ITO v. Mokul Finance (P) Ltd.

29 SOT 11Income Tax Appellate Tribunal2009#8948 most cited

What is ITO v. Mokul Finance (P) Ltd. authority for?

Expenditure incurred by an artificial juridical person to maintain its existence and continue its business operations is allowable as a business deduction, provided it is not excessive or unreasonable for legitimate business needs.

12

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2017 to 2025.

Also referred to as

ITO v. Mokul Finance (P) Ltd. · section 30 · section 34 · legal expenses · business expenditure · artificial juridical person · business necessity · expenditure to keep afloat · continued existence

Issues it is cited on

arbitrary and capriciouscarry forward of losseslegal expensesgoing concernsection 135prohibited by lawsection 30section 34section 44aprofits and gains of business or professionsundry creditorsappeal before cit(a)

Judgments citing ITO v. Mokul Finance (P) Ltd.

Snw Smith Consultant Private Limited, New Delhi vs. DCIT Central Circle 5, New Delhi

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

ITA 2635/DEL/2023[2018-19]Status: DisposedITAT Delhi08 Oct 2025AY 2018-19

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahmansnw Smith Consultant Private Limited, Vs. Dcit, Central Circle 5, 112-Gl, Antriksh Bhawan, New Delhi. 22, Kg Marg, New Delhi – 110 001. (Pan : Aakcs4626B) (Appellant) (Respondent) Assessee By : Ms. Hasneeta Matta, Advocate Shri Mahan Kalra, Advocate Revenue By : Shri Manish Gupta, Sr. Dr Date Of Hearing : 10.07.2025 Date Of Order : 08.10.2025 O R D E R Per S. Rifaur Rahman: 1. This Appeal Is Filed By The Assessee Against The Order Of The Ld. Commissioner Of Income-Tax (Appeals)-24, New Delhi (For Short ‘Ld. Cit (A)) For The Assessment Year 2018-19. 2. Brief Facts Of The Case Are, This Is Second Round Of Appeal After Setting Aside The Appeal Preferred By The Assessee To The File Of The Ao By The Coordinate Bench Vide Ita No.1588/Del/2020 To Verify The Expenditures Claimed By The Assessee Even Though There Was No Business Income

For Appellant: Ms. Hasneeta Matta, AdvocateFor Respondent: Shri Manish Gupta, Sr. DR
Section 142(1)

…that the expenditure that he had incurred was expended for the purpose of his business. 3.6. The above ratio has been followed by this Hon'ble jurisdictional Tribunal in a plethora of cases, e.g., Hon'ble Delhi Tribunal in ITO v. Mokul Finance (P) Ltd. [2009] 29 SOT 11 (Delhi) (URO); Hon'ble Delhi Tribunal in DCIT v. NCR Business Park (P.) Ltd [2022J 141 taxmann.com 563 (Delhi - Trib.). 4. Key issues in appeal Lawyer Fees - not for litigation but Advisory and drafting of proposals 4.1. The Ld. AO/CIT(A) have disallowed two expenses. one, on account of Lawyers fees towards seeking legal guidance/opinion (pages 70…

M/S Punjab Tourism Developmenet Corporation Limited, Chandigarh vs. DCIT, Circle-1(1), Chandigarh

Appeal of the assessee is allowed

ITA 142/CHANDI/2020[2016-17]Status: DisposedITAT Chandigarh18 Nov 2024AY 2016-17

Bench: Ao)

For Appellant: Sh.Tejmohan Singh, Adv. and Sh. Vineet Khurana, C. AFor Respondent: Sh.Vivek Vardhan, JCIT, Sr. D. R
Section 142(1)Section 143(2)Section 253

…s stated earlier it has not been held to be not incurred solely or wholly for business of Assessee Corporation. We, therefore allow the expenses incurred 100%. 7.5 We agree with the view of co-ordinate bench case of ITAT Delhi benches case reported in [2009] 29 SOT 11 (Delhi) in case of ITO v/s Mokul Finance (P) Ltd. wherein in para 5 it has been held that: “As Dr. Gupta rightly contends, the assessee being an artificial juridical person, it needs to incur certain expenditure to keep itself afloat and have its continued existence. Unlikely a natural person, a company can only operate through other natural perso…

M/S Punjab Tourism Developmenet Corporation Limited, Chandigarh vs. DCIT, Circle-1(1), Chandigarh

Appeal of the assessee is allowed

ITA 141/CHANDI/2020[2015-16]Status: DisposedITAT Chandigarh18 Nov 2024AY 2015-16

Bench: Ao)

For Appellant: Sh.Tejmohan Singh, Adv. and Sh. Vineet Khurana, C. AFor Respondent: Sh.Vivek Vardhan, JCIT, Sr. D. R
Section 142(1)Section 143(2)Section 253

…s stated earlier it has not been held to be not incurred solely or wholly for business of Assessee Corporation. We, therefore allow the expenses incurred 100%. 7.5 We agree with the view of co-ordinate bench case of ITAT Delhi benches case reported in [2009] 29 SOT 11 (Delhi) in case of ITO v/s Mokul Finance (P) Ltd. wherein in para 5 it has been held that: “As Dr. Gupta rightly contends, the assessee being an artificial juridical person, it needs to incur certain expenditure to keep itself afloat and have its continued existence. Unlikely a natural person, a company can only operate through other natural perso…

M/S Punjab Tourism Developmenet Corporation Limited, Chandigarh vs. DCIT, Circle-1(1), Chandigarh

Appeal of the assessee is allowed

ITA 140/CHANDI/2020[2014-15]Status: DisposedITAT Chandigarh18 Nov 2024AY 2014-15

Bench: Ao)

For Appellant: Sh.Tejmohan Singh, Adv. and Sh. Vineet Khurana, C. AFor Respondent: Sh.Vivek Vardhan, JCIT, Sr. D. R
Section 142(1)Section 143(2)Section 253

…s stated earlier it has not been held to be not incurred solely or wholly for business of Assessee Corporation. We, therefore allow the expenses incurred 100%. 7.5 We agree with the view of co-ordinate bench case of ITAT Delhi benches case reported in [2009] 29 SOT 11 (Delhi) in case of ITO v/s Mokul Finance (P) Ltd. wherein in para 5 it has been held that: “As Dr. Gupta rightly contends, the assessee being an artificial juridical person, it needs to incur certain expenditure to keep itself afloat and have its continued existence. Unlikely a natural person, a company can only operate through other natural perso…

M/S Punjab Tourism Developmenet Corporation Limited, Chandigarh vs. DCIT, Circle-1(1), Chandigarh

Appeal of the assessee is allowed

ITA 139/CHANDI/2020[2012-13]Status: DisposedITAT Chandigarh18 Nov 2024AY 2012-13

Bench: Ao)

For Appellant: Sh.Tejmohan Singh, Adv. and Sh. Vineet Khurana, C. AFor Respondent: Sh.Vivek Vardhan, JCIT, Sr. D. R
Section 142(1)Section 143(2)Section 253

…s stated earlier it has not been held to be not incurred solely or wholly for business of Assessee Corporation. We, therefore allow the expenses incurred 100%. 7.5 We agree with the view of co-ordinate bench case of ITAT Delhi benches case reported in [2009] 29 SOT 11 (Delhi) in case of ITO v/s Mokul Finance (P) Ltd. wherein in para 5 it has been held that: “As Dr. Gupta rightly contends, the assessee being an artificial juridical person, it needs to incur certain expenditure to keep itself afloat and have its continued existence. Unlikely a natural person, a company can only operate through other natural perso…

ACIT, Central Circle-6, New Delhi vs. Fiitjee Edusoft Ltd (Merged With Fiitjee Ltd), New Delhi

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

ITA 5266/DEL/2018[2013-14]Status: DisposedITAT Delhi23 Jan 2023AY 2013-14
For Appellant: Shri Anil Bajaj, CAFor Respondent: Shri Gurpreet Shah Singh, Sr. DR
Section 32Section 37

…was not related to assessee’s business. Thereafter, ld. Counsel for the assessee referred to plethora of case laws in this regard as under:- l. CIT vs E-funds International India (2007) 162 Taxmann 1 Delhi High Court 2. ITO vs Mokul Finance (P) Ltd. (2009) 29 SOT 11 Delhi Tribunal 3. CIT vs Ganga Properties Ltd. (1992) 62 Taxmann 286 Calcutta High Court 4. L.Ve. Vairavan Chettiar vs CIT (1969) 72 ITR 114 Madras High Court 5. ITO vs Patel Corp. P Ltd. [2017] 86 taxmann.com 82 Mumbai Tribunal 6. Akarsh Printers Ltd., Kolkata vs Department Of Income Tax I.T.A.No.2279 (Kol) of 2007 Kolkata Tribunal 7. Pr. Comm…

Fiitjee Edusoft Ltd (Merged With Fiitjee Ltd), New Delhi vs. ACIT, Central Circle-6, New Delhi

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

ITA 4975/DEL/2018[2013-14]Status: DisposedITAT Delhi23 Jan 2023AY 2013-14
For Appellant: Shri Anil Bajaj, CAFor Respondent: Shri Gurpreet Shah Singh, Sr. DR
Section 32Section 37

…was not related to assessee’s business. Thereafter, ld. Counsel for the assessee referred to plethora of case laws in this regard as under:- l. CIT vs E-funds International India (2007) 162 Taxmann 1 Delhi High Court 2. ITO vs Mokul Finance (P) Ltd. (2009) 29 SOT 11 Delhi Tribunal 3. CIT vs Ganga Properties Ltd. (1992) 62 Taxmann 286 Calcutta High Court 4. L.Ve. Vairavan Chettiar vs CIT (1969) 72 ITR 114 Madras High Court 5. ITO vs Patel Corp. P Ltd. [2017] 86 taxmann.com 82 Mumbai Tribunal 6. Akarsh Printers Ltd., Kolkata vs Department Of Income Tax I.T.A.No.2279 (Kol) of 2007 Kolkata Tribunal 7. Pr. Comm…

ITO, New Delhi vs. M/S. Nahar Retail Trading Services Ltd., New Delhi

In the result, the appeal of the revenue in ITA No

ITA 3158/DEL/2016[2011-12]Status: DisposedITAT Delhi29 Jan 2020AY 2011-12

Bench: Shri N.K. Billaiya & Shri Kuldip Singh

For Appellant: Shri Vishal Kalra, AdvFor Respondent: Shri S.N. Meena, Sr. DR
Section 24

…r maintaining corporate structure of the assessee. In our considered view, such expenditure has to be allowed while computing the income of the assessee. Our this view is fortified by the decision of the co-ordinate bench in the case of Mokul Finance Pvt Ltd 29 SOT 11. The relevant findings of the co-ordinate bench read as under: “3. The material facts of the case are like this. The assessee is a domestic company and, in the relevant previous year, it had income only from interest and dividend. In the course of scrutiny assessment proceedings, the AO noticed that no business activities were carried out by the…

Nahar Retail Trading Services Ltd., New Delhi vs. ITO, New Delhi

In the result, the appeal of the revenue in ITA No

ITA 2883/DEL/2016[2011-12]Status: DisposedITAT Delhi29 Jan 2020AY 2011-12

Bench: Shri N.K. Billaiya & Shri Kuldip Singh

For Appellant: Shri Vishal Kalra, AdvFor Respondent: Shri S.N. Meena, Sr. DR
Section 24

…r maintaining corporate structure of the assessee. In our considered view, such expenditure has to be allowed while computing the income of the assessee. Our this view is fortified by the decision of the co-ordinate bench in the case of Mokul Finance Pvt Ltd 29 SOT 11. The relevant findings of the co-ordinate bench read as under: “3. The material facts of the case are like this. The assessee is a domestic company and, in the relevant previous year, it had income only from interest and dividend. In the course of scrutiny assessment proceedings, the AO noticed that no business activities were carried out by the…

M/S. Ideal Hitech Engineering Equipment (P) Ltd., New Delhi vs. ITO, New Delhi

In the result, appeal of the assessee is allowed

ITA 3316/DEL/2017[2012-13]Status: DisposedITAT Delhi13 Aug 2019AY 2012-13

Bench: Shri H.S. Sidhu & Dr. B.R.R. Kumar

Section 143(2)Section 22Section 23Section 23(1)(a)Section 23(1)(c)Section 24Section 251(2)

…rd, reliance is placed on the following judgments: Inder Chand Hari Ram Vs CIT, Allahabad High Court, [1953] 23 ITR 437 Arkaaye Builders & Developers Pvt. Ltd. Versus ITO, Ward-2(1), New Delhi, ITAT Delhi, Income-tax Officer v. Mokul Finance (P.) Ltd, [2009] 29 SOT 11 (DELHI)(URO) L.VE. Vairavan Chettiar Versus Commissioner of Income-Tax, Madras. MADRAS High Court, 72 ITR 114 28. Further, it has also been appreciated in a number of judgments while dealing with the question of allowability of expenses in absence of business income that as long as the company is in existence, it is required to comply with various…

Bara Machines Pvt. Ltd., Ahmedabad vs. The Income Tax Officer, Ward-1(2), Ahmedabad

In the result, assessee’s appeal is allowed

ITA 1509/AHD/2014[2010-11]Status: DisposedITAT Ahmedabad24 Apr 2019AY 2010-11

Bench: Shri Pramod Kumar, Hon’Ble&Smt. Madhumita Royआयकरअपीलसं.Ita No. 1509/Ahd/2014 "नधा"रणवष"/Asstt. Year: 2010-11 Bara Machines Pvt. Ltd. Vs. Ito C/O. Ritaben B. Patel Ward-1(2) (Director) Pratyaksh Vera Bhavan, 1/5-6, Manichandra Society, Ambawadi, Nr. Surdhara Circle, Thaltej, Ahmedabad- 380015 Ahmedabad- 380054 Pan:Aab Cb8 696 F अपीलाथ"/ (Appellant) "त् यथ"/ (Respondent)

For Appellant: Revenue byFor Respondent: ShriJames Kurien,Sr. DR
Section 143(3)Section 22Section 24Section 32

…आयकरअपील"यअ"धकरण, अहमदाबाद"यायपीठ ‘A’- अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD – BENCH ‘A’ BEFORE SHRI PRAMOD KUMAR, HON’BLEVICE PRESIDENT &SMT. MADHUMITA ROY, JUDICIAL MEMBER आयकरअपीलसं.ITA No. 1509/Ahd/2014 "नधा"रणवष"/Asstt. Year: 2010-11 Bara Machines Pvt. Ltd. Vs. ITO C/o. Ritaben B. Patel Ward-1(2) (Director) Pratyaksh Vera Bhavan, 1/5-6, Manichandra Society, Ambawadi, Nr. Surdhara Circle, Thaltej, Ahmedabad- 380015 Ahmedabad- 380054 PAN:AAB CB8 696 F अपीलाथ"/ (Appellant) "त् यथ"/ (Respondent) ShriS. N. Divatia, AR Assessee by : Revenue by : ShriJames Kurien,Sr. DR सुनवाईक"तार"ख/Date of Hea…

Solid Contianers Ltd, Mumbai vs. ITO RG 7(2)(4), Mumbai

ITA 5135/MUM/2013[2007-08]Status: DisposedITAT Mumbai03 May 2017AY 2007-08
For Appellant: Shri Neeraj ShethFor Respondent: Shri Vishwas Mundhe-DR
Section 143Section 254(1)

…आयकर अपीलीय अपीलीय अिधकरण अिधकरण, मुंबई मुंबई “ ई” खंडपीठ खंडपीठ आयकर आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण मुंबई मुंबई खंडपीठ खंडपीठ Income-tax Appellate Tribunal -“E”Bench Mumbai सव"ी सव"ी राजे"" राजे"",लेखा लेखा सद"य सद"य एवं एवं, राम राम लाल लाल नेगी नेगी, "याियक "याियक सद"य सद"य सव"ी सव"ी राजे"" राजे"" लेखा लेखा सद"य सद"य एवं एवं राम राम लाल लाल नेगी नेगी "याियक "याियक सद"य सद"य Before S/Shri Rajendra,Accountant Member and Ram Lal Negi,Judicial Member वष" /Assessment Year: 2007-08 आयकर अपील अपील संसंसंसं./I.T.A./5135/Mum/2013, िनधा"रण िनधा"रण वष" आयकर आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" Solid Cont…