Lord Thankerton in Hughes v. Bank of New Zealand

6 ITR 636Reported decision1938#2650 most cited

What is Lord Thankerton in Hughes v. Bank of New Zealand authority for?

Expenditure incurred wholly and exclusively for the purpose of business is deductible, even if it is unremunerative or does not yield an immediate profit. The absence of a corresponding receipt does not negate the deductibility of such an expense.

44

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2012 to 2025.

Also referred to as

Hughes v. Bank of New Zealand · Section 37(1) · business expenditure · wholly and exclusively · commercial expediency · unremunerative expense · profit not necessary for deduction · Section 37 · Section 57(iii) · expenditure allowance

Sections most often in play

Section 133(6)Section 142(1)Section 143(2)Section 143(3)Section 250Section 30Section 35DSection 36

Issues it is cited on

section 57(iii)section 57commercial expediencysection 37(1)final assessment ordersection 37section 133(6)income from other sourcesprevious yearsection 143(2)appeal before the tribunaltransfer

Judgments citing Lord Thankerton in Hughes v. Bank of New Zealand

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

…es were incurred wholly and exclusively for the purpose of business therefore, the same deserves to be allowed as claimed. Ld. AR placed reliance on the judgement of House of Lords in the case of Hughes (Inspector of Taxes) Vs. Bank of New Zealand reported in 6 ITR 636. Ld. AR also filed detailed written submission which is reproduced as under: “1.The assessee company was Incorporated to carry on the business of real estate consultancy. The assessee has been maintaining books of account & other connected records, and getting the same audited by a firm of Chartered Accountants. 2. A company named West One Electro…

Assistant Commissioner of Income Tax, Circle-25(1), 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

…es were incurred wholly and exclusively for the purpose of business therefore, the same deserves to be allowed as claimed. Ld. AR placed reliance on the judgement of House of Lords in the case of Hughes (Inspector of Taxes) Vs. Bank of New Zealand reported in 6 ITR 636. Ld. AR also filed detailed written submission which is reproduced as under: “1.The assessee company was Incorporated to carry on the business of real estate consultancy. The assessee has been maintaining books of account & other connected records, and getting the same audited by a firm of Chartered Accountants. 2. A company named West One Electro…

Commissioner of Income Tax vs. Benetton India Pvt. Ltd

ITA/472/2018HC Delhi06 Feb 2025

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

For Appellant: Mr. Shlok Chandra, SSC with Ms. MadhviFor Respondent: Mr. Himanshu S. Sinha, Mr. Prashant
Section 143(1)Section 260ASection 92BSection 92C

…Page 39 of 41 further observed that the rule that expenditure can only be justified if there is corresponding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes v. Bank of New Zealand (1938) 6 ITR 636 (HL) that “expenditure in the course of the trade which is unremunerative is none the less a proper deduction if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense”. The question whether an expenditure can be allowed as a deduction only…

Navayuga Infra Projects Private Limited, Hyderabad vs. Asst. Commissioner of Income Tax, Circle-16(1), Hyderabad

In the result, appeal in ITA No

ITA 106/HYD/2020[2016-17]Status: DisposedITAT Hyderabad29 Dec 2023AY 2016-17

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Chary

For Appellant: Shri Mohd. Afzal, ARFor Respondent: Ms. TH. Vijaya Lakshmi, CIT-DR
Section 12(2)Section 57

…and not of the Revenue. It was further observed that the rule that expenditure can only be justified if there is corresponding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes v. Bank of New Zealand, [1938] 6 ITR 636 that "expenditure in the course of the trade which is unremunerative is none the less a proper deduction if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense". The question whether an expenditure can be allowed as a deduction only if it has…

Navayuga Infra Projects Private Limited, Hyderabad vs. Asst. Commissioner of Income Tax, Circle-16(1), Hyderabad

In the result, appeal in ITA No

ITA 1724/HYD/2018[2014-15]Status: DisposedITAT Hyderabad29 Dec 2023AY 2014-15

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Chary

For Appellant: Shri K.C. Devdas, ARFor Respondent: Ms. TH. Vijaya Lakshmi, CIT-DR
Section 37

…India (P.) Ltd. [2019] 111 taxmann.com 450 (Gujarat) which in turn was rendered in the light of the decisions reported in Eastern Investment Ltd. v. CIT, [1951] 20 ITR 1, CIT v. Walchand & Co. etc., [1967] 65 ITR 381 and Hughes v. Bank of New Zealand, [1938] 6 ITR 636, wherein it is held that earning profit in any particular year is not a sine qua non for allowance of any expenditure. 6. We have gone through the record in the light of the submissions made on either side. According to the Memorandum and Articles of Page 3 of 8 ITA Nos. 1723 & 1724/Hyd/2018 Association of the assessee, its business is to invest…

Navayuga Road Projects Private Limited, Hyderabad vs. Asst. Commissioner of Income Tax, Circle-16(1), Hyderabad

In the result, appeal in ITA No

ITA 1723/HYD/2018[2014-15]Status: DisposedITAT Hyderabad29 Dec 2023AY 2014-15

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Chary

For Appellant: Shri K.C. Devdas, ARFor Respondent: Ms. TH. Vijaya Lakshmi, CIT-DR
Section 37

…India (P.) Ltd. [2019] 111 taxmann.com 450 (Gujarat) which in turn was rendered in the light of the decisions reported in Eastern Investment Ltd. v. CIT, [1951] 20 ITR 1, CIT v. Walchand & Co. etc., [1967] 65 ITR 381 and Hughes v. Bank of New Zealand, [1938] 6 ITR 636, wherein it is held that earning profit in any particular year is not a sine qua non for allowance of any expenditure. 6. We have gone through the record in the light of the submissions made on either side. According to the Memorandum and Articles of Page 3 of 8 ITA Nos. 1723 & 1724/Hyd/2018 Association of the assessee, its business is to invest…

Kalburgi Cement Private Limited, Hyderabad vs. DCIT Circle -2(1), Hyderabad

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 573/HYD/2022[2018-19]Status: DisposedITAT Hyderabad15 May 2023AY 2018-19

Bench: Shri Rama Kanta Panda & Shri Laliet Kumar

For Appellant: Sri Kalyanasundaram, C.AFor Respondent: Sri Jeevan Lal Lavidiya
Section 142(1)Section 143(2)Section 143(3)Section 144BSection 263Section 270ASection 92C

…and not of the Revenue. It was further observed that the rule that expenditure can only be justified if there is corresponding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes v. Bank of New Zealand, [1938] 6 ITR 636 that "expenditure in the course of the trade which is unremunerative is none the less a proper deduction if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense". The question whether an expenditure can be allowed as a deduction only if it has…

DCIT, New Delhi vs. M/S. Sahara India Ltd., Lucknow

In the result, Revenue’s appeal stands dismissed

ITA 2728/DEL/2012[2005-06]Status: DisposedITAT Delhi06 Apr 2023AY 2005-06
For Appellant: Shri J.J. Mehrotra, FCAFor Respondent: Shri Kanv Bali, Sr. DR
Section 37

…td., 6 TC 501 (C.Cess) [1906] Lord Pearson observed at page 507 that the statue did not require the party claiming deduction to show that any profit was in fact earned by the expenditure in question In Hughes (Inspector of Taxes) v. Bank of New Zealand [1938] 6 ITR 636 (HL) , Lord Thankerton observed at page 644 that" expenditure in course of the trade which is unremunerative is non-the-less a proper 5 ITA No.2728/Del./2012 deduction if wholly and exclusively made for the purposes of the trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense." 4.7 Thus in…

The Jt. Comm of Income Tax (OSD) Cent .Cir-6(4), Mumbai vs. M/S D''Decor Properties LLP, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 1743/MUM/2021[2018-19]Status: DisposedITAT Mumbai27 May 2022AY 2018-19

Bench: This Extended Date, Accordingly, We Hold That There Is No Delay In Filing Of Appeal By The Revenue.

Section 132(1)Section 143(2)Section 143(3)

…or depreciation. There is no requirement of income getting generated out of such asset. Reliance in this regard had been rightly placed by the ld. AR on the House of Lords Judgement in the case of Hughes (Inspector of Taxes) vs. Bank of Newzealand reported in 6 ITR 636 (HL) dated 04/03/1938 wherein it was held in para 10 as under:- (10……….”3. In computing the amount of the profits or gains to be charged, no sum shall be deducted in respect of (a) any disbursements or expenses, not being money wholly and exclusively laid out or expended for the purposes of the trade, profession, employment or vocation.” In order…

Madanlal Mulchandas Jariwala, Surat vs. Income Tax Officer, Ward-2(2)(3), Surat

In the result, appeal filed by the assessee is allowed

ITA 388/SRT/2019[2015-16]Status: DisposedITAT Surat20 Jan 2022AY 2015-16

Bench: Shri Pawan Singh, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.388/Srt/2019 (िनधा"रणवष" / Assessment Years: (2015-16) (Virtual Court Hearing) Madanlal Mulchandas Jariwala, Vs. The Ito, Ward-2(2)(3), 4512, Ganchisheri Begampura, Surat. Surat-395003. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Abbpj5168J (Assessee) (Respondent) Assessee By:Shri Mehul R. Shah, Ca Revenue By:Ms Anupama Singla, Sr. Dr सुनवाईक"तारीख/ Date Of Hearing : 18/11/2021 घोषणाक"तारीख/Date Of Pronouncement : 21/01/2022 आदेश / O R D E R Per Dr. A. L. Saini: Captioned Appeal Filed By The Assessee, Pertaining To Assessment Year (Ay) 2015-16, Is Directed Against The Order Passed By The Learned Commissioner Of Income Tax (Appeals)-1,Surat [In Short “The Ld. Cit(A)”] In Appeal No. Cit(A), Surat-1/10530/2017-18 Dated 18.07.2019, Which In Turn Arises Out Of An Order Passed By The Assessing Officer Under Section143(3)Of The Income Tax Act, 1961 [Hereinafter Referred To As The “Act”].

For Appellant: Shri Mehul R. Shah, CAFor Respondent: Ms Anupama Singla, Sr. DR
Section 143(3)Section 44ASection 57

…d be given a narrow and constricted meaning not warranted by the language of the section and, in fact, contrary to such language. This view which we are taking is clearly supported by the observations of Lord Thankerton in Hughes v. Bank of New Zealand [1938] 6 ITR 636, 644 (HL), where the learned Law Lord said: "Expenditure in course of the trade which is unremunerative is none the less a proper deduction, if wholly and exclusively made for the purposes of the trade. It does not require the presence of a receipt on the credit | side to justify the deduction of an expense." We find that the same view has been tak…

Gbt India Private Limited, Delhi vs. National E-Assesment Centre, New Delhi

In the result, the appeal of the assessee is allowed and Stay application is accordingly held to be infructuous

ITA 462/DEL/2021[2016-17]Status: DisposedITAT Delhi06 Jan 2022AY 2016-17

Bench: Shri G.S. Pannu & Shri Amit Shukla(Through Video Conferencing)

For Appellant: Shri Himanshu Sinha, Adv. &For Respondent: Shri Surendra Pal
Section 143(3)Section 144C(13)

…and not of the Revenue. It was further observed that the rule that expenditure can only be justified if there is corresponding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes v. Bank of New Zealand, (1938) 6 ITR 636 that "expenditure in the course of the trade which is un remunerative is none the less a proper deduction if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense". The question whether an expenditure can be allowed as a deduction only if it has…

Indus Mobile Distribtion Pvt. Ltd., Chennai vs. ACIT Central Circle 1(1), Chennai

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

ITA 915/CHNY/2019[2011-12]Status: DisposedITAT Chennai16 Sept 2021AY 2011-12

Bench: Shri Duvvuru Rl Reddy & Shri G. Manjunathaआयकर अपील सं./I.T.A. No. 915/Chny/2019 िनधा"रण वष"/Assessment Year: 2011-12 M/S. Indus Mobile Distribution Pvt. Ltd., The Assistant Commissioner Of No. 281, Ttk Road, Alwarpet, Vs. Income Tax, Central Circle 1(1), Chennai 600 018. Chennai. [Pan:Aabci6304D] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri B. Ramakrishnan, C.A. ""थ" की ओर से/Respondent By : Shri G. Johnson, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 01.09.2021 घोषणा की तारीख /Date Of Pronouncement : 16.09.2021 आदेश /O R D E R Per Duvvuru Rl Reddy: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 13, Chennai, Dated 22.11.2017 Relevant To The Assessment Year 2011-12. The Effective Grounds Raised In The Appeal Relate To Confirmation Of Disallowance Of Depreciation On Trademark & Confirmation Of Disallowance Of Advertisement Expenditure & Professional Charges.

For Appellant: Shri B. Ramakrishnan, C.AFor Respondent: Shri G. Johnson, Addl. CIT

…nue. It was further observed that the rule that expenditure can only be justified if there is corresponding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes (Inspector of Taxes) v. Bank of New Zealand [1938] 6 ITR 636 (HL) that "expenditure in the course of the trade which is unremunerative is none the less a proper deduction, if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense". The question whether an expenditure can be allowed as a deduction only if i…

M/S Reckitt Benckiser (I) Pvt. Ltd., Kolkata vs. DCIT, Cir-12(1), Kolkata

In the result, Appeals of the assessee are partly allowed for statistical purposes whereas Appeals of the revenue are dismissed to the extent indicated above

ITA 625/KOL/2016[2011-2012]Status: DisposedITAT Kolkata17 Jun 2020AY 2011-2012

Bench: Shri S.S.Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.404/Kol/2015 आयकरअपीलसं./Ita No.625/Kol/2016 ("नधा"रणवष" / Assessment Year: 2010-11 To 2011-12)

For Appellant: Shri Deepak Chopra, Advocate & Shri Rohan Khare, AdvocateFor Respondent: Dr. P. K Srihari, CIT(DR)

…ding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes v. Bank of New Reckitt Benckiser (I) Pvt. Ltd. ITA Nos.404 & 529/Kol/2015 ITA Nos. 625 & 518/Kol/2016 Assessment Years:2010-11 to 2011-12 Zealand, (1938) 6 ITR 636 that “expenditure in the course of the trade which is unremunerative is none the less a proper deduction if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense”. The question whether an expenditure can be allowed as a deduction only if it has…

DCIT, Cir-12(1), Kolkata vs. M/S Reckitt Benckiser (I) Ltd., Kolkata

In the result, Appeals of the assessee are partly allowed for statistical purposes whereas Appeals of the revenue are dismissed to the extent indicated above

ITA 518/KOL/2016[2011-2012]Status: DisposedITAT Kolkata17 Jun 2020AY 2011-2012

Bench: Shri S.S.Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.404/Kol/2015 आयकरअपीलसं./Ita No.625/Kol/2016 ("नधा"रणवष" / Assessment Year: 2010-11 To 2011-12)

For Appellant: Shri Deepak Chopra, Advocate & Shri Rohan Khare, AdvocateFor Respondent: Dr. P. K Srihari, CIT(DR)

…ding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes v. Bank of New Reckitt Benckiser (I) Pvt. Ltd. ITA Nos.404 & 529/Kol/2015 ITA Nos. 625 & 518/Kol/2016 Assessment Years:2010-11 to 2011-12 Zealand, (1938) 6 ITR 636 that “expenditure in the course of the trade which is unremunerative is none the less a proper deduction if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense”. The question whether an expenditure can be allowed as a deduction only if it has…

DCIT, Cir-12(1), Kolkata vs. M/S Reckitt Benckiser (India) Ltd., Kolkata

In the result, Appeals of the assessee are partly allowed for statistical purposes whereas Appeals of the revenue are dismissed to the extent indicated above

ITA 529/KOL/2015[2010-2011]Status: DisposedITAT Kolkata17 Jun 2020AY 2010-2011

Bench: Shri S.S.Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.404/Kol/2015 आयकरअपीलसं./Ita No.625/Kol/2016 ("नधा"रणवष" / Assessment Year: 2010-11 To 2011-12)

For Appellant: Shri Deepak Chopra, Advocate & Shri Rohan Khare, AdvocateFor Respondent: Dr. P. K Srihari, CIT(DR)

…ding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes v. Bank of New Reckitt Benckiser (I) Pvt. Ltd. ITA Nos.404 & 529/Kol/2015 ITA Nos. 625 & 518/Kol/2016 Assessment Years:2010-11 to 2011-12 Zealand, (1938) 6 ITR 636 that “expenditure in the course of the trade which is unremunerative is none the less a proper deduction if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense”. The question whether an expenditure can be allowed as a deduction only if it has…

Reckitt Denckiser (India) Ltd., Kolkata vs. DCIT, Cir-12(1), Kolkata

In the result, Appeals of the assessee are partly allowed for statistical purposes whereas Appeals of the revenue are dismissed to the extent indicated above

ITA 404/KOL/2015[2010-2011]Status: DisposedITAT Kolkata17 Jun 2020AY 2010-2011

Bench: Shri S.S.Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.404/Kol/2015 आयकरअपीलसं./Ita No.625/Kol/2016 ("नधा"रणवष" / Assessment Year: 2010-11 To 2011-12)

For Appellant: Shri Deepak Chopra, Advocate & Shri Rohan Khare, AdvocateFor Respondent: Dr. P. K Srihari, CIT(DR)

…ding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes v. Bank of New Reckitt Benckiser (I) Pvt. Ltd. ITA Nos.404 & 529/Kol/2015 ITA Nos. 625 & 518/Kol/2016 Assessment Years:2010-11 to 2011-12 Zealand, (1938) 6 ITR 636 that “expenditure in the course of the trade which is unremunerative is none the less a proper deduction if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense”. The question whether an expenditure can be allowed as a deduction only if it has…

Indus Mobile Distribution P Ltd., Chennai vs. ACIT Central Circle 1(1), Chennai

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

ITA 969/CHNY/2019[2015-16]Status: DisposedITAT Chennai18 Feb 2020AY 2015-16

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Mr. S.Bharath, CITFor Respondent: 20.11.2019
Section 139(1)

…nue. It was further observed that the rule that expenditure can only be justified if there is corresponding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes (Inspector of Taxes) v. Bank of New Zealand [1938] 6 ITR 636 (HL) that "expenditure in the course of the trade which is unremunerative is none the less a proper deduction, if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense". The question whether an expenditure can be allowed as a deduction only if i…

Indus Mobile Distribution P Ltd., Chennai vs. ACIT Central Circle 1(1), Chennai

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

ITA 968/CHNY/2019[2008-09]Status: DisposedITAT Chennai18 Feb 2020AY 2008-09

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Mr. S.Bharath, CITFor Respondent: 20.11.2019
Section 139(1)

…nue. It was further observed that the rule that expenditure can only be justified if there is corresponding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes (Inspector of Taxes) v. Bank of New Zealand [1938] 6 ITR 636 (HL) that "expenditure in the course of the trade which is unremunerative is none the less a proper deduction, if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense". The question whether an expenditure can be allowed as a deduction only if i…

Indus Mobile Distribution P Ltd., Chennai vs. ACIT Central Circle 1(1), Chennai

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

ITA 967/CHNY/2019[2007-08]Status: DisposedITAT Chennai18 Feb 2020AY 2007-08

Bench: Shri N.R.S. Ganesan & Shri S. Jayaraman

For Appellant: Mr. S.Bharath, CITFor Respondent: 20.11.2019
Section 139(1)

…nue. It was further observed that the rule that expenditure can only be justified if there is corresponding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes (Inspector of Taxes) v. Bank of New Zealand [1938] 6 ITR 636 (HL) that "expenditure in the course of the trade which is unremunerative is none the less a proper deduction, if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense". The question whether an expenditure can be allowed as a deduction only if i…

Gbt India Private Limited, Delhi vs. ACIT, Circle-10(1), New Delhi

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

ITA 8965/DEL/2019[2015-16]Status: DisposedITAT Delhi31 Jan 2020AY 2015-16

Bench: Shri N.K. Billaiya & Shri N.K. Choudhary[Assessment Year: 2015-16]

For Appellant: Shri Himanshu S. Sinha, AdvFor Respondent: Shri Surendra Pal, CIT- DR
Section 143(3)

…and not of the Revenue. It was further observed that the rule that expenditure can only be justified if there is corresponding increase in the profits was erroneous. It has been classically observed by Lord Thankerton in Hughes v. Bank of New Zealand, (1938) 6 ITR 636 that "expenditure in the course of the trade which is unremunerative is none the less a proper deduction if wholly and exclusively made for the purposes of trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense". The question whether an expenditure can be allowed as a deduction only if it has…