose of the trade of the assessee, it does not matter that the payment…

M/S Xindia Steels Limited, Koppal vs. The Assistant Commissioner of Income Tax Circle-1, Bellary

In the result, the appeal by the assessee is allowed

ITA 361/BANG/2019[2014-15]Status: DisposedITAT Bangalore31 May 2022AY 2014-15

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2014-15

For Appellant: Smt. Soumya K., AdvocateFor Respondent: Shri Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru
Section 143

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESEIDENT AND SHRI PADMAVATHY S, ACCOUNTANT MEMBER Assessment year : 2014-15 XINDIA Steels Ltd., Vs. The Assistant Commissioner Kunikere & Hirebaginal of Income Tax, Village, Circle 1, Ginigera, Bellary. Koppal Tq. & Dist. PAN: AAACX 0521A ASSESSEE RESPONDENT Assessee by : Smt. Soumya K., Advocate Respondent by : Shri Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru. Date of hearing : 26.05.2022 Date of Pronouncement : 31.05.2022 O R D E R Per Padmavathy S., Accountant Member This appeal is at the instance of the asse dir…

DCIT vs. M/S Fiza Developers & Infrastructer Pvt. Ltd

In the result, all the miscellaneous petitions are allowed

ITA 985/BANG/2013[2007-08]Status: DisposedITAT Bangalore13 May 2022AY 2007-08

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri T.N. Prakash, Addl.CIT(DR)(ITAT), Bengaluru
Section 263Section 54FSection 57

…mining the claim, the incongruities and hardship caused, cannot obviously blur our approach. From this it necessarily follows that the conclusions of the ITO concurred with by the Commissioner are unexceptionable. 13. In Eastern Investments Ltd. v. CIT [1951] 20 ITR 1 (SC) that interpreted section 12(2) which is the leading case on the point and around which a volume of case law has grown and which were all relied on, by Shri Sarangan the facts in brief were these: Eastern Investments Ltd. an investment company under an arrangement with one of its major shareholder reduced its share capital and issued him debentu…

Highgrace Investments P. Ltd., Hyd, Hyderabad vs. ACIT, Central Circle-8, Hyd, Hyderabad

Appeals are allowed in above terms

ITA 635/HYD/2015[2008-09]Status: DisposedITAT Hyderabad13 Apr 2022AY 2008-09

Bench: Shri S.S. Godara & Shri L. P. Sahu

For Respondent: Shri T. Sunil Goutam. (D.R.)
Section 143(3)Section 37(1)Section 40A(2)(a)

…ure has to be adjudged from the point of view of the businessman and not of the revenue (Jamshedpur Motor Accessories Stores Vs. CIT (1974) 95 ITR 664 (Pat); J.K. Woollen Manufacturers Vs CIT (1969) 72 ITR 612 (SC). In CIT Vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC), it was held by the SC that in deciding whether a payment of money is a deductible expenditure, one has to take into consideration questions of commercial expediency and the principles of ordinary commercial trading. 10.1. The Co-ordinate Bench in the case of Coca Cola India (P) Ltd., Vs. DCIT [116 TTJ 880], [ITAT (Pune)] has considered the p…

Highgrace Investments P. Ltd., Hyd, Hyderabad vs. ACIT, Central Circle-8, Hyd, Hyderabad

Appeals are allowed in above terms

ITA 634/HYD/2015[2007-08]Status: DisposedITAT Hyderabad13 Apr 2022AY 2007-08

Bench: Shri S.S. Godara & Shri L. P. Sahu

For Respondent: Shri T. Sunil Goutam. (D.R.)
Section 143(3)Section 37(1)Section 40A(2)(a)

…ure has to be adjudged from the point of view of the businessman and not of the revenue (Jamshedpur Motor Accessories Stores Vs. CIT (1974) 95 ITR 664 (Pat); J.K. Woollen Manufacturers Vs CIT (1969) 72 ITR 612 (SC). In CIT Vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC), it was held by the SC that in deciding whether a payment of money is a deductible expenditure, one has to take into consideration questions of commercial expediency and the principles of ordinary commercial trading. 10.1. The Co-ordinate Bench in the case of Coca Cola India (P) Ltd., Vs. DCIT [116 TTJ 880], [ITAT (Pune)] has considered the p…

Elem Investments P. Ltd., Hyd, Hyderabad vs. ACIT, Central Circle-8, Hyd, Hyderabad

Appeals are allowed in above terms

ITA 624/HYD/2015[2007-08]Status: DisposedITAT Hyderabad13 Apr 2022AY 2007-08

Bench: Shri S.S. Godara & Shri L. P. Sahu

For Respondent: Shri T. Sunil Goutam. (D.R.)
Section 143(3)Section 37(1)Section 40A(2)(a)

…ure has to be adjudged from the point of view of the businessman and not of the revenue (Jamshedpur Motor Accessories Stores Vs. CIT (1974) 95 ITR 664 (Pat); J.K. Woollen Manufacturers Vs CIT (1969) 72 ITR 612 (SC). In CIT Vs. Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC), it was held by the SC that in deciding whether a payment of money is a deductible expenditure, one has to take into consideration questions of commercial expediency and the principles of ordinary commercial trading. 10.1. The Co-ordinate Bench in the case of Coca Cola India (P) Ltd., Vs. DCIT [116 TTJ 880], [ITAT (Pune)] has considered the p…

M/S. United Spirits Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bengaluru

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

ITA 2701/BANG/2017[2013-14]Status: DisposedITAT Bangalore04 Apr 2022AY 2013-14

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.2701/Bang/2017 : Asst.Year 2013-2014 M/S.United Spirits Limited The Deputy Commissioner Of Ub Towers, Income-Tax, Circle 7(1)(1) V. No.24 Vittal Mallya Road Bangalore. Bangalore – 560 001. Pan : Aaccm8043J. (Appellant) (Respondent) Appellant By : Sri.Percy Pardiwala, Senior Advocate Respondent By : Sri.Pradeep Kumar, Cit-Dr Date Of Pronouncement : 05.04.2022 Date Of Hearing : 24.03.2022 O R D E R Per George George K, Jm : This Appeal At The Instance Of The Assessee Is Directed Against Final Assessment Order Dated 12.10.2017 Passed U/S 143(3) R.W.S. 144C(13) Of The I.T.Act. The Relevant Assessment Year Is 2013-2014. 2. The Brief Facts Of The Case Are As Follows: The Assessee Is A Company Engaged In The Manufacture & Sale Of Alcoholic Beverage. The Assessee Filed Its Return Of Income For The Assessment Year 2013-2014 On 28.11.2013 Which Was Selected For Scrutiny Assessment. During The Course Of Assessment, The Assessee’S Case Was Also Referred To The Transfer Pricing Officer (Tpo). The Tpo Vide Order Dated 26.10.2016, Recommended Transfer Pricing Adjustments. The A.O., Thereafter, Passed A Draft Assessment Order Dated 30.12.2016. 2 It(Tp)A No.2701/Bang/2017 M/S.United Spirits Limited.

For Appellant: Sri.Percy Pardiwala, Senior AdvocateFor Respondent: Sri.Pradeep Kumar, CIT-DR
Section 143(3)Section 14ASection 234BSection 234CSection 36(1)(iii)

…person or entity cannot be a bar for allowance of expenditure under section 37 of the Act, as per the settled position of law. Reference in this regard was made to the decisions of the Hon'ble Supreme Court of India in CIT vs. Chandulal Keshavlal & Co. [1960] 38 ITR 601 (SC), Sasson J. David and Co. P. Ltd vs. CIT 118 ITR 261(SC) and SA Builders Ltd. vs. CIT 288 ITR 1(SC). He further submitted that the Revenue cannot step into the shoes of an assessee to determine the commercial expediency of an expenditure incurred by it. 90. On the other hand, the learned DR relied upon the order of the AO and the DRP in suppor…

Reliance Industries Ltd, Mumbai vs. Deputy Commissioner of Income Tax Large Taxpayer Unit-2, Mumbai

In the result, the ITA No

ITA 2876/MUM/2019[2015-16]Status: DisposedITAT Mumbai08 Mar 2022AY 2015-16
Section 143(3)Section 28

…ITA Nos.1645 & 2876/Mum/2019 ITA Nos.2344 & 3945/Mum/2019 Assessment Years: 2014-15 & 2015-16 Page 1 of 105 INCOME TAX APPELLATE TRIBUNAL MUMBAI ‗J‘ BENCH, MUMBAI [Coram: Pramod Kumar (Vice President) and Amarjit Singh (Judicial Member)] ITA Nos.2344 & 3945/Mum/2019 Assessment Years: 2014-15 & 2015-16 Deputy Commissioner of Income Unit (LTU-2) Mumbai. ………………….. Appellant Vs. Reliance Industries Limited ………………….. Respondent 3rd Floor, Maker Chamber-IV, 222, Nariman Point, Mumbai 400021 [PAN: AAACR5055K] ITA Nos.1645 & 2876/Mum/2019 Assessment Years: 2014-15 & 2015-16 Reliance Industries Limited ………………….. Appell…

DCIT (Ltu)-2, Mumbai vs. M/S Reliance Industries Ltd., Mumbai

In the result, the ITA No

ITA 2344/MUM/2019[2014-15]Status: DisposedITAT Mumbai08 Mar 2022AY 2014-15
Section 143(3)Section 28

…ITA Nos.1645 & 2876/Mum/2019 ITA Nos.2344 & 3945/Mum/2019 Assessment Years: 2014-15 & 2015-16 Page 1 of 105 INCOME TAX APPELLATE TRIBUNAL MUMBAI ‗J‘ BENCH, MUMBAI [Coram: Pramod Kumar (Vice President) and Amarjit Singh (Judicial Member)] ITA Nos.2344 & 3945/Mum/2019 Assessment Years: 2014-15 & 2015-16 Deputy Commissioner of Income Unit (LTU-2) Mumbai. ………………….. Appellant Vs. Reliance Industries Limited ………………….. Respondent 3rd Floor, Maker Chamber-IV, 222, Nariman Point, Mumbai 400021 [PAN: AAACR5055K] ITA Nos.1645 & 2876/Mum/2019 Assessment Years: 2014-15 & 2015-16 Reliance Industries Limited ………………….. Appell…