Kedarnath Jute Manufacturing Co. Ltd. v. Commissioner of Income Tax (Central), Calcutta

3 SCC 252Reported decision1972#7388 most cited

What is Kedarnath Jute Manufacturing Co. Ltd. v. Commissioner of Income Tax (Central), Calcutta authority for?

Deductions for business expenditure are allowable in the year an ascertained legal liability accrues, even if payment is made later, unless Section 43B applies.

15

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2014 to 2024.

Also referred to as

Kedarnath Jute Manufacturing Co. Ltd. v. CIT · mercantile system of accounting · section 43B · ascertained liability · deduction · previous year · accrual of income

Issues it is cited on

mercantile system of accountingprofits and gains of business or professionrevenue expendituresection 43section 37(1)section 37previous yeartransfercompanysection 14section 143(3)india

Judgments citing Kedarnath Jute Manufacturing Co. Ltd. v. Commissioner of Income Tax (Central), Calcutta

M/s.Tata Teleservices Limited vs. Dy. Commissioner of Income Tax

ITTA/163/2018HC Telangana03 Sept 2024

Bench: SUJOY PAUL,NAMAVARAPU RAJESHWAR RAO

M/S Asian Hotels Ltd vs. Commissioner of Income Tax

The appeal is disposed of in the aforesaid terms

ITA/1398/2006HC Delhi09 Oct 2023

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 37

…gning Date:10.10.2023 11:32:37 Signature Not Verified ITA 1398/2006 Page 23 of 29 following observations of the Supreme Court in the judgement rendered in Kedarnath Jute Mfg. Co. Ltd. v Commissioner of Income Tax, (Central), Calcutta (1972) 3 SCC 252, being apposite, are extracted below: “8. The main contention of the learned Solicitor-General is that the assessee failed to debit the liability in its books of accounts and, therefore, it was debarred from claiming the same as deduction either under Section 10(1) or under Section 10(2)(xv) of the Act. We are wholly unable to appreciate th…

DCIT-2(3), Mumbai vs. M/S. Zensar Technologies Ltd., Mumbai

In the result, the appeal is partly allowed

ITA 5653/MUM/2009[2004-05]Status: DisposedITAT Mumbai19 Apr 2023AY 2004-05

Bench: Amit Shukla () & Ms. Padmavathy S. ()

Section 10ASection 80Section 92

…ssessee, it chose to claim the entire expenditure in the year in which it was spent/paid by invoking the provisions of Section 36(1)(iii) of the Act. Once a return in that manner was filed, the AO was bound to carry out the assessment by applying the 3 (1972) 3 SCC 252 4 (1997) 6 SCC 117 5 (1978) 4 SCC 358 6 (1999) 8 SCC 338 Civil Appeal Nos. 6366-6368 of 2003 and provisions of that Act and not to go beyond the said return. There is no estoppel against the 12 ITA 5653/Mum/2009 M/s Zensar Technologies Ltd Statute and the Act enables and entitles the assessee to claim the entire expenditure in the manner it is clai…

Assistant Commissioner of Income Tax Circle - 1, Bellary vs. M/S Auro Minerals, Hospet

In the result, appeal of the Revenue is partly allowed and that of the Assessee allowed

ITA 1543/BANG/2018[2012-13]Status: DisposedITAT Bangalore18 May 2022AY 2012-13

Bench: Shri N. V. Vasudevan & Ms. S. Padmavathy

For Appellant: Shri. Percy Pardiwala, Sr. AdvocateFor Respondent: Shri. Srinivas T. Bidari, CIT(DR)(ITAT), Bengaluru
Section 143(3)

…e against such a demand does not ruin the incurring of liability. In Haji Lal Mohd. Biri Works v. CIT (1997) 3 SCC 659 SC it was explained by referring ITA Nos.1543, 1329/Bang/2016 Page 33 of 38 to the decisions in Kedarnath Jute Mfg. Co. Ltd. v. CIT (1972) 3 SCC 252 and CIT v. Kalinga Tubes Ltd. (1996) 2 SCC 277 that "when the Assessee is following mercantile system of accounting, in case of sales tax payable by the Assessee, the liability to pay sales tax would accrue the moment the dealer made sales which are subject to sales tax and, at that stage, the obligation to pay the sales tax arises and the raising…

M/S Auro Minerals, Hospet vs. Joint Commissionerof Income Tax Bellary Range, Bellary

In the result, appeal of the Revenue is partly allowed and that of the Assessee allowed

ITA 1329/BANG/2018[2012-13]Status: DisposedITAT Bangalore18 May 2022AY 2012-13

Bench: Shri N. V. Vasudevan & Ms. S. Padmavathy

For Appellant: Shri. Percy Pardiwala, Sr. AdvocateFor Respondent: Shri. Srinivas T. Bidari, CIT(DR)(ITAT), Bengaluru
Section 143(3)

…e against such a demand does not ruin the incurring of liability. In Haji Lal Mohd. Biri Works v. CIT (1997) 3 SCC 659 SC it was explained by referring ITA Nos.1543, 1329/Bang/2016 Page 33 of 38 to the decisions in Kedarnath Jute Mfg. Co. Ltd. v. CIT (1972) 3 SCC 252 and CIT v. Kalinga Tubes Ltd. (1996) 2 SCC 277 that "when the Assessee is following mercantile system of accounting, in case of sales tax payable by the Assessee, the liability to pay sales tax would accrue the moment the dealer made sales which are subject to sales tax and, at that stage, the obligation to pay the sales tax arises and the raising…

DCIT, CC-2(2), Chennai vs. M/S. Hinduja Leyland Finance Ltd., Chennai

In the result, the appeal filed by Revenue is dismissed

ITA 3003/CHNY/2019[2016-17]Status: DisposedITAT Chennai01 Mar 2021AY 2016-17

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

For Appellant: Mr.R.Sathyanarayanan, C.A ""For Respondent: 11.02.2021

…y and exclusively for the purpose of business of the assessee. The learned AR further submitted that it is well settled principle of law by the decision of Hon'ble Supreme 17 Court in the case of M/s. Kedarnath Jute Manufacturing Company Ltd. Vs CIT (1972) 3 SCC 252, where it was categorically held that entries in books of account is not determinative to decide allowablity of expenses or recognition of income and what is relevant is nature of expenses and relevance of such expenses in the business of the assessee . In this case, assessee has incurred various expenditure in connection with business activity o…

DCIT 4(3)(2), Mumbai vs. M/S.Shinano Retail Private Limited, Mumbai

In the result, the appeal of the Revenue is dismissed and the cross objection of the assessee is allowed

ITA 1205/MUM/2019[2012-13]Status: DisposedITAT Mumbai08 Jan 2021AY 2012-13

Bench: Shri Rajesh Kumar & Shri Ram Lal Negiassessment Year: 2012-13

For Appellant: Shri Vijay Mehta, A.RFor Respondent: Shri Sandeep Raj, D.R

…It has been held repeatedly by this Court that entries in the books of accounts are not determinative or conclusive and the matter is to be examined on the touchstone of provisions contained in the Act [See Kedarnath Jute Manufacturing Co. Ltd. vs. CIT (1972) 3 SCC 252; Tuticorin Alkali Chemicals & Fertilizers Ltd. vs. CIT (1997) 141 CTR (SC) 387 : (1997) 6 SCC 117, Sutlej Cotton Mills Ltd. vs. CIT 1978 CTR (SC) 155 : (1978) 4 SCC 358 and United Commercial Bank vs. CIT (1999) 156 CTR (SC) 380 : (1999) 8 SCC338]." 4.7 Thus, the settled position is that the income has to be computed as per the Income Tax Law and th…

DCIT, New Delhi vs. M/S. Ge Capital Services India Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 762/DEL/2016[2009-10]Status: DisposedITAT Delhi11 Jun 2018AY 2009-10

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri S.S. Rana, CIT-DRFor Respondent: Shri Suchit Jolly, Adv
Section 14A

…t entries in the books of accounts are not determinative or conclusive and the matter is to be examined on the touchstone of provisions contained in the Act [See - Kedarnath Jute Manufacturing Co. Ltd. v. Commissioner of Income Tax (Central), Calcutta, (1972) 3 SCC 252; Tuticorin Alkali Chemicals & Fertilizers Ltd., Madras v. Commissioner of Income Tax, Madras, (1997) 6 SCC 117 ; Sutlej Cotton Mills Ltd. v. Commissioner of Income Tax, Calcutta, (1978) 4 SCC 358; and United Commercial Bank, Calcutta v. Commissioner of Income Tax, WB-III, Calcutta, (1999) 8 SCC 338]. 20) At the most, an inference can be drawn that…

DCIT, New Delhi vs. M/S. Ge Capital Services India Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 761/DEL/2016[2008-09]Status: DisposedITAT Delhi11 Jun 2018AY 2008-09

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri S.S. Rana, CIT-DRFor Respondent: Shri Suchit Jolly, Adv
Section 14A

…t entries in the books of accounts are not determinative or conclusive and the matter is to be examined on the touchstone of provisions contained in the Act [See - Kedarnath Jute Manufacturing Co. Ltd. v. Commissioner of Income Tax (Central), Calcutta, (1972) 3 SCC 252; Tuticorin Alkali Chemicals & Fertilizers Ltd., Madras v. Commissioner of Income Tax, Madras, (1997) 6 SCC 117 ; Sutlej Cotton Mills Ltd. v. Commissioner of Income Tax, Calcutta, (1978) 4 SCC 358; and United Commercial Bank, Calcutta v. Commissioner of Income Tax, WB-III, Calcutta, (1999) 8 SCC 338]. 20) At the most, an inference can be drawn that…

Rajat Makan, Delhi vs. ITO, New Delhi

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

ITA 958/DEL/2017[2012-13]Status: DisposedITAT Delhi16 Oct 2017AY 2012-13

Bench: Shri B.P. Jain

For Appellant: Shri Kapil Goel, AdvFor Respondent: Shri T. Vasanthan Sr. DR
Section 143Section 40

…hat entries in the books of account are not determinative or conclusive and the matter is to be examined on the touchstone of provisions contained in the Act [See – Kedarnath Jute Manufacturing Co. Ltd. v. Commissioner of Income Tax (Central), Calcutta [1972] 3 SCC 252; Tuticorin Alkali Chemicals & Fertilizers Ltd., Madras v. Commissioner of Income Tax, Madras [1997] 6 SCC 117; Sutlej Cotton Mills Ltd. v. Commissioner of Income Tax, Calcutta [1978] 4 SCC 358; and United Commercial Bank, Calcutta v. Commissioner of Income Tax, WB-III, Calcutta [1999] 8 SCC 338”. This principle is squarely applicable to the facts o…

Ask Property Investment Advisors P.Ltd, Mumbai vs. Asst Cir 2(1)(1), Mumbai

In the result, both the appeals of the assessee are allowed

ITA 1810/MUM/2017[2012-13]Status: DisposedITAT Mumbai04 Oct 2017AY 2012-13

Bench: Shri Mahavir Singh, Jm & Shri M.Balaganesh, Am

Section 143(3)

…t entries in the books of accounts are not determinative or conclusive and the matter is to be examined on the touchstone of provisions contained in the Act [See - Kedarnath Jute Manufacturing Co. Ltd. v. Commissioner of Income Tax (Central), Calcutta, (1972) 3 SCC 252; Tuticorin Alkali Chemicals & Fertilizers Ltd., Madras v. Commissioner of Income Tax, Madras, (1997) 6 SCC 117 ; Sutlej Cotton Mills Ltd. v. Commissioner of Income Tax, Calcutta, (1978) 4 SCC 358; and United Commercial Bank, Calcutta v. Commissioner of Income Tax, WB-III, Calcutta, (1999) 8 SCC 338]. 19. At the most, an inference can be drawn that…

National Agricultural Cooperative Marketing Federation of India Ltd vs. Commissioner of Income Tax Delhi, XI & Anr

The appeal is allowed but, in the circumstances, with no order as to

ITA/161/2016HC Delhi19 Apr 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE CHANDER SHEKHAR

Section 260ASection 5

…er and it does not mean that the said order has been wiped out from existence.” (emphasis supplied) 20. In Haji Lal Mohd. Biri Works v. CIT (1997) 3 SCC 659 SC it was explained by referring to the decisions in Kedarnath Jute Mfg. Co. Ltd. v. CIT (1972) 3 SCC 252 and CIT v. Kalinga Tubes Ltd. (1996) 2 SCC 277 that “when the assessee is following mercantile system of accounting, in case of sales tax payable by the assessee, the liability to pay sales tax would accrue the moment the dealer made sales which are subject to sales tax and, at that stage, the obligation to pay the sales tax arises and the rais…

M/S Mangalore Ganesh Beedi Works vs. Commissioner of Income Tax, Mysore

The appeals are disposed of in the above terms

C.A. No.-010547-010548 - 2011Supreme Court15 Oct 2015
Section 35ASection 37

…cifically stated in the Report that the net assets excluded goodwill. The Report calculated goodwill on the super profit method by taking three times the profit for 5 years (30.06.1983 to 30.06.1987). This was then calculated at Rs. 26.10 4 (1993) 3 SCC 252, paragraph 13. 8 Page 9 JUDGMENT crores. It is on this basis that the reserve price for the auction was fixed at Rs.30 crores, as mentioned in the order of 14th June, 1991 passed by the High Court. According to learned counsel for the Revenue, MGBW was already the owner of the trademarks, copyrights and technical know-how and essentially the ri…

M/S Mangalore Ganesh Beedi Works vs. Commissioner of Income Tax, Mysore

The appeals are disposed of in the above terms

C.A. No.-010547-010548 - 2011Supreme Court15 Oct 2015
Section 35ASection 37

…cifically stated in the Report that the net assets excluded goodwill. The Report calculated goodwill on the super profit method by taking three times the profit for 5 years (30.06.1983 to 30.06.1987). This was then calculated at Rs. 26.10 4 (1993) 3 SCC 252, paragraph 13. 8 Page 9 JUDGMENT crores. It is on this basis that the reserve price for the auction was fixed at Rs.30 crores, as mentioned in the order of 14th June, 1991 passed by the High Court. According to learned counsel for the Revenue, MGBW was already the owner of the trademarks, copyrights and technical know-how and essentially the ri…

The Commissioner of Income Tax (Ltu) vs. Dalmia Bharat Sugar and Industries Ltd

ITA/129/2014HC Delhi04 Apr 2014
Section 43B

…The law in this regard is settled that a deduction must be claimed when an ascertained legal liability accrues to the assessee, even if the expenditure in discharge of the liability is made much later. See Kedarnath Jute Manufacturing Co. Ltd. v. CIT, (1972) 3 SCC 252; Pope the King Match Factory v. CIT, [1963] 50 ITR 495, CIT v. Bharat Carbon and Ribbon Manufacturing Co. (1999) 6 SCC 434. The only exception to 2014:DHC:1954-DB ITA 129/2014 Page 4 this principle is Section 43B of the Income Tax Act, which details the limited circumstances in which deductions can be allowed, in the computation of income of the…