India Cements Ltd. v. CIT

60 ITR 52Supreme Court of India1966#342 most cited

What is India Cements Ltd. v. CIT authority for?

Expenses incurred for obtaining a loan for the purpose of the assessee's business, such as debenture discount, bank guarantee charges, and stamp duty, are considered revenue expenditure. These liabilities, though potentially spread over time, are deductible as revenue expenses.

247

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2008 to 2026.

Also referred to as

India Cements Ltd. v. CIT · 60 ITR 52 · Section 37(1) · revenue expenditure · expenses for obtaining loan · cost of raising finance · debenture discount · bank guarantee charges · stamp duty on loan · commercial expediency

Sections most often in play

Section 1961Section 37(1)Section 37Section 143(3)Section 142(1)Section 115JBSection 14ASection 40A(2)(b)

Issues it is cited on

section 35dsection 135commercial expediencydisallowance of interest expendituresection 139(5)section 40a(2)(b)revenue expendituresection 92bsection 36(1)(iii)section 244acorporate guaranteeenduring benefit

Judgments citing India Cements Ltd. v. CIT

COUNTRY CLUB HOSPITALITY & HOLIDAYS LIMITED,HYDERABAD vs. DCIT., CIRCLE-1(1), HYDERABAD

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

ITA 1480/HYD/2025[2011-12]Status: DisposedITAT Hyderabad27 Mar 2026AY 2011-12
Section 139Section 143(2)Section 143(3)Section 147Section 148Section 149Section 250

…y and therefore, is allowable as revenue expenditure. Thus, according to him, the findings of the A.O. as well as the Ld. CIT(A) are erroneous. He placed reliance upon the following decisions in support of his contention. 1. India Cements Ltd., vs. CIT (1966) 60 ITR 52 (SC) 2. CIT vs. Tumus Electric Corpn. Ltd., (1990) 49 Taxman 249 (MP) (HC) 3. CIT vs. East India Hotels Ltd., (2001) 119 Taxman 235 (Cal.) 4. CIT vs. South India Corpn. (Agencies) Ltd., (2007) 164 Taxman 249 (Mad.) 5. CIT vs. First Leasing Co. of India Ltd., (2008) 304 ITR 67 (Mad.) 6. CIT vs. Secure Meters Ltd., 321 ITR 611 7. CIT vs. ITC Hotels L…

WESTCOURT HOSPITALITY PVT LTD,NEW DELHI vs. DCIT, CIRCLE-25(1), DELHI

In the result appeal of the assessee is allowed

ITA 3351/DEL/2025[2018-19]Status: DisposedITAT Delhi30 Dec 2025AY 2018-19

Bench: Shri Sudhir Kumar & Shri Manish Agarwal[Assessment Year: 2018-19] Acit, Circle 25(1), Room Vs M/S. Westcourt Hospitality No. 192A, Cr Building, Pvt. Ltd. Ip Estate New-Delhi. 4391, B-5 & 6, Vasant Kunj, 110002 New Delhi-110070. Pan-Aaacw8734G Appellant Respondent [Assessment Year: 2018-19] M/S. Westcourt Hospitality Vs Acit, Circle 25(1),Room Pvt. Ltd. No. 192A, Cr Building, Ip 4391, B-5 & 6, Vasant Estate New-Delhi. 110002 Kunj, New Delhi-110070. Pan-Aaacw8734G Appellant Respondent

Section 142(1)Section 143(2)Section 143(3)Section 250Section 68

…tions: “It is well settled that expenditure incurred in connection with the issue of debentures or obtaining loan is revenue expenditure. Reference in this connection may be made to the leading judgment of the Supreme Court in India Cements Ltd. v. CIT [1966] 60 ITR 52 . The question before us however, is whether it is a debenture issue or an issue of share capital involving the strengthening of the capital base of the company. Though it prima facie appears that there are sufficient facts to indicate that what was contemplated was an issue of shares to the Mauritius Company under the Investor Agreement which woul…

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-25(1), NEW DELHI, NEW DELHI vs. WESTCOURT HOSPITALITY PRIVATE LIMITED, NEW DELHI

In the result appeal of the assessee is allowed

ITA 3294/DEL/2025[2018-19]Status: DisposedITAT Delhi30 Dec 2025AY 2018-19

Bench: Shri Sudhir Kumar & Shri Manish Agarwal[Assessment Year: 2018-19] Acit, Circle 25(1), Room Vs M/S. Westcourt Hospitality No. 192A, Cr Building, Pvt. Ltd. Ip Estate New-Delhi. 4391, B-5 & 6, Vasant Kunj, 110002 New Delhi-110070. Pan-Aaacw8734G Appellant Respondent [Assessment Year: 2018-19] M/S. Westcourt Hospitality Vs Acit, Circle 25(1),Room Pvt. Ltd. No. 192A, Cr Building, Ip 4391, B-5 & 6, Vasant Estate New-Delhi. 110002 Kunj, New Delhi-110070. Pan-Aaacw8734G Appellant Respondent

Section 142(1)Section 143(2)Section 143(3)Section 250Section 68

…tions: “It is well settled that expenditure incurred in connection with the issue of debentures or obtaining loan is revenue expenditure. Reference in this connection may be made to the leading judgment of the Supreme Court in India Cements Ltd. v. CIT [1966] 60 ITR 52 . The question before us however, is whether it is a debenture issue or an issue of share capital involving the strengthening of the capital base of the company. Though it prima facie appears that there are sufficient facts to indicate that what was contemplated was an issue of shares to the Mauritius Company under the Investor Agreement which woul…

DCIT 2(3)(1), MUMBAI vs. TATA INDUSTRIES LTD, MUMBAI

Accordingly, Ground No 2(a) & (b) of the revenue in ITA No. 4109/Mum/2012, therefore stands dismissed

ITA 5690/MUM/2015[2006-07]Status: DisposedITAT Mumbai19 Nov 2025AY 2006-07

Bench: SHRI SAKTIJIT DEY (Vice President), SHRI ARUN KHODPIA (Accountant Member)

Section 115JSection 143(3)Section 14ASection 271(1)(c)Section 37Section 40

…AO therefore calculated the expenses pertaining to the year under consideration and disallowed the remaining expenses. 36. We find that this issue is also covered with the decision of the Hon'ble Supreme Court' in the case of India Cements Ltd. v. CIT [1966] 60 ITR 52, wherein the Supreme Court held that the expenditure in raising loans or issuing debentures would be revenue in nature, irrespective of whether the borrowal is a long term or short term one. It was held that the act of borrowing money was incidental to the carrying on of business, the loan obtained was not an asset or an advantage of enduring natur…

ADDL CIT 2(3), MUMBAI vs. TATA INDUSTRIES LTD, MUMBAI

Accordingly,\nGround No 2(a) & (b) of the revenue in ITA No. 4109/Mum/2012, therefore\nstands dismissed

ITA 4109/MUM/2012[2006-07]Status: DisposedITAT Mumbai19 Nov 2025AY 2006-07
Section 115JSection 143(3)Section 14ASection 40

…herefore calculated the expenses pertaining\nto the year under consideration and disallowed the remaining expenses.\n\n36. We find that this issue is also covered with the decision of the Hon'ble Supreme Court' in\nthe case of India Cements Ltd. v. CIT [1966] 60 ITR 52, wherein the Supreme Court held that\nthe expenditure in raising loans or issuing debentures would be revenue in nature, irrespective\nof whether the borrowal is a long term or short term one. It was held that the act of borrowing\nmoney was incidental to the carrying on of business, the loan obtained was not an asset or an\nadvantage of enduring n…

RADHAKISHAN BENIWAL,JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, JAIPUR, JAIPUR

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

ITA 695/JPR/2025[2016-17]Status: DisposedITAT Jaipur10 Sept 2025AY 2016-17

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Shri P. C. Parwal, CA &For Respondent: Shri Gorav Avasthi, JCIT
Section 139Section 144Section 147rSection 148Section 148ASection 194CSection 251Section 68

…be considered from a common sense angle having due regard to the business realities. A similar view was taken by the Hon’ble Supreme Court in several other cases, inter alia: • CIT vs Nainital Bank Ltd [1966] 62 ITR 638 (SC) • India Cements Ltd vs CIT [1966] 60 ITR 52 (SC) Reliance can also be placed on the decision of the Hon’ble Supreme Court in the case of Bombay Steam Navigation Co. Private Ltd. vs CIT [1965] 56 ITR 52 (SC), wherein it was held that: ‘…If the outgoing or expenditure is so related to the carrying on or conduct of the business, that it may be regarded as an integral part of the profit-earning…

RADHAKISHNA BENIWAL,JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, JAIPUR, JAIPUR

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

ITA 694/JPR/2025[2015-16]Status: DisposedITAT Jaipur10 Sept 2025AY 2015-16

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Shri P. C. Parwal, CA &For Respondent: Shri Gorav Avasthi, JCIT
Section 139Section 144Section 147rSection 148Section 148ASection 194CSection 251Section 68

…be considered from a common sense angle having due regard to the business realities. A similar view was taken by the Hon’ble Supreme Court in several other cases, inter alia: • CIT vs Nainital Bank Ltd [1966] 62 ITR 638 (SC) • India Cements Ltd vs CIT [1966] 60 ITR 52 (SC) Reliance can also be placed on the decision of the Hon’ble Supreme Court in the case of Bombay Steam Navigation Co. Private Ltd. vs CIT [1965] 56 ITR 52 (SC), wherein it was held that: ‘…If the outgoing or expenditure is so related to the carrying on or conduct of the business, that it may be regarded as an integral part of the profit-earning…

A2Z MAINTENANCE & ENGINEERING SERVICES LTD.,GURGAON vs. DCIT, FARIDABAD

In the result, this ground of appeal is allowed

ITA 3504/DEL/2016[2010-11]Status: DisposedITAT Delhi29 Aug 2025AY 2010-11

Bench: Shri Anubhav Sharma & Shri Manish Agarwalita No.3504/Del/2016 (Assessment Year 2010-11)

Section 132(4)Section 153A

…that Ld. CIT(A) followed the judgment of Hon’ble Supreme Court in the case of Taparia Tools Ltd. vs. JCIT [2015] 55 Taxaman.com 361(SC) which has direct bearing on this issue. Further the hon’ble Madras High Court in the case of India Cements vs. reported in 60 ITR 52 also of the similar view. In view of these facts and by respectfully following the judgements of hon’ble Supreme court and of hon’ble high court as cited above, we find no infirmity in the order of Ld. CIT(A) which is hereby upheld. The ground of Appeal No.1 of the Revenue is dismissed. 20. The Revenue’s Ground of appeal No.2 is with respect to de…

A2Z MAINTENANCE & ENGINEERING SERVICES LTD.,GURGAON vs. DCIT, FARIDABAD

In the result, this ground of appeal is allowed

ITA 3503/DEL/2016[2009-10]Status: DisposedITAT Delhi29 Aug 2025AY 2009-10

Bench: Shri Anubhav Sharma & Shri Manish Agarwalita No.3504/Del/2016 (Assessment Year 2010-11)

Section 132(4)Section 153A

…that Ld. CIT(A) followed the judgment of Hon’ble Supreme Court in the case of Taparia Tools Ltd. vs. JCIT [2015] 55 Taxaman.com 361(SC) which has direct bearing on this issue. Further the hon’ble Madras High Court in the case of India Cements vs. reported in 60 ITR 52 also of the similar view. In view of these facts and by respectfully following the judgements of hon’ble Supreme court and of hon’ble high court as cited above, we find no infirmity in the order of Ld. CIT(A) which is hereby upheld. The ground of Appeal No.1 of the Revenue is dismissed. 20. The Revenue’s Ground of appeal No.2 is with respect to de…

M/S DCIT, FARIDABAD vs. M/S A2Z MAINTENANCE AND ENGG. SERVICES LTD.,, GURGAON

In the result, this ground of appeal is allowed

ITA 3414/DEL/2016[2010-11]Status: DisposedITAT Delhi29 Aug 2025AY 2010-11

Bench: Shri Anubhav Sharma & Shri Manish Agarwalita No.3504/Del/2016 (Assessment Year 2010-11)

Section 132(4)Section 153A

…that Ld. CIT(A) followed the judgment of Hon’ble Supreme Court in the case of Taparia Tools Ltd. vs. JCIT [2015] 55 Taxaman.com 361(SC) which has direct bearing on this issue. Further the hon’ble Madras High Court in the case of India Cements vs. reported in 60 ITR 52 also of the similar view. In view of these facts and by respectfully following the judgements of hon’ble Supreme court and of hon’ble high court as cited above, we find no infirmity in the order of Ld. CIT(A) which is hereby upheld. The ground of Appeal No.1 of the Revenue is dismissed. 20. The Revenue’s Ground of appeal No.2 is with respect to de…

GOLDMAN SACHS (INDIA) FINANCE PRIVATE LIMITED,MUMBAI vs. ASSESSMENT UNIT, INCOME-TAX DEPARTMENT, NEW DELHI

In the result, the appeal by the assessee is partly allowed for statistical\npurposes

ITA 6766/MUM/2024[AY 2021-22]Status: DisposedITAT Mumbai22 Aug 2025
For Appellant: Shri Madhur AgrawalFor Respondent: Ms. Neena Jeph, CIT-DR
Section 142(1)Section 143(1)Section 143(1)(a)Section 143(2)Section 143(3)Section 144C(1)Section 144C(5)Section 253Section 32Section 37(1)

…e or\nnon-convertible, thus the same does not militate against the nature of the\nde benture being the loan. Accordingly, the Hon'ble Rajasthan High Court,\nfollowing the decision of the Hon'ble Supreme Court in India Cements Ltd. Vs.\nCIT, reported in (1996) 60 ITR 52 (SC), allowed the expenditure incurred on\nthe issuance of a debenture. We find that the Hon'ble Jurisdictional High Court\nin HDFC Bank Ltd. vs. DCIT, in ITA No.58 of 2006, vide order dated\n13.11.2024, concurring with a view taken by the Hon'ble Rajasthan High Court\nin the aforesaid decision, allowed the expenditure incurred on the issuance of\n…

DOSTI REALTY LIMITED,MUMBAI vs. DCIT, CIRCLE-1(1)(1), MUMBAI

In the result, appeal of the assessee is partly allowed

ITA 6128/MUM/2024[2015-16]Status: DisposedITAT Mumbai31 Jul 2025AY 2015-16

Bench: Shri Saktijit Dey, Hon'Ble & Shri Girish Agrawalassessment Year: 2015-16

For Appellant: Shri Vijay Mehta, CAFor Respondent: Shri Annavaran Kosuri, Sr. DR
Section 143(3)Section 14ASection 37(1)

…other purpose, whether the deductibility of the interest has to be considered based on the actual use rather than the purpose for which it was raised. We draw our force from the decision of Hon'ble Supreme Court in the case of India Cement Ltd. vs. CIT [1966] 60 ITR 52 (SC) wherein it is observed that what is important is the actual use of the loan and not the intention or the motive at the time of raising the loan. This issue was also dealt by the Coordinate Bench in the case of J.F. Laboratories Ltd. vs. ITO [2005] 96 ITD 448 (Mum), wherein it was held that if loan is raised for one purpose but the same is util…

THE ASST. CIT.,CIRCLE-1(1),, BARODA vs. AMBALAL SARABHAI ENTERPRISES LIMITED,, BARODA

In the result, the appeal is allowed for statistical purposes

ITA 2033/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad08 Jul 2025AY 2012-13

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Bandish Soparkar, A.RFor Respondent: Shri Alpesh Parmar, CIT DR &
Section 115JSection 14ASection 50

…lowable as deduction in the computation of income as revenue expenditure. In the decision in the case of [2003] 132 TAXMAN 116 (GUJ.), Patel Filters Ltd., The court has held that in view of the decision of the Supreme Court in India Cements Ltd. v. CIT [1966] 60 ITR 52, it was to be held that the expenditure incurred by the assessee for obtaining the loan amount could not be treated as capital expenditure because its direct nexus was with acquiring loan and not with acquiring of any asset. Hence, the disallowance made by the AO of the brokerage expenses is directed to be deleted and this ground of appeal is allow…

AMBALAL SARABHAI ENTERPRISES LIMITED,,BARODA vs. THE DY.CIT.,CIRCLE-1(1),, BARODA

In the result, the appeal is allowed for statistical purposes

ITA 1807/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad08 Jul 2025AY 2012-13

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Bandish Soparkar, A.RFor Respondent: Shri Alpesh Parmar, CIT DR &
Section 115JSection 14ASection 50

…lowable as deduction in the computation of income as revenue expenditure. In the decision in the case of [2003] 132 TAXMAN 116 (GUJ.), Patel Filters Ltd., The court has held that in view of the decision of the Supreme Court in India Cements Ltd. v. CIT [1966] 60 ITR 52, it was to be held that the expenditure incurred by the assessee for obtaining the loan amount could not be treated as capital expenditure because its direct nexus was with acquiring loan and not with acquiring of any asset. Hence, the disallowance made by the AO of the brokerage expenses is directed to be deleted and this ground of appeal is allow…

AMBALAL SARABHAI ENTERPRISES LTD.,,BARODA vs. THE DY. COMMISSIONER OF INCOME TAX-1(1)(1),, BARODA

In the result, the appeal is allowed for statistical purposes

ITA 954/AHD/2016[2011-12]Status: FixedITAT Ahmedabad08 Jul 2025AY 2011-12
For Respondent: \nShri Bandish Soparkar, A.R
Section 115JSection 144Section 50

…able as deduction in the\ncomputation of income as revenue expenditure. In the decision in the case of [2003]\n132 TAXMAN 116 (GUJ.), Patel Filters Ltd., The court has held that in view of the\ndecision of the Supreme Court in India Cements Ltd. v. CIT [1966] 60 ITR 52, it was\nto be held that the expenditure incurred by the assessee for obtaining the loan amount\ncould not be treated as capital expenditure because its direct nexus was with acquiring\nloan and not with acquiring of any asset. Hence, the disallowance made by the AO of\nthe brokerage expenses is directed to be deleted and this ground of appeal is a…

THE DY.COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1),, VADODARA vs. AMBALAL SARABHI ENTERPRISES LIMITED,, VADODARA

In the result, the appeal is allowed for statistical purposes

ITA 1315/AHD/2016[2011-12]Status: DisposedITAT Ahmedabad08 Jul 2025AY 2011-12
For Appellant: \nShri Bandish Soparkar, A.RFor Respondent: \nShri Alpesh Parmar, CIT DR &
Section 115JSection 144Section 50

…able as deduction in the\ncomputation of income as revenue expenditure. In the decision in the case of [2003]\n132 TAXMAN 116 (GUJ.), Patel Filters Ltd., The court has held that in view of the\ndecision of the Supreme Court in India Cements Ltd. v. CIT [1966] 60 ITR 52, it was\nto be held that the expenditure incurred by the assessee for obtaining the loan amount\ncould not be treated as capital expenditure because its direct nexus was with acquiring\nloan and not with acquiring of any asset. Hence, the disallowance made by the AO of\nthe brokerage expenses is directed to be deleted and this ground of appeal is a…

ALLIANCE NIRMAAN LIMITED,BAREILLY vs. PCIT, BAREILLY

In the result, the appeal of the assessee is allowed

ITA 119/LKW/2022[2017-18]Status: DisposedITAT Lucknow12 Jun 2025AY 2017-18
Section 143(3)Section 263

…ommissioner could not have validly exercised his supervisory or revisionary power under\nSection 263. As far as the other issues i.e. bank guarantee charges and stamp duty are\nconcerned, this Court is of the opinion that the decision in India Cements Vs. CIT 60 ITR 52 and\nJeewan Lal (1929) Limited Vs. CIT 74 ITR 743, conclude the issue. These expenses had to be\nregarded as falling properly in revenue filed. Report further notices that CIT (Appeals) did not\nspecifically furnish any reasons to say why the original assessment order was unsupportable in\nlaw, in the final order made by him on 30.03.2009.\n12. As…

ACIT, CIRCLE- 17(1), NEW DELHI vs. MOSER BAER SOLAR SYSTEMS PVT. LTD., NEW DELHI

In the result, the appeal filed by the Revenue stands partly allowed for statistical purposes

ITA 3653/DEL/2018[2014-15]Status: DisposedITAT Delhi21 May 2025AY 2014-15

Bench: Shri Shamim Yahya & Shri Vimal Kumaracit, Circle 17(1), Vs. Moser Baer Solar New Delhi Systems Pvt. Ltd. 43B, Phase-Iii, Okhla Industrial Area, New Delhi – 20 (Pan: Aaica0910C) (Appellant) (Respondent)

For Appellant: Shri Neeraj Jain, Adv., Shri NikunjFor Respondent: Sh. Choudhary N.C. Roy, Sr. DR
Section 37(1)

…penditure for obtaining such report cannot be considered as capital expenditure, hence, this view of the Ld. CIT(A) deserves to be affirmed. In this regard, we place reliance upon the decision of the Apex Court in the case of India Cements Ltd. vs. CIT [1966] 60 ITR 52 (SC) for the following proposition : “Section 37(1), read with section 256 of the Income Tax Act, 1961 (Corresponding to section 10(2)(xv), read with section 66, of Indian Income Tax Act, 1922) – Business expenditure - Allowability of - Assessment year 1950-51 – Assessee company obtained loan which was secured by a charge on its fixed assets of com…

GOEL EISHA CAPITALS,PUNE vs. PCIT(CENTRAL), PUNE, PUNE

ITA 1006/PUN/2024[AY 2019 - 20]Status: DisposedITAT Pune07 Apr 2025

Bench: Shri R. K. Panda & Ms Astha Chandra

For Appellant: Shri Krishna GujarathiFor Respondent: Shri Amol Khairnar, CIT-DR
Section 132Section 142(1)Section 143(2)Section 143(3)Section 263

…xpenditure after referring to the decision of the Hon'ble Madras High Court in the case of Bush Boake Allen India Ltd. (supra) wherein the Hon'ble Madras High Court following the decision of the Hon'ble Supreme Court in the case of India Cements Ltd. vs. CIT, 60 ITR 52 held that merely because the expenditure was incurred in connection with the capital assets, the same cannot be treated as capital in nature. It is settled principle of law that once the High Court lays down particular the proposition of law, the same is deemed to be in existence from the inception. Fact would clearly suggest that there was no mate…

LADHURAM TOSHNIWAL AND SONS ELECTRICALS PVT. LTD.,KOLKATA vs. ACIT, CEN. CIR. 4(4) , KOLKATA

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

ITA 659/KOL/2024[2018-19]Status: DisposedITAT Kolkata17 Mar 2025AY 2018-19

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 143(2)Section 143(3)Section 36(1)(iii)Section 40a(2)(b)

…ons Electrical Pvt. Ltd. 6 I.T.A. No. 659/Kol/2024 Assessment Year: 2018-19 Ladhuram Toshniwal & Sons Electrical Pvt. Ltd. 7. In this context, we have gone through the decision of Hon’ble Apex Court in the case of India Cement Ltd. vs. CIT reported in [1966] 60 ITR 52 (SC) and find that the Hon’ble Supreme Court has held that the loan obtained cannot be treated as an asset or debtor for enduring the benefit of business of the assessee. The loan is a liability and has to be repaid. Looking at the data we find that sales have increased by around 21% although the debtors increase was only to the extent of 16%. 8.…

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