J. K. Woolen Mills v. CIT

86 ITR 11Supreme Court of India1972#3601 most cited

What is J. K. Woolen Mills v. CIT authority for?

Business expenditure is deductible even if the business has not yet commenced, provided it is incurred for the purpose of setting up the business. The commercial expediency of a businessman's decision regarding payment quantum is generally respected.

33

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2015 to 2026.

Also referred to as

J. K. Woolen Mills v. CIT · 86 ITR 11 · business expenditure · commencement of business · setting up business · commercial expediency · trade creditors · section 142(1) · section 143(2) · section 143(3) · section 131 · section 40a(2)(b) · section 40a(2)

Sections most often in play

Section 142(1)Section 143(2)Section 143(3)Section 131Section 143(1)(a)Section 144BSection 144C(13)Section 145(3)

Issues it is cited on

section 24(1)trade creditorspercentage completion methodsection 40a(2)(b)section 40a(2)section 56(2)(viib)section 36(1)(vii)section 41(1)share capital and share premiumsection 41commercial expediencyreasoned order

Judgments citing J. K. Woolen Mills v. CIT

Jindal Steel & Power Ltd., New Delhi vs. ACIT, Hisar

In the result, the appeal of the assessee is partly allowed

ITA 893/DEL/2014[2009-10]Status: DisposedITAT Delhi29 Apr 2019AY 2009-10

Bench: Sh. Bhavnesh Saini & Sh. N. S. Sainiita No. 893/Del/2014 : Asstt. Year : 2009-10 Jindal Steel & Power Ltd., Vs Asstt. Commissioner Of Jindal Centre, 12, Bhikaji Cama Income Tax, Hisar Circle, Place, New Delhi-110066 Hisar (Appellant) (Respondent) Pan No. Aaacj7079D Assessee By : Sh. Salil Kapoor, Adv., Sh. Sumit Lal Chandani, Adv., Ms. Ananya Kapoor, Adv. & Ms. Pallavi Saigal, Adv. Revenue By : Sh. Sanjay I. Bara, Cit Dr Date Of Hearing :05.03.2019 Date Of Pronouncement : 29.04.2019 Order Per N. S. Saini: This Is An Appeal Filed By The Assessee Against The Order Of Assessing Officer U/S 143(3)/144C(13) Of The Income Tax Act, 1961 Dated 29.10.2018 For Assessment Years 2013-14

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Sh. Sanjay I. Bara, CIT DR
Section 143(3)Section 144CSection 80Section 80I

…91 ITR 641 that where there is no nexus between the business and expenditure, the expenditure is not allowable. In this regard, he drew support from the judgement of the Hon'ble Supreme Court, delivered in the case of Aluminum Corporation of India Ltd. Vs CIT 86 ITR 11, wherein, it was held that for allowing any expenditure there must be commercial expediency. In view of the above discussion, it is clear that - firstly these are personal expenses, which remain to be verifiable in the absence of any bills and vouchers and secondly the tour expenses are not in any way incidental to business of the assessee and henc…

M/S. Hyderabad Distilleries & Wineries Pvt.Ltd., Hyderabad vs. ACIT, Circle-2(2), Hyderabad

Appeal are allowed

ITA 740/HYD/2012[2008-19]Status: DisposedITAT Delhi12 Jul 2018AY 2008-19

Bench: Shri P. M. Jagtap & Ms Suchitra Kamblem/S Hyderabad Distilleries & Vs Acit Wineries Pvt. Ltd. A-4, Ida, Uppal Circle-2(2) Hyderabad-39 Hyderabad Aaach2679B (Appellant) (Respondent)

Section 5

…lied upon the following decisions in reference to reasonableness of expenditure to be seen from point of view of business: • CIT vs. Walchand & Co. 65 ITR 381 (SC) • J. K. Woollen Manufacturers vs. CIT 72 ITR 612 (SC) • Aluminium Corpn. Of India Ltd. vs. CIT 86 ITR 11 (SC) The Ld. AR submitted that the tests that have evolved for determining the nature of income derived from netting of assets on a distinguishing of the decisions referred hereinabove may be stated as under: (i) no precise test can be laid down to ascertain whether income (referred to by whatever nomenclature, lease amount, rents licence fee) re…

Bhinmal Contractors Property & Land Developers P. Ltd, Mumbai vs. ACIT 4(1), Mumbai

In the result, appeals are allowed in terms indicated hereinabove

ITA 7207/MUM/2012[2008-09]Status: DisposedITAT Mumbai26 Apr 2018AY 2008-09

Bench: Shri R.C.Sharma, Am & Shri Ram Lal Negi, Jm

Section 143(3)Section 194CSection 80Section 80I

…nnot made arbitrary addition without any evidence :- M/s. Bhinmal Contractors Property & Land Developers P. Ltd • CIT V Chandanlal Keshawlal & Co. (1960) 38 ITR 601 (SC) • JK Woolen Mfrs V CIT (1969) 72 ITR 612 (SC) • Alluminium Corp of India Ltd V CIT (1972) 86 ITR 11 (SC) • OMKAR SAHAY MOHEMMAD SAIL 37 ITR 151 (SC) • Kishanchand Chelaram vs CIT 125 ITR 713 (SC) • Friends Clearing Agency (P) Ltd V CIT 237 CTR 464/332 ITR 269 • CIT v. SSP (P) Ltd {2011] 202 Taxman 386/14 taxmann.com 87(Punj & Har) • CIT Faridabad vs.S.S.P. (P.) Ltd. [2011] 14 taxmann.com 87 (Punj. & Har.) 32. Keeping in view the facts and circums…

Gxs India Technology Centre Private Limited, Bangalore vs. DCIT, Bangalore

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

ITA 1041/BANG/2016[2010-11]Status: DisposedITAT Bangalore15 Nov 2017AY 2010-11

Bench: Shri Sunil Kumar Yadav & Shri Arun Kumar Garodia

For Appellant: Shri K.R. Vasudevan, AdvocateFor Respondent: Smt. Padmameenakshi, JCIT (DR)
Section 234DSection 28Section 37(1)

…t case, the issue is different and hence, this judgment is also not applicable in the present case. 10. The next judgment cited before us is the judgment of Hon’ble Apex Court rendered in the case of Aluminium Corporation of India Ltd. Vs. CIT as reported in 86 ITR 11. In that case, the issue in dispute was this as to whether the commission paid to its sole selling agents was allowable because it was disallowed for this reason that during the relevant year, all sales were affected IT(TP)A No. 1041/Bang/2016 Page 6 of 7 by assessee directly and no sales was effected by selling agents and therefore, payments wer…

Rohit Nandlal Trust, Ahmedabad vs. The Income Tax Officer, Ward-3(4), Ahmedabad

In the result, appeal of the assessee is partly allowed

ITA 476/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad09 Oct 2017AY 2009-10

Bench: Shri Rajpal Yadav & Shri N.K. Billaiyaआयकर अपील सं./ Ita No.476 & 477/Ahd/2014 "नधा"रण वष"/Asstt. Year: 2009-2010 & 2010-11

For Appellant: Ms.Urvashi ShodhanFor Respondent: Shri O.P. Meena, Sr.DR
Section 40

…e of the business, therefore it was argued that the disallowance was not in accordance with law. Case laws relied upon were; in the case of CIT vs. Shree Sajjan Mills Ltd. 112 ITD 135 [ITAT Indore ™], in the case of Aluminium Corporation of India Ltd. vs. CIT 86 ITR 11(SC) and in the case of CIT vs. Indo Saudi Services (Travel) (P) Ltd. 310 ITR 306 (Bom.). Respectfully relying upon these decisions and considering the totality of the facts and circumstances of the case, we hereby hold that the Trust has ITA No.476 and 477/Ahd/2014 11 availed the services of these persons, therefore the commission was legitimately…

DCIT, New Delhi vs. M/S. Ajay Enterprises Pvt. Ltd., New Delhi

In the result, the appeals of the assessee for A

ITA 1348/DEL/2013[2008-09]Status: DisposedITAT Delhi31 Jul 2017AY 2008-09

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

For Appellant: A.Y. 2008-09For Respondent: A.Y. 2008-09
Section 41(1)

…de the quantum of payment. Following further judgments support this view:- 1. Sasoon J. David & NCo. Pvt. Ltd. Vs. CIT 118 ITR 261 (SC). 2. CIT Vs. Walchand & Co. 65 ITR 381 (SC). 3. J. K. Woolen Mills Vs. CIT 72 ITR 612 (SC). 4. Aluminium Corporation Vs. CIT 86 ITR 11 (SC). 5. CIT Vs. Delhi Safe Deposit 133 ITR 756 (SC). 6. SA Builders Ltd. Vs. CIT 288 ITR 1 (SC). ITA Nos. 898 & 899 and 1348 & 1349/Del./2013 25 4. Further, the AO has invoked Section 40A(2) for the sales made to sister concern. Section 40A(2) does not involve sale/revenue, but it is for expenses incurred. Moreover, the cost paid by the sister c…

Ajay Enterprises Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeals of the assessee for A

ITA 898/DEL/2013[2008-09]Status: DisposedITAT Delhi31 Jul 2017AY 2008-09

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

For Appellant: A.Y. 2008-09For Respondent: A.Y. 2008-09
Section 41(1)

…de the quantum of payment. Following further judgments support this view:- 1. Sasoon J. David & NCo. Pvt. Ltd. Vs. CIT 118 ITR 261 (SC). 2. CIT Vs. Walchand & Co. 65 ITR 381 (SC). 3. J. K. Woolen Mills Vs. CIT 72 ITR 612 (SC). 4. Aluminium Corporation Vs. CIT 86 ITR 11 (SC). 5. CIT Vs. Delhi Safe Deposit 133 ITR 756 (SC). 6. SA Builders Ltd. Vs. CIT 288 ITR 1 (SC). ITA Nos. 898 & 899 and 1348 & 1349/Del./2013 25 4. Further, the AO has invoked Section 40A(2) for the sales made to sister concern. Section 40A(2) does not involve sale/revenue, but it is for expenses incurred. Moreover, the cost paid by the sister c…

Globex Energia P.Ltd, Mumbai vs. Asst CIT 6(3), Mumbai

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

ITA 1109/MUM/2014[2010-11]Status: DisposedITAT Mumbai18 Nov 2016AY 2010-11

Bench: Shri Amit Shukla & Shri Ashwani Tanejaassessment Year: 2010-11 Globex Energia P. Ltd. Acit 6(3) 4Th Floor, Sadhna House, 570 Mumbai- बनाम/ Pandurang Budhkar Marg, Vs. Behind Mahindra Towr, S. Worli Mumbai-400018 (Appellant) (Respondent ) P.A. No.Aadcg1161C Appellant By Shri Nishant Thakkar & Mis. Jasmin Amalsadvala (Ar) Revenue By Shri Prakash Mane (Dr) सुनवाई क" तार"ख/Date Of Hearing: 09/11/2016 18/11/2016 आदेश क" तार"ख /Date Of Order:

Section 143(1)Section 143(3)

…Ltd. (84 ITR 508,516) (Guj) 4. Security Printers of India Pvt. Ltd. (78 ITR 766,774) (All) 5. Tatasons Ltd. (18 ITR 460,467) (Bom) 6. Walchand & Co. P. Ltd.(65 ITR 381, 385) (SC) 7. J.K. Woolen Manufactures (72 ITR 612) (SC) 8. Aluminium Corp. of India Ltd. (86 ITR 11, 17) (SC) 9. Orissa Cement Ltd. (73 ITR 14, 17) (Del) In following cases it has been held that expenses shall become deductible after setting up of the business, even if commencement of business has not yet taken place: 1.CIT Vs. Ralliwolf Ltd. (121 ITR 262) (Bom) 2.Saurashtra Cement & Chemical Industries Ltd. (91 ITR 170) (Guj) 3.Western India V…

Hero Motocorp Limited, New Delhi vs. JCIT, New Delhi

In the result appeal of the assessee in ITA No

ITA 1545/DEL/2015[2010-11]Status: DisposedITAT Delhi24 Oct 2016AY 2010-11

Bench: Sh. I. C. Sudhir & Shri Prashant Maharishihero Motocorp Limited, Jcit, 34, Basant Lok, Vasant Range-1, New Delhi Vs. Vihar, New Delhi Pan: Aaach0812J (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community Vs. New Delhi Centre, Basant Lok, Vasant Vihar, New Delhi-110057 (Appellant) (Respondent) Dcit, M/S. Hero Moto Corp. Circle-11(1), Ltd., 34, Community

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Sh. NC Sawain, CIT DR
Section 143Section 143(3)Section 144CSection 92C

…commercial / business expediency, the same is allowable as business deduction under section 37(1) of the Act: (i) CIT vs. Walchand& Co.: 65 ITR 381 (SC) (ii) J.K. Woollen Manufacturers vs. CIT: 72 ITR 612(SC) (iii)Aluminium Corporation of India Ltd. vs. CIT: 86 ITR 11 (SC) (iv) CIT vs. PanipatWoollen& General Mills Co. Ltd.: 103 ITR 666 (SC) (v) S.A. Builders: 288 ITR 1(SC) (vi) J.J. Enterprises v. CIT: 254 ITR 216 (SC) Hero MotoCorp Limited Vs. JCIT & DCIT Vs. Hero MotoCorp Ltd. ITA Nos. 1545/Del/2015 and 2424/Del/2015 (AY 2010-11) ITA No. 1609/Del/2016 and 914/Del/2016 (AY 2011-12) Page 415 of 484 (vii) CIT v…

ACIT 19(2), Mumbai vs. Reliance Capital Partners, Mumbai

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

ITA 1024/MUM/2014[2009-10]Status: DisposedITAT Mumbai26 Feb 2016AY 2009-10

Bench: Shri B.R. Baskaran (Am) & Shri Ram Lal Negi (Jm)

For Appellant: Shri Jitendra SanghaviFor Respondent: Shri B.S. Bist (Sr. DR)
Section 40A(2)(b)

…ssessee. The assessee also placed reliance on the following case laws in support of its contentions:- (a) CIT Vs. Walchand and Co. (P) Ltd (65 ITR 381)(SC) (b) J.K. Woollen Manufacturers Vs. CIT (72 ITR 612)(SC) (c) Aluminium Corporation of India Ltd Vs. CIT (86 ITR 11)(SC) (d) CIT Vs. Oracle India Pvt Ltd (11 Taxmann.com 139)(Delhi) (e) J.K. Industries Ltd Vs. CIT (11 Taxmann.com 72)(Cal) (f) Jamshedpur Motor Accessories Stores Vs. CIT (95 ITR 664)(Patna) (g) CIT Vs. Shree Panchaganga Sahakari Sakhar Karkhana (118 Taxmann 122)(Bom) 4. The Ld CIT(A) was convinced with the contentions of the assessee and accordin…

Bses Rajdhani Power Ltd., New Delhi vs. ACIT, New Delhi

The appeal is partly allowed

ITA 3688/DEL/2011[2005-06]Status: DisposedITAT Delhi05 Oct 2015AY 2005-06

Bench: Shri I.C. Sudhir & Shri Inturi Rama Rao Assessment Year : 2005-06 Bses Rajdhani Power Ltd., Vs. Assistant Cit, Bses Bhawan, Nehru Place, Circle-3(1), New Delhi. New Delhi. (Pan: Aagcs3187H) (Appellant) (Respondent) Assessment Year: 2005-06 Deputy Cit, Vs. Bses Rajdhani Power Ltd., Circle 3(1), Bses Bhavan, Nehru Place, New Delhi. New Delhi. (Pan: Aagcs3187H) (Appellant) (Respondent) Assessment Year : 2006-07 Bses Rajdhani Power Ltd., Vs. Assistant Cit, Bses Bhawan, Nehru Place, Circle-3(1), New Delhi. New Delhi. (Pan: Aagcs3187H) (Appellant) (Respondent) Assessment Year: 2006-07 Deputy Cit, Vs. Bses Rajdhani Power Ltd., Circle 3(1), Bses Bhavan, Nehru Place, New Delhi. New Delhi. (Pan: Aagcs3187H) (Appellant) (Respondent)

Section 154

…e. 36.19 In support of above submissions, the Learned AR placed reliance on the following decisions: - CIT vs. Walchand and Co. Private Ltd.: 65 ITR 381 (SC) - J.K. Woollen Manufacturers vs. CIT: U.P: 72 ITR 612 (SC) - Aluminium Corpn. of India Ltd. vs. CIT: 86 ITR 11 (SC ) - CIT vs. United Hotels Ltd.: 177 Taxman 417 (Delhi) - CIT vs S. Krishna Rao : 76 ITR 664 (AP) - CIT v. Udaipur Distillery Co. Ltd: 316 ITR 426 (Raj. HC) - ACIT vs. Doon Valley Motors: 10 SOT 525 (Del Tr.) - Hero Motor Corp Ltd. vs. ACIT: 156 TTJ 139 (Del. Tri.) 36.20 Without prejudice to the above, the Learned AR further submitted, that even…

Shriram Capital Limited, Chennai vs. DCIT, Chennai

In the result, the appeals filed by the assessee in ITA Nos

ITA 513/CHNY/2015[2011-2012]Status: DisposedITAT Chennai25 Jun 2015AY 2011-2012

Bench: Shri Chandra Poojari & Shri Challa Nagendra Prasadआयकर अपील सं./ I.T.A. Nos.512 &513 /Mds/2015 ("नधा"रण वष" / Assessment Year : 2010-2011 & 2011- 2012)

For Appellant: Shri. R. Sivaraman, AdvocateFor Respondent: Shri. N. Rengaraj, IRS, CIT
Section 14A

…rom the point of view of the businessmen and the commercial expediency is a matter entirely left to the judgment of the assessee as held by Madras High Court in the case of Amarjothi pictures vs. CIT 69 ITR 755 and Aluminium Corporation of India Ltd vs. CIT 86 ITR 11(SC). In our opinion, the businessman is only the best judge to determine the business expediency and therefore when he claims that he has incurred certain expenditure for the business expediency, his version is ordinarily be accepted. Further, it does not mean that the Assessing Officer cannot be entitled to enquire or investigate as to whether…

Shriram Capital Limited, Chennai vs. DCIT, Chennai

In the result, the appeals filed by the assessee in ITA Nos

ITA 512/CHNY/2015[2010-2011]Status: DisposedITAT Chennai25 Jun 2015AY 2010-2011

Bench: Shri Chandra Poojari & Shri Challa Nagendra Prasadआयकर अपील सं./ I.T.A. Nos.512 &513 /Mds/2015 ("नधा"रण वष" / Assessment Year : 2010-2011 & 2011- 2012)

For Appellant: Shri. R. Sivaraman, AdvocateFor Respondent: Shri. N. Rengaraj, IRS, CIT
Section 14A

…rom the point of view of the businessmen and the commercial expediency is a matter entirely left to the judgment of the assessee as held by Madras High Court in the case of Amarjothi pictures vs. CIT 69 ITR 755 and Aluminium Corporation of India Ltd vs. CIT 86 ITR 11(SC). In our opinion, the businessman is only the best judge to determine the business expediency and therefore when he claims that he has incurred certain expenditure for the business expediency, his version is ordinarily be accepted. Further, it does not mean that the Assessing Officer cannot be entitled to enquire or investigate as to whether…