Indo Rama Synthetics India Ltd, V/s CIT (333 ITR 18) (Delhi); CIT v. Praga Tool Ltd (

242 ITR 317High Court2000#7350 most cited

What is Indo Rama Synthetics India Ltd, V/s CIT (333 ITR 18) (Delhi); CIT v. Praga Tool Ltd ( authority for?

Fees paid to management consultants for business efficiency improvements are not capital expenditure if the advice is not implemented or for a new business. Obtaining a report and paying for it does not automatically make it capital expenditure.

15

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2017 to 2025.

Also referred to as

CIT v. Crompton Engineering Co. Ltd · 242 ITR 317 · management consultant fees · capital expenditure · revenue expenditure · business efficiency · business restructuring · professional fees · existing business · obtaining report

Sections most often in play

Section 115JBSection 144Section 144BSection 147

Issues it is cited on

book profitssection 115jrevenue expenditurecapital expendituresection 115jbsection 115section 11previous yearprescribedcompanyindiabusiness

Judgments citing Indo Rama Synthetics India Ltd, V/s CIT (333 ITR 18) (Delhi); CIT v. Praga Tool Ltd (

Asst Commissioner of Income Tax, Circle 1, Ltu 1, Chennai, Nungambakkam vs. Chennai Petroleum Corporation Limited, Chennai

In the result, the appeal filed by the Revenue is dismissed

ITA 1835/CHNY/2024[2016-17]Status: DisposedITAT Chennai02 Apr 2025AY 2016-17

Bench: Shri Aby T. Varkey & Shri Jagadishआयकर अपील सं./Ita No.1835/Chny/2024 िनधा;रण वष; /Assessment Year: 2016-17

For Appellant: Shri Vikram VijayaraghavanFor Respondent: Shri R. Clement Ramesh Kumar, CIT
Section 115JSection 147

…has relied on various case laws, which are as under: a. Tamil Nadu Magnesite Ltd 407 ITR 543 Mad. b. Chemplast Sanmar Ltd TCA no 859 of 2008 dt 7.8.2019 c. Binani Cement vs. CIT (ITA 265 of 2009 dated 23.3.2015, Kol HC) d. CIT v Crompton Engineering Co Ltd 242 ITR 317 Mad. :- 5 -: e. Indo Rama Synthetics (1) Ltd 3 f. 33 ITR 18 Del. g. Priya Village RoadshowsLtd 332 ITR 594 Del. h. Graphite India Ltd. 221 ITR 420 Cal. i. Adadyn Technologies P Ltd 162 Taxmann.com 666 Kar. j. (SLP dismissed 300 Taxman. 112 SC) 6. The Ld. AR has further submitted that mere use of word ‘provision’ will not make an entry into an…

The Dy. Commissioner of Income Tax, Circle-2(1)(1), Baroda vs. M/S. Sun Pharma Laboratories Ltd., Mumbai

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

ITA 741/AHD/2019[2015-16]Status: DisposedITAT Ahmedabad09 Oct 2024AY 2015-16

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 115JSection 143(3)Section 14ASection 36(1)(va)Section 37(1)Section 80Section 80I

…ed by the Hon'ble Apex Court in the decision of Commissioner of Taxes v. Nchanga Consolidated Copper Mines Ltd. [1965] 58 ITR 241 (PC). 23.4.3. In a similar facts and circumstance, the Hon'ble Madras High Court in case of CIT v. Crompton Engg. Co. Ltd. (2000) 242 ITR 317 held that - "The assessee with the intention of bringing about improvements in the way it did its business had sought and obtained report of the consultants, so that efficiency of the business could be increased by employing better methods and re-organising the business itself to the extent required. The fact that it sought such advice did not im…

Sun Pharma Laboratories Ltd., Mumbai vs. The Dy. Commissioner of Income Tax, Circle-2(1)(1), Baroda

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

ITA 712/AHD/2019[2015-16]Status: DisposedITAT Ahmedabad09 Oct 2024AY 2015-16

Bench: Smt. Annapurna Gupta (Accountant Member), Shri T.R. Senthil Kumar (Judicial Member)

Section 115JSection 143(3)Section 14ASection 36(1)(va)Section 37(1)Section 80Section 80I

…ed by the Hon'ble Apex Court in the decision of Commissioner of Taxes v. Nchanga Consolidated Copper Mines Ltd. [1965] 58 ITR 241 (PC). 23.4.3. In a similar facts and circumstance, the Hon'ble Madras High Court in case of CIT v. Crompton Engg. Co. Ltd. (2000) 242 ITR 317 held that - "The assessee with the intention of bringing about improvements in the way it did its business had sought and obtained report of the consultants, so that efficiency of the business could be increased by employing better methods and re-organising the business itself to the extent required. The fact that it sought such advice did not im…

M/S Rockman Cycles Inds. Ltd vs. Commr. of Income Tax, Ldh. and Anr

The appeals are allowed and impugned orders are

ITA/244/2005HC Punjab & Haryana09 Feb 2023

Bench: MS. JUSTICE RITU BAHRI,MRS. JUSTICE MANISHA BATRA

Section 143Section 260Section 37

…he existing business more efficiently and profitably, the irresistible conclusion which follows is that such expenditure was allowable as business expenditure (See CIT v. Praga Tools Ltd. (1986) 157 ITR 282 (AP) and CIT v. Crompton Engineering Co. Ltd. (2000) 242 ITR 317 (Mad)). Learned senior counsel for the petitioner (s) has referred to judgment of Calcutta High Court in a case of J.K. Industries vs. Commissioner of Income Tax, (Central-I), passed in I.T.A No. 624-2004, decided on 17.03.2011 whereby at the time of admission of the appeal, the following substantial question of law was framed:- “Wheth…

The DCIT, Circle-1(1), Baroda vs. Gujarat Industries Power Co.Ltd., Baroda

ITA 1770/AHD/2012[2004-05]Status: DisposedITAT Ahmedabad26 May 2022AY 2004-05

Bench: Shri Mahavir Prasad, Judicial Memebr & Shri Waseem Ahmed, Accountant Memebr

For Appellant: 22-04-2022For Respondent: Shri Mohd. Usman, CIT DR &
Section 115J

…reme Court in the case of India cements Ltd wearing it is held that loan is not an asset or a advantage of enduring nature and expenditure incurred in connection with obtaining loan is not capital expenditure. Further in the case of Compton engineering Co Ltd 242 ITR 317 honourable Madras High Court held that professional fee paid to management consultant for comprehensive restructuring of business could not be treated as capital expenditure, since the report was not for the purpose of any new business, but for efficient carrying on of existing business. Further it is a fact that out of Rs.17.3 crore of total res…

The DCIT, Circle-1(1), Baroda vs. Gujarat Industries Power Co.Ltd., Baroda

ITA 1826/AHD/2010[2005-06]Status: DisposedITAT Ahmedabad26 May 2022AY 2005-06

Bench: Shri Mahavir Prasad, Judicial Memebr & Shri Waseem Ahmed, Accountant Memebr

For Appellant: 22-04-2022For Respondent: Shri Mohd. Usman, CIT DR &
Section 115J

…reme Court in the case of India cements Ltd wearing it is held that loan is not an asset or a advantage of enduring nature and expenditure incurred in connection with obtaining loan is not capital expenditure. Further in the case of Compton engineering Co Ltd 242 ITR 317 honourable Madras High Court held that professional fee paid to management consultant for comprehensive restructuring of business could not be treated as capital expenditure, since the report was not for the purpose of any new business, but for efficient carrying on of existing business. Further it is a fact that out of Rs.17.3 crore of total res…

Gujarat Industries Power Co.Ltd., Baroda vs. The Dy.CIT., Circle-1(1), Baroda

ITA 1485/AHD/2010[2005-06]Status: DisposedITAT Ahmedabad26 May 2022AY 2005-06

Bench: Shri Mahavir Prasad, Judicial Memebr & Shri Waseem Ahmed, Accountant Memebr

For Appellant: 22-04-2022For Respondent: Shri Mohd. Usman, CIT DR &
Section 115J

…reme Court in the case of India cements Ltd wearing it is held that loan is not an asset or a advantage of enduring nature and expenditure incurred in connection with obtaining loan is not capital expenditure. Further in the case of Compton engineering Co Ltd 242 ITR 317 honourable Madras High Court held that professional fee paid to management consultant for comprehensive restructuring of business could not be treated as capital expenditure, since the report was not for the purpose of any new business, but for efficient carrying on of existing business. Further it is a fact that out of Rs.17.3 crore of total res…

Deputy Commissoner of Income-Tax vs. Thermax Limited, Pune

In the result, the appeal of Revenue is partly allowed

ITA 1289/PUN/2013[2005-06]Status: DisposedITAT Pune31 Jul 2019AY 2005-06

Bench: Shri R.S. Syal, Vp & Shri Vikas Awasthy, Jm

For Appellant: Shri H.P MahajaniFor Respondent: Mrs. Nandita Kanchan
Section 14A

…rived from such consultancies would enure to the future years also. According to the learned counsel for the assessee, this question of law is covered against the revenue by the decision of this Court in the case of CIT v. Crompton Engineering Co. Ltd. [2000] 242 ITR 317 (Mad.), in which it was held as follows: “Merely obtaining a report from the management consultant and paying the fees therefore, could not be regarded as capital expenditure as such report was not obtained as part of documentation packages, but was obtained in a contract covering comprehensive restructuring of the business involved. No new line…

Thermax Limited, Pune vs. Dy. CIT, Circle 10, Pune

In the result, the appeal of Revenue is partly allowed

ITA 1033/PUN/2013[2005-06]Status: DisposedITAT Pune31 Jul 2019AY 2005-06

Bench: Shri R.S. Syal, Vp & Shri Vikas Awasthy, Jm

For Appellant: Shri H.P MahajaniFor Respondent: Mrs. Nandita Kanchan
Section 14A

…rived from such consultancies would enure to the future years also. According to the learned counsel for the assessee, this question of law is covered against the revenue by the decision of this Court in the case of CIT v. Crompton Engineering Co. Ltd. [2000] 242 ITR 317 (Mad.), in which it was held as follows: “Merely obtaining a report from the management consultant and paying the fees therefore, could not be regarded as capital expenditure as such report was not obtained as part of documentation packages, but was obtained in a contract covering comprehensive restructuring of the business involved. No new line…

Sri Chamundeswari Sugars Limited, Bangalore vs. The Deputy Commissioner of Income Tax Circle-6(1)(2), Bangalore

In the result, the assessee’s appeal for Assessment Year 2012-13

ITA 1499/BANG/2017[2012-13]Status: DisposedITAT Bangalore27 Feb 2019AY 2012-13

Bench: Shri N. V. Vasudevanand Shri Jason P. Boazassessment Year : 2012-13 M/S. Sri Chamundeswari Sugars Ltd., Vs. The Deputy Commissioner Of No.88/5, Richmond Road, Income Tax, Bangalore. Circle - 6(1)(2), Pan : Aaccs 5004 R Bengaluru. Appellant Respondent Assessee By : Shri. Saroj Kumar Parida, Advocate Revenue By : Shri. C. H. Sundar Rao, Cit-Dr-I Date Of Hearing : 21.12.2018 Date Of Pronouncement : 27.02.2019

For Appellant: Shri. Saroj Kumar Parida, AdvocateFor Respondent: Shri. C. H. Sundar Rao, CIT-DR-I
Section 143(1)Section 143(3)Section 14A

…ct. In support of its contentions, the assessee placed reliance on the following judicial pronouncements: (i) ACIT Vs. R. R. Industries Ltd., (1256/Mad/2011) (ii) Nimbus Communication Ltd., (132 TTJ 351) (Mumbai, ITAT) (iii) CIT Vs. Crompton Engg. Co. Ltd., (242 ITR 317) (Mad.) 6.4.1 We have considered the rival contentions / submissions and perused the material on record. From an appraisal of the record before us, we find that the Annual General Meeting (AGM) of the assessee company on 13.09.2010 had approved the proposal of increasing the assessee’s authorized share capital. Even before the approval of the AG…

Rallis India Ltd, Mumbai vs. CIT -3, Mumbai

The appeal of the Revenue is dismissed,

ITA 3465/MUM/2013[2008-09]Status: DisposedITAT Mumbai05 Mar 2018AY 2008-09

Bench: Shri Joginder Singh & Shri G. Manjunathaassessment Year: 2008-09 M/S Rallis India Ltd. Cit -3, Mumbai बनाम/ 156/157, Nariman Bhawan, Vs. 15Th Floor, 227, Nariman Point, Mumbai – 400 021. ("नधा"रती /Assessee) (राज"व /Revenue) P.A. No. Aabcr 2657 N & Assessment Year: 2008-09 Dcit -3(3)(1), Mumbai M/S Rallis India Ltd. बनाम/ Room No.609, 6Th Floor, 156/157, Nariman Bhawan, Vs. Aayakar Bhavan, M. K. Road, 15Th Floor, 227, Nariman Mumbai – 400 020. Point, Mumbai – 400 021. (राज"व /Revenue) ("नधा"रती /Assessee) P.A. No. Aabcr 2657 N

Section 28

…ness of the assessee's established enterprise." In view of the above decision and the ratio laid down in the case of Indo Rama Synthetics India Ltd, V/s CIT (333 ITR 18) (Delhi); CIT v. Praga Tool Ltd (157 ITR 282) (AP); CIT vs. Crompton Engineering Co. Ltd. (242 ITR 317) (Mad)‟ CIT V/s JCT Electronics Ltd (P&H) (ITA 676 of 2009); CIT V/s Abbott Laboratories (I) P Ltd (202 ITR 819) Bom; EL Forge Ltd V.s DCIT (2013) 216 Taxman 114 (Mad); CIT V/s Carborandum Universal Ltd (2008) 219 CTR 202 (Mad), the AO is directed to treat the expenditure on account of legal and professional fees amounting to Rs.1,06,52,800/-” 22…

DCIT Cir 3(3), Mumbai vs. Rallis India Ltd, Mumbai

In the result, the appeal of the revenue is dismissed

ITA 4316/MUM/2014[2010-11]Status: DisposedITAT Mumbai08 Nov 2017AY 2010-11

Bench: Shri Saktijit Dey, Jm & Shri Rajesh Kumar, Am आमकय अऩीर सं./ I.T.A. No.4234/Mum/2014 (निर्ाारण वषा / Assessment Year :2010-11) M/S Rallis India Ltd, Addl.Commissioner Of Income 156/157 Nariman Bhavan, Tax-Circle 3(3), फनाभ/ Room No.609, 6Th Floor, Nariman Point, Mumbai-400001 Aayakar Bhavan, Vs. M K Road, Mumbai-400020 (अऩीराथी /Appellant) (प्रत्मथी / Respondent) आमकय अऩीर सं./ I.T.A. No.4316/Mum/2014 (निर्ाारण वषा / Assessment Year :2010-11) Dy.Commissioner Of Income Tax- M/S Rallis India Ltd, Circle 3(3), 156/157 Nariman Bhavan, फनाभ/ Room No.609, 6Th Floor, Nariman Point, Aayakar Bhavan, Mumbai-400001 Vs. M K Road, Mumbai-400020 (अऩीराथी /Appellant) (प्रत्मथी / Respondent) Pan: Aabcr2657N अऩीराथी की ओय से / Assessee By : S/Shri Jitendra Jain, H.Jemshethji & Darshit Naik प्रत्मथी की ओय से/Respondent By : Shri Purishottam Kumar सुनवाई की तायीख /Date Of Hearing : 9.8.2017 घोषणा की तायीख /Date Of Pronouncement : 8.11.2017

For Appellant: S/Shri Jitendra Jain, H.Jemshethji and Darshit NaikFor Respondent: Shri Purishottam Kumar
Section 10(34)Section 14ASection 80I

…ness of the assessee's established enterprise." In view of the above decision and the ratio laid down in the case of Indo Rama Synthetics India Ltd, V/s CIT (333 ITR 18) (Delhi); CIT v. Praga Tool Ltd (157 ITR 282) (AP); CIT vs. Crompton Engineering Co. Ltd. (242 ITR 317) (Mad)‟ CIT V/s JCT Electronics Ltd (P&H) (ITA 676 of 2009); CIT V/s Abbott Laboratories (I) P Ltd (202 ITR 819) Bom; EL Forge Ltd V.s DCIT (2013) 216 Taxman 114 (Mad); CIT V/s Carborandum Universal Ltd (2008) 219 CTR 202 (Mad), the AO is directed to treat the expenditure on account of legal and professional fees amounting to Rs.1,06,52,800/- “…

Rallis India Ltd, Mumbai vs. Addl CIT 3(3), Mumbai

In the result, the appeal of the revenue is dismissed

ITA 4234/MUM/2014[2010-11]Status: DisposedITAT Mumbai08 Nov 2017AY 2010-11

Bench: Shri Saktijit Dey, Jm & Shri Rajesh Kumar, Am आमकय अऩीर सं./ I.T.A. No.4234/Mum/2014 (निर्ाारण वषा / Assessment Year :2010-11) M/S Rallis India Ltd, Addl.Commissioner Of Income 156/157 Nariman Bhavan, Tax-Circle 3(3), फनाभ/ Room No.609, 6Th Floor, Nariman Point, Mumbai-400001 Aayakar Bhavan, Vs. M K Road, Mumbai-400020 (अऩीराथी /Appellant) (प्रत्मथी / Respondent) आमकय अऩीर सं./ I.T.A. No.4316/Mum/2014 (निर्ाारण वषा / Assessment Year :2010-11) Dy.Commissioner Of Income Tax- M/S Rallis India Ltd, Circle 3(3), 156/157 Nariman Bhavan, फनाभ/ Room No.609, 6Th Floor, Nariman Point, Aayakar Bhavan, Mumbai-400001 Vs. M K Road, Mumbai-400020 (अऩीराथी /Appellant) (प्रत्मथी / Respondent) Pan: Aabcr2657N अऩीराथी की ओय से / Assessee By : S/Shri Jitendra Jain, H.Jemshethji & Darshit Naik प्रत्मथी की ओय से/Respondent By : Shri Purishottam Kumar सुनवाई की तायीख /Date Of Hearing : 9.8.2017 घोषणा की तायीख /Date Of Pronouncement : 8.11.2017

For Appellant: S/Shri Jitendra Jain, H.Jemshethji and Darshit NaikFor Respondent: Shri Purishottam Kumar
Section 10(34)Section 14ASection 80I

…ness of the assessee's established enterprise." In view of the above decision and the ratio laid down in the case of Indo Rama Synthetics India Ltd, V/s CIT (333 ITR 18) (Delhi); CIT v. Praga Tool Ltd (157 ITR 282) (AP); CIT vs. Crompton Engineering Co. Ltd. (242 ITR 317) (Mad)‟ CIT V/s JCT Electronics Ltd (P&H) (ITA 676 of 2009); CIT V/s Abbott Laboratories (I) P Ltd (202 ITR 819) Bom; EL Forge Ltd V.s DCIT (2013) 216 Taxman 114 (Mad); CIT V/s Carborandum Universal Ltd (2008) 219 CTR 202 (Mad), the AO is directed to treat the expenditure on account of legal and professional fees amounting to Rs.1,06,52,800/- “…

M/S. Tata Motors Ltd., Mumbai vs. Jt. CIT Spl. RG. - 2, Mumbai

Appeal of the AO is dismissed

ITA 7148/MUM/2004[1998-1999]Status: DisposedITAT Mumbai06 Jan 2017AY 1998-1999
For Appellant: Shri Dinesh VyasFor Respondent: Shri-Anand Mohan-CIT-DR
Section 254(1)Section 37

…आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, , , , मुंबई आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण मुंबई मुंबई “ “ “ “ ई” ” ” ” खंडपीठ मुंबई खंडपीठ खंडपीठ खंडपीठ Income-tax Appellate Tribunal -“E”Bench Mumbai सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"",लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं, , , , सी एवं सी सी. एन सी एन एन. "साद एन "साद "साद,, "याियक "साद "याियक "याियक सद"य "याियक सद"य सद"य सद"य Before S/Shri Rajendra,Accountant Member and C.N. Prasad,Judicial Member आयकर आयकर अपील अपील संसंसंसं/ ITA/6214/M/2003: िनधा"रण िनधा"रण वष" वष"/Assessment Year-1997-98 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष…

Tata Motors Ltd vs. DCIT RG - 2(1)

Appeal of the AO is dismissed

ITA 6214/MUM/2003[1997 - 98]Status: DisposedITAT Mumbai06 Jan 2017
For Appellant: Shri Dinesh VyasFor Respondent: Shri-Anand Mohan-CIT-DR
Section 254(1)Section 37

…आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, , , , मुंबई आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण मुंबई मुंबई “ “ “ “ ई” ” ” ” खंडपीठ मुंबई खंडपीठ खंडपीठ खंडपीठ Income-tax Appellate Tribunal -“E”Bench Mumbai सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"",लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं, , , , सी एवं सी सी. एन सी एन एन. "साद एन "साद "साद,, "याियक "साद "याियक "याियक सद"य "याियक सद"य सद"य सद"य Before S/Shri Rajendra,Accountant Member and C.N. Prasad,Judicial Member आयकर आयकर अपील अपील संसंसंसं/ ITA/6214/M/2003: िनधा"रण िनधा"रण वष" वष"/Assessment Year-1997-98 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष…

Indo Rama Synthetics India Ltd, V/s CIT (333 ITR 18) (Delhi); CIT v. Praga Tool Ltd ( (242 ITR 317) — Cited in 15 Judgments | BharatTax