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

Reliance Industries Limited, Mumbai vs. ACIT, Mumbai

In the result, the ITA No

ITA 1645/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…

Arjun M Ranga, Mysuru vs. Principal Commissioner of Income Tax (Central), Bengaluru

In the result, the appeal of the assessee is dismissed

ITA 692/BANG/2021[2016-17]Status: DisposedITAT Bangalore14 Feb 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 143Section 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…

Guru Pavan Ranga, Mysuru vs. Principal Commissioner of Income Tax, (Central), Bangalore

In the result, both the appeals of the assessees are dismissed

ITA 677/BANG/2021[2016-17]Status: DisposedITAT Bangalore14 Feb 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 143Section 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 ITA Nos.676 & 677/Bang/2021 Page 18 of 22 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 reduc…

Anirudh Murthy Ranga, Mysuru vs. Principal Commissioner of Income Tax, (Central), Bengaluru

In the result, both the appeals of the assessees are dismissed

ITA 676/BANG/2021[2016-17]Status: DisposedITAT Bangalore14 Feb 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 143Section 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 ITA Nos.676 & 677/Bang/2021 Page 18 of 22 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 reduc…

Ratna Commercial Enterprises Pvt. Ltd., New Delhi vs. Addl.CIT, Range-21, New Delhi

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

ITA 2086/DEL/2018[2014-15]Status: DisposedITAT Delhi28 Jan 2022AY 2014-15

Bench: Shri R.K. Panda & Shri Amit Shuklaassessment Year: 2014-15 Ratna Commercial Enterprises Pvt. Vs Addl. Cit, Ltd., Range-21, 4Th Floor, Punjabi Bhawan, New Delhi. 10, Rouse Avenue, New Delhi. Pan: Aaacr0354B (Appellant) (Respondent) Assessee By : Shri M.P. Rastogi, Advocate Revenue By : Shri N.K. Bansal, Sr. Dr Date Of Hearing : 29.11.2021 Date Of Pronouncement : 28.01.2022 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 23Rd January, 2018 Of The Cit(A)-7, New Delhi, Relating To Assessment Year 2014-15. 2. The Grounds Of Appeal No. 1 & 2 Raised By The Assessee Are As Under:- “1. That Both The Ld. Cit(A) & Ld. Ao Erred In Law & In Facts In Disallowance Of Rs.1,08,69,547/- U/S 14A In A Mechanical Way Without Appreciating The Facts That The Assessee Himself Has Disallowed Rs 2.41 Lakhs & That There Cannot Be Any Further Disallowance U/S 14A Without A Cogent Reason. 2. That Both The Ld. Cit(A) & Ld. Ao Erred In Law & In Facts In Appreciating That Strategic Investments In Dabur India Limited As The Promoter Shareholder, Would Not Form Part Of Disallowance U/S 14A.”

For Appellant: Shri M.P. Rastogi, AdvocateFor Respondent: Shri N.K. Bansal, Sr. DR
Section 14A

…d in Section 37 does not mean 12 necessarily and if the expenses have been incurred voluntarily and for the purpose of business, the same has to be allowed. Referring to the decision of the Hon’ble Supreme Court in the case Eastern Investment Ltd. vs. CIT in 20 ITR 1, he submitted that the Hon’ble Supreme Court has held that in order to prove the expenses allowable, it is not necessary to show that the expenditure was a profitable one or that any profit was earned. It is enough that the money was expended “not of necessity” and with a view to a direct and immediate benefit to that trade, but voluntarily and on t…

Madanlal Mulchandas Jariwala, Surat vs. Income Tax Officer, Ward-2(2)(3), Surat

In the result, appeal filed by the assessee is allowed

ITA 388/SRT/2019[2015-16]Status: DisposedITAT Surat20 Jan 2022AY 2015-16

Bench: Shri Pawan Singh, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.388/Srt/2019 (िनधा"रणवष" / Assessment Years: (2015-16) (Virtual Court Hearing) Madanlal Mulchandas Jariwala, Vs. The Ito, Ward-2(2)(3), 4512, Ganchisheri Begampura, Surat. Surat-395003. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Abbpj5168J (Assessee) (Respondent) Assessee By:Shri Mehul R. Shah, Ca Revenue By:Ms Anupama Singla, Sr. Dr सुनवाईक"तारीख/ Date Of Hearing : 18/11/2021 घोषणाक"तारीख/Date Of Pronouncement : 21/01/2022 आदेश / O R D E R Per Dr. A. L. Saini: Captioned Appeal Filed By The Assessee, Pertaining To Assessment Year (Ay) 2015-16, Is Directed Against The Order Passed By The Learned Commissioner Of Income Tax (Appeals)-1,Surat [In Short “The Ld. Cit(A)”] In Appeal No. Cit(A), Surat-1/10530/2017-18 Dated 18.07.2019, Which In Turn Arises Out Of An Order Passed By The Assessing Officer Under Section143(3)Of The Income Tax Act, 1961 [Hereinafter Referred To As The “Act”].

For Appellant: Shri Mehul R. Shah, CAFor Respondent: Ms Anupama Singla, Sr. DR
Section 143(3)Section 44ASection 57

…clusion that to bring a case within the section, it is not necessary that any income should in fact have been earned as a result of the expenditure. It may be pointed out that an identical view was taken by this court in Eastern Investments Ltd. v. CIT [1951] 20 ITR 1 , 4 (SC), where interpreting the corresponding provision in s. 12(2) of the Indian I.T. Act, 1922, which was ipsissima verba in the same terms as s. 57(iii), Bose J., speaking on behalf of the court, observed: "It is not necessary to show that the expenditure was a profitable one or that in fact any profit was earned." It is indeed difficult to see…

Gbt India Private Limited, Delhi vs. National E-Assesment Centre, New Delhi

In the result, the appeal of the assessee is allowed and Stay application is accordingly held to be infructuous

ITA 462/DEL/2021[2016-17]Status: DisposedITAT Delhi06 Jan 2022AY 2016-17

Bench: Shri G.S. Pannu & Shri Amit Shukla(Through Video Conferencing)

For Appellant: Shri Himanshu Sinha, Adv. &For Respondent: Shri Surendra Pal
Section 143(3)Section 144C(13)

…te to the assessee as to how he should conduct his business and it is not for them to tell the assessee as to what expenditure the assessee can incur. We may refer to a few of these authorities to elucidate the point. In Eastern Investment Ltd. v. CIT, (1951) 20 ITR 1, it was held by the Supreme Court that “there are usually many ways in which a given thing can be brought about in business circles but it is not for the Court to decide which of them should have been employed when the Court is deciding a question under section 12(2) of the Income-tax Act". It was further held in this case that "it is not necessary…

M/S Kumaraswamy Mineral Export Pvt. Ltd., Bengaluru vs. Joint Commissioner of Income Tax Bellary Range, Bellary

In the result, the appeal of the assessee stands allowed

ITA 1654/BANG/2018[2011-12]Status: DisposedITAT Bangalore04 Jan 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2011-12 M/S. Kumaraswamy Mineral Exports Pvt. Ltd., [For & On Behalf Of The Joint Erstwhile Partnership Commissioner Of Firm M/S. Kumaraswamy Income Tax, Mineral Exports], Bellary Range, No. 58, Cunningham Vs. Bellary. Road Cross, Bangalore – 560 052. Pan: Aabfk8539K Appellant Respondent : Shri S.V. Ravishankar, Assessee By Advocate : Shri Sumer Singh Meena, Revenue By Cit Dr(Osd) Date Of Hearing : 21-12-2021 Date Of Pronouncement : 04-01-2022 Order Per Beena Pillaipresent Appeal Has Been Filed By Assessee Against The Order Dated 22/03/2018 Passed By Ld.Cit(A), Gulbarga For Assessment Year 2011-12 On Following Grounds Of Appeal: “1. The Order Passed By The Learned Commissioner Of Income-Tax [Appeals]-4, Bengaluru Dated 22/03/2018 & The Order Of Assessment Passed By The Learned Assessing Officer Under Section 143 [3] Of The Act Dated 28/03/2014, In So Far As It Is Against The Appellant, Is Opposed To The Law, Weight Of Evidence, Probabilities, Facts & Circumstances In The Appellant'S Case.

For Respondent: Shri S.V. Ravishankar
Section 143Section 14ASection 234Section 37

…IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE BEFORE SHRI. CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER Assessment Year : 2011-12 M/s. Kumaraswamy Mineral Exports Pvt. Ltd., [For and on behalf of The Joint erstwhile Partnership Commissioner of Firm M/s. Kumaraswamy Income Tax, Mineral Exports], Bellary Range, No. 58, Cunningham Vs. Bellary. Road Cross, Bangalore – 560 052. PAN: AABFK8539K APPELLANT RESPONDENT : Shri S.V. Ravishankar, Assessee by Advocate : Shri Sumer Singh Meena, Revenue by CIT DR(OSD) Date of Hearing : 21-12-2021 Date of Pronouncement : 04-01-2022 ORDER…

Hitachi Metglas (India) Pvt. Ltd., New Delhi vs. DCIT, Circle- 11(2), New Delhi

In the result, the appeal filed by the assessee in ITA No

ITA 5906/DEL/2017[2010-11]Status: DisposedITAT Delhi11 Nov 2021AY 2010-11

Bench: Shri N.K. Billaiya & Shri Kuldip Singh[A.Y 2010-11]

For Appellant: Shri Saleel Kapoor, AdvFor Respondent: Shri Pradeep Kumar Meel, CIT- DR

…T: 124 ITR 1 (SC) · • CIT v. Associated Cement Companies Ltd.: 172 ITR 257 (SC) · • Alembic Chemical Works Co. Ltd. v. CIT: 177 ITR 377 (SC) · • Arvind Mills Ltd v. CIT: 97 ITR 422 (SC) 51 • ITA Nos.551/Del./2014 & 636/Del./2015 · • ChandulalKeshavlal v. CIT: 38 ITR 601(SC) · • Bombay Steam Navigation Co. (1953) (P.) Ltd. v. CIT: 56 ITR 52 (SC) · DevidasVithaldas& Co. v. CIT: 84 ITR 277 (SC) · • Chelpark Company Ltd. v. CIT: 191 ITR 249 (Mad.) · • K.T.M.T.M. Abdul Kayoom v. CIT: 44 ITR 689 (SC) · • Assam Bengal Cement Co. Ltd. v. CIT: 27 ITR 34 (SC) · • L.H. Sugar Factory & Oil Mills P. Ltd. v. CIT: 125 ITR 293 (…

Indian Rare Earths Ltd., Mumbai vs. DCIT, Cir. 1 (2)(1), Mumbai

In the result, the appeal is allowed in the terms indicated above

ITA 224/MUM/2019[2010-11]Status: DisposedITAT Mumbai02 Nov 2021AY 2010-11
Section 143(3)Section 147Section 148

…only quote a passage from the judgment of House of Lords in the case of Atherton v. British Insulated & Helsbey Cables Ltd. [1925] 10 Tax Cases 155, referred to with approval by the Hon‟ble Supreme Court in the case of CIT v. Chandulal Keshavlal & Co. [1960] 38 ITR 601, which reads as follows: "It was made clear in the above cited cases of Usher‟s Wilshire Brewery v. Bruce (supra) and Smith v. Incorporated Council of Law Reporting 1914 (6 Tax Cases 477) that a sum of money expended not with a necessity and with a view to direct and immediate benefit to the trade, but voluntarily and on the grounds of commercial…

B Rudra Gouda, Bellary vs. The Assistant Commissioner of Income Tax Circle-1, Bellary

In the result, the appeal filed by assessee stands partly allowed and the appeal by revenue stands dismissed

ITA 938/BANG/2018[2012-13]Status: DisposedITAT Bangalore27 Oct 2021AY 2012-13
For Appellant: Shri Tatakrishna, AdvocateFor Respondent: Shri Pradeep Kumar, CIT (DR)
Section 32(1)Section 37Section 37(1)

…other words, the issue of commercial expediency would also arise. ………… 20. In fact, the Hon'ble Apex Court approving the observation of ATHERTON's case - 1926 AC 205 in the matter of EASTERN INVESTMENT LIMITED vs COMMISSIONER OF INCOME TAX reported in (1951) 20 ITR 1, held: "..a sum of money expended, none of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily on the grounds of commercial expediency, and in order indirectly to facilitate the carrying on of the business, may yet be expended wholly and exclusively for the purposes of the trade", can be adopted as the best inte…

The Assistant Commissioner of Income Tax Circle-1, Bellary vs. Sri B Rudra Gowda, Bellary

In the result, the appeal filed by assessee stands partly allowed and the appeal by revenue stands dismissed

ITA 1199/BANG/2018[2012-13]Status: DisposedITAT Bangalore27 Oct 2021AY 2012-13
For Appellant: Shri Tatakrishna, AdvocateFor Respondent: Shri Pradeep Kumar, CIT (DR)
Section 32(1)Section 37Section 37(1)

…other words, the issue of commercial expediency would also arise. ………… 20. In fact, the Hon'ble Apex Court approving the observation of ATHERTON's case - 1926 AC 205 in the matter of EASTERN INVESTMENT LIMITED vs COMMISSIONER OF INCOME TAX reported in (1951) 20 ITR 1, held: "..a sum of money expended, none of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily on the grounds of commercial expediency, and in order indirectly to facilitate the carrying on of the business, may yet be expended wholly and exclusively for the purposes of the trade", can be adopted as the best inte…

Dongwoo Surfacetech India Ltd., Chennai vs. DCIT, Central Circle-2(2), Chennai

In the result, appeals filed by the assessee for

ITA 940/CHNY/2020[2013-14]Status: DisposedITAT Chennai22 Oct 2021AY 2013-14

Bench: Shri V.Durga Rao & Shri G.Manjunatha

Section 147Section 148Section 37Section 40

…disallowing expenditure incurred by the assessee for payment made to its parent company for rendering supervisory services. This legal position is supported by the decision of the Hon'ble Supreme Court in the case of CIT Vs Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC), where it was held 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. If any payment or expenditure is incurred for the purpose of trade of the assessee, it does not matter that payment may inure t…

Dongwoo Surfacetech India P Ltd, Chennai vs. ACIT(OSD), Corporate Range-1, Chennai

In the result, appeals filed by the assessee for

ITA 939/CHNY/2020[2011-12]Status: DisposedITAT Chennai22 Oct 2021AY 2011-12

Bench: Shri V.Durga Rao & Shri G.Manjunatha

Section 147Section 148Section 37Section 40

…disallowing expenditure incurred by the assessee for payment made to its parent company for rendering supervisory services. This legal position is supported by the decision of the Hon'ble Supreme Court in the case of CIT Vs Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC), where it was held 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. If any payment or expenditure is incurred for the purpose of trade of the assessee, it does not matter that payment may inure t…

ACIT (OSD) Corporate Range 1, Chennai vs. Dong Woo Surface Tech India Pvt. Ltd., Chennai

In the result, appeals filed by the assessee for

ITA 1920/CHNY/2019[2015-16]Status: DisposedITAT Chennai22 Oct 2021AY 2015-16

Bench: Shri V.Durga Rao & Shri G.Manjunatha

Section 147Section 148Section 37Section 40

…disallowing expenditure incurred by the assessee for payment made to its parent company for rendering supervisory services. This legal position is supported by the decision of the Hon'ble Supreme Court in the case of CIT Vs Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC), where it was held 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. If any payment or expenditure is incurred for the purpose of trade of the assessee, it does not matter that payment may inure t…

ACIT (OSD) Corporate Range 1, Chennai vs. Dong Woo Surface Tech India Pvt. Ltd., Chennai

In the result, appeals filed by the assessee for

ITA 1560/CHNY/2019[2014-15]Status: DisposedITAT Chennai22 Oct 2021AY 2014-15

Bench: Shri V.Durga Rao & Shri G.Manjunatha

Section 147Section 148Section 37Section 40

…disallowing expenditure incurred by the assessee for payment made to its parent company for rendering supervisory services. This legal position is supported by the decision of the Hon'ble Supreme Court in the case of CIT Vs Chandulal Keshavlal & Co. (1960) 38 ITR 601 (SC), where it was held 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. If any payment or expenditure is incurred for the purpose of trade of the assessee, it does not matter that payment may inure t…

M/S the Sandur Manganese & Iron Ores Ltd., Sandur vs. JCIT, Bellary

In the result, all the appeals of the assessee are partly allowed

ITA 1517/BANG/2015[2011-12]Status: DisposedITAT Bangalore06 Oct 2021AY 2011-12

Bench: Shri B. R. Baskaran & Smt. Beena Pillai

For Appellant: Shri S. Parthasarathi, A.RFor Respondent: Shri Muzaffar Hussain, D.R
Section 37(1)

…ther words, the issue of commercial expediency would also arise. ………… 20. In fact, the Hon'ble Apex Court approving the observation of ATHERTON's case - 1926 AC 205 in the matter of EASTERN INVESTMENT LIMITED vs COMMISSIONER OF INCOME TAX reported in (1951) 20 ITR 1, held: ITA Nos.1515 to 1517/Bang/2015 M/s. The Sandur Manganese & Iron Ores Ltd., Sandur Page 11 of 19 "..a sum of money expended, none of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily on the grounds of commercial expediency, and in order indirectly to facilitate the carrying on of the business, may yet…

M/S the Sandur Manganese & Iron Ores Ltd., Sandur vs. JCIT, Bellary

In the result, all the appeals of the assessee are partly allowed

ITA 1516/BANG/2015[2010-11]Status: DisposedITAT Bangalore06 Oct 2021AY 2010-11

Bench: Shri B. R. Baskaran & Smt. Beena Pillai

For Appellant: Shri S. Parthasarathi, A.RFor Respondent: Shri Muzaffar Hussain, D.R
Section 37(1)

…ther words, the issue of commercial expediency would also arise. ………… 20. In fact, the Hon'ble Apex Court approving the observation of ATHERTON's case - 1926 AC 205 in the matter of EASTERN INVESTMENT LIMITED vs COMMISSIONER OF INCOME TAX reported in (1951) 20 ITR 1, held: ITA Nos.1515 to 1517/Bang/2015 M/s. The Sandur Manganese & Iron Ores Ltd., Sandur Page 11 of 19 "..a sum of money expended, none of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily on the grounds of commercial expediency, and in order indirectly to facilitate the carrying on of the business, may yet…

M/S the Sandur Manganese & Iron Ores Ltd., Sandur vs. JCIT, Bellary

In the result, all the appeals of the assessee are partly allowed

ITA 1515/BANG/2015[2009-10]Status: DisposedITAT Bangalore06 Oct 2021AY 2009-10

Bench: Shri B. R. Baskaran & Smt. Beena Pillai

For Appellant: Shri S. Parthasarathi, A.RFor Respondent: Shri Muzaffar Hussain, D.R
Section 37(1)

…ther words, the issue of commercial expediency would also arise. ………… 20. In fact, the Hon'ble Apex Court approving the observation of ATHERTON's case - 1926 AC 205 in the matter of EASTERN INVESTMENT LIMITED vs COMMISSIONER OF INCOME TAX reported in (1951) 20 ITR 1, held: ITA Nos.1515 to 1517/Bang/2015 M/s. The Sandur Manganese & Iron Ores Ltd., Sandur Page 11 of 19 "..a sum of money expended, none of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily on the grounds of commercial expediency, and in order indirectly to facilitate the carrying on of the business, may yet…

The DCIT Cir 7(1), Mumbai vs. M/S. Piramal Enterprises Ltd., Mumbai

In the result, appeal of the assessee in ITA

ITA 4345/MUM/2007[2003-2004]Status: DisposedITAT Mumbai05 Oct 2021AY 2003-2004

Bench: Known As Nicholas Piramal Mumbai - 400020 India Ltd.,) Piramal Tower, Ganpatrao Kadam Marg Lower Parel, Mumbai-400013 Pan/Gir No.Aaacn4538P (Appellant) .. (Respondent) Dcit. Circle 7(1), Vs. M/S. Piramal Enterprises Ltd. Aayakar Bhavan (Formerly Known As Piramal Healthcare Mumbai - 400020 Ltd.,) (Before Known As Nicholas Piramal India Ltd.,) Piramal Tower, Ganpatrao Kadam Marg Lower Parel, Mumbai-400013 Pan/Gir No.Aaacn4538P (Appellant) .. (Respondent) M/S. Piramal Enterprises Ltd. Vs. Deputy Commissioner Of Income (Formerly Known As Piramal Tax Healthcare Ltd.,) Range 7(3)(2), (Before Known As Nicholas Piramal Mumbai - 400020 India Ltd.,) Piramal Tower, Ganpatrao Kadam Marg Lower Parel, Mumbai-400013 Pan/Gir No.Aaacn4538P (Appellant) .. (Respondent) M/S. Piramal Enterprises Limited

Section 143(3)

…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 expenditure if…