Madras Industrial Investment Corporation Ltd. v. CIT

225 ITR 802Supreme Court of India1997#111 most cited

What is Madras Industrial Investment Corporation Ltd. v. CIT authority for?

Expenditure that provides an enduring benefit should be amortized over its useful life, not allowed as a deduction in a single year, to prevent a distorted picture of profits. Specifically, premium paid on debentures for their issue should be amortized on a straight-line method over the life of the debentures.

568

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2008 to 2026.

Also referred to as

Madras Industrial Investment Corporation Ltd. v. CIT · 225 ITR 802 · SC · enduring benefit · amortisation · section 37(1) · revenue expenditure · capital expenditure · premium on debentures · straight line method · matching principle

Sections most often in play

Section 143(3)Section 37(1)Section 153ASection 147Section 153CSection 132Section 14ASection 263
Read the full judgment

Issues it is cited on

enduring benefitsection 32(1)revenue expenditureintangible assetssection 32capital expendituresection 35commercial expediencysection 30book profitsamalgamationmercantile system of accounting

Judgments citing Madras Industrial Investment Corporation Ltd. v. CIT

Spandana Sphoorty Financial Limited, Hyderabad vs. ACIT., Circle 3(2), Hyderabad

ITA 821/HYD/2025[2017-18]Status: DisposedITAT Hyderabad17 Oct 2025AY 2017-18
Section 143(3)Section 145Section 69A

…he assessee company was to be allowed as a deduction in the year of payment itself. Also, support is drawn from a similar view taken by the Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd vs. Commissioner of Income Tax (1997) 225 ITR 802 (SC). Further, reliance is placed on the judgment of the Hon'ble High Court of Delhi in the case of Principal Commissioner of Income Tax vs. Indus Towers Ltd (2023) 459 ITR 719 (Delhi). In the said case, the Hon'ble High Court had observed that the upfront loan processing fee on loan that was claimed by the assessee on the loan raised by it for t…

Mahindra and Mahindra Limited (As Sucessor to Mahindra Two Wheelers Limited Which in Turn Is Sucessor to Mahindra Trucks and Buses Limited), Mumbai vs. Deputy Commissioner of Income Tax Circle 2(2)(1), Mumbai

ITA 4964/MUM/2025[2018-19]Status: DisposedITAT Mumbai25 Sept 2025AY 2018-19
Section 115JSection 143(1)Section 143(3)Section 234ASection 234CSection 250Section 254(1)Section 270ASection 28Section 37

…ional Ltd. Citation: (2009) 308 ITR 199 (Delhi HC) Ratio: Advertisement expenses are revenue in nature; merely improving brand recognition does not convert them into capital expenditure. 5. Madras Industrial Investment Corporation Ltd. v. CIT Citation: (1997) 225 ITR 802 (SC) Relevant Principle: Revenue expenditure may give enduring benefit; spreading over years possible, but does not make it capital. 6. CIT v. Pepsico India Holdings (P.) Ltd. Citation: (2012) 21 taxmann.com 165 (Delhi) Relevant Principle: Expenditure incurred on neon signs and glow signs qualifies for deduction under section 37(1) 7. Asian Pain…

Addl CIT Ltu, Mumbai vs. Bajaj Holding & Investment Ltd ( Foremerly Known As Bajaj Auto Ltd), Mumbai

In the result, appeal filed by the revenue is dismissed and appeal filed by the assessee stands partly allowed as indicated hereinabove

ITA 5510/MUM/2012[2007-08]Status: DisposedITAT Mumbai26 Aug 2025AY 2007-08

Bench: Smt. Beena Pillai () & Shri Renu Jauhri ()

Section 14ASection 80

…ubmitted that leasehold premium is in effect advance rent and as such the proportionate write off is an allowable deduction following the ratio of the decision of the Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd vs C.I.T. (225 ITR 802) wherein in the context of claiming deduction for discount given on debentures issued, the Hon'ble Supreme Court held that the said amount of discount ought to be allowed over the period for which the debentures were issued. Accordingly, the Appellant has claimed the premium over the period for which the lease agreement was entered into by the Ap…

ACIT Circle 25(1), Delhi vs. Tata Teleservices Ltd., Delhi

Accordingly, this issue is raised in grounds of appeal No.4 of the Revenue in all these years is dismissed

ITA 17/DEL/2022[2016-17]Status: DisposedITAT Delhi26 Aug 2025AY 2016-17

Bench: Shri Vikas Awasthy & Shri Manish Agarwalita No.5665/Del/2019 (Assessment Year 2012-13)

Section 37(1)

…tioned across the years. 3.3 On the facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in not following the binding principle enunciated by the Hon'ble Apex Court in case of Madras Industrial Investment Corporation Ltd v CIT [225 ITR 802] and Taparia Tools Ltd v JCIT [372 ITR 606], wherein it was held that amortization of revenue expense is at the option of the Appellant and tax authorities cannot take a contrary view. 4. Initiation of penalty proceedings On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not adjudicating the ground of the Appe…

Tata Teleservices Ltd., New Delhi vs. DCIT, Circle-25(1), New Delhi

Accordingly, this issue is raised in grounds of appeal No.4 of the Revenue in all these years is dismissed

ITA 337/DEL/2021[2016-17]Status: DisposedITAT Delhi26 Aug 2025AY 2016-17

Bench: Shri Vikas Awasthy & Shri Manish Agarwalita No.5665/Del/2019 (Assessment Year 2012-13)

Section 37(1)

…tioned across the years. 3.3 On the facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in not following the binding principle enunciated by the Hon'ble Apex Court in case of Madras Industrial Investment Corporation Ltd v CIT [225 ITR 802] and Taparia Tools Ltd v JCIT [372 ITR 606], wherein it was held that amortization of revenue expense is at the option of the Appellant and tax authorities cannot take a contrary view. 4. Initiation of penalty proceedings On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not adjudicating the ground of the Appe…

DCIT Circle 25(1), New Delhi vs. Tata Teleservices Ltd., New Delhi

Accordingly, this issue is raised in grounds of appeal No.4 of the Revenue in all these years is dismissed

ITA 5927/DEL/2019[2015-16]Status: DisposedITAT Delhi26 Aug 2025AY 2015-16

Bench: Shri Vikas Awasthy & Shri Manish Agarwalita No.5665/Del/2019 (Assessment Year 2012-13)

Section 37(1)

…tioned across the years. 3.3 On the facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in not following the binding principle enunciated by the Hon'ble Apex Court in case of Madras Industrial Investment Corporation Ltd v CIT [225 ITR 802] and Taparia Tools Ltd v JCIT [372 ITR 606], wherein it was held that amortization of revenue expense is at the option of the Appellant and tax authorities cannot take a contrary view. 4. Initiation of penalty proceedings On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not adjudicating the ground of the Appe…

DCIT Circle 25(1), New Delhi vs. Tata Teleservices Ltd., New Delhi

Accordingly, this issue is raised in grounds of appeal No.4 of the Revenue in all these years is dismissed

ITA 5926/DEL/2019[2014-15]Status: DisposedITAT Delhi26 Aug 2025AY 2014-15

Bench: Shri Vikas Awasthy & Shri Manish Agarwalita No.5665/Del/2019 (Assessment Year 2012-13)

Section 37(1)

…tioned across the years. 3.3 On the facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in not following the binding principle enunciated by the Hon'ble Apex Court in case of Madras Industrial Investment Corporation Ltd v CIT [225 ITR 802] and Taparia Tools Ltd v JCIT [372 ITR 606], wherein it was held that amortization of revenue expense is at the option of the Appellant and tax authorities cannot take a contrary view. 4. Initiation of penalty proceedings On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not adjudicating the ground of the Appe…

DCIT Circle - 25(1), New Delhi vs. Tata Teleservices Ltd., New Delhi

Accordingly, this issue is raised in grounds of appeal No.4 of the Revenue in all these years is dismissed

ITA 5925/DEL/2019[2013-14]Status: DisposedITAT Delhi26 Aug 2025AY 2013-14

Bench: Shri Vikas Awasthy & Shri Manish Agarwalita No.5665/Del/2019 (Assessment Year 2012-13)

Section 37(1)

…tioned across the years. 3.3 On the facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in not following the binding principle enunciated by the Hon'ble Apex Court in case of Madras Industrial Investment Corporation Ltd v CIT [225 ITR 802] and Taparia Tools Ltd v JCIT [372 ITR 606], wherein it was held that amortization of revenue expense is at the option of the Appellant and tax authorities cannot take a contrary view. 4. Initiation of penalty proceedings On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not adjudicating the ground of the Appe…

DCIT Circle - 25(1), New Delhi vs. Tata Teleservices Ltd., New Delhi

Accordingly, this issue is raised in grounds of appeal No.4 of the Revenue in all these years is dismissed

ITA 5924/DEL/2019[2012-13]Status: DisposedITAT Delhi26 Aug 2025AY 2012-13

Bench: Shri Vikas Awasthy & Shri Manish Agarwalita No.5665/Del/2019 (Assessment Year 2012-13)

Section 37(1)

…tioned across the years. 3.3 On the facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in not following the binding principle enunciated by the Hon'ble Apex Court in case of Madras Industrial Investment Corporation Ltd v CIT [225 ITR 802] and Taparia Tools Ltd v JCIT [372 ITR 606], wherein it was held that amortization of revenue expense is at the option of the Appellant and tax authorities cannot take a contrary view. 4. Initiation of penalty proceedings On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not adjudicating the ground of the Appe…

Tata Teleservices Ltd., New Delhi vs. ACIT Circle - 25(1), New Delhi

Accordingly, this issue is raised in grounds of appeal No.4 of the Revenue in all these years is dismissed

ITA 5666/DEL/2019[2013-14]Status: DisposedITAT Delhi26 Aug 2025AY 2013-14

Bench: Shri Vikas Awasthy & Shri Manish Agarwalita No.5665/Del/2019 (Assessment Year 2012-13)

Section 37(1)

…tioned across the years. 3.3 On the facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in not following the binding principle enunciated by the Hon'ble Apex Court in case of Madras Industrial Investment Corporation Ltd v CIT [225 ITR 802] and Taparia Tools Ltd v JCIT [372 ITR 606], wherein it was held that amortization of revenue expense is at the option of the Appellant and tax authorities cannot take a contrary view. 4. Initiation of penalty proceedings On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not adjudicating the ground of the Appe…

Tata Teleservices Ltd., New Delhi vs. ACIT Circle - 25(1), New Delhi

Accordingly, this issue is raised in grounds of appeal No.4 of the Revenue in all these years is dismissed

ITA 5665/DEL/2019[2012-13]Status: DisposedITAT Delhi26 Aug 2025AY 2012-13

Bench: Shri Vikas Awasthy & Shri Manish Agarwalita No.5665/Del/2019 (Assessment Year 2012-13)

Section 37(1)

…tioned across the years. 3.3 On the facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in not following the binding principle enunciated by the Hon'ble Apex Court in case of Madras Industrial Investment Corporation Ltd v CIT [225 ITR 802] and Taparia Tools Ltd v JCIT [372 ITR 606], wherein it was held that amortization of revenue expense is at the option of the Appellant and tax authorities cannot take a contrary view. 4. Initiation of penalty proceedings On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not adjudicating the ground of the Appe…

Tata Teleservices Ltd., Noida vs. ACIT, Circle- 25(1), New Delhi

Accordingly, this issue is raised in grounds of appeal No.4 of the Revenue in all these years is dismissed

ITA 4150/DEL/2017[2011-12]Status: DisposedITAT Delhi26 Aug 2025AY 2011-12

Bench: Shri Vikas Awasthy & Shri Manish Agarwalita No.5665/Del/2019 (Assessment Year 2012-13)

Section 37(1)

…tioned across the years. 3.3 On the facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in not following the binding principle enunciated by the Hon'ble Apex Court in case of Madras Industrial Investment Corporation Ltd v CIT [225 ITR 802] and Taparia Tools Ltd v JCIT [372 ITR 606], wherein it was held that amortization of revenue expense is at the option of the Appellant and tax authorities cannot take a contrary view. 4. Initiation of penalty proceedings On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not adjudicating the ground of the Appe…

Dy. Commissioner of Income Tax Circle 10(1), Delhi, Cr Building vs. Indus Towers Limited, Gurgram

ITA 2805/DEL/2023[2011-12]Status: DisposedITAT Delhi08 Aug 2025AY 2011-12

Bench: Shri Yogesh Kumar U.S & Shri Manish Agarwal

Section 142Section 143(3)

…rom the cost of fixed assets and therefore does not claim any tax depreciation thereon. Following the mercantile system of accounting and the law enunciated by the Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd v. CIT [1997] 225 ITR 802 (SC) and Rotork Controls India (P.) Ltd. vs. CIT [2009] 314 ITR 62 (SC), such SRO is amortized over the tenure of the lease and claimed as business expenditure deductible. During the relevant assessment year, the assessee Page | 36 amortized Rs.101,11,00,000 in the books of accounts in respect of site restoration obligation. For the purposes of…

Indus Towers Ltd., Gurugram, Haryana vs. Deputy Commissioner of Income-Tax, Circle 12(1), New Delhi

ITA 2607/DEL/2023[2011-12]Status: DisposedITAT Delhi08 Aug 2025AY 2011-12

Bench: Shri Yogesh Kumar U.S & Shri Manish Agarwal

Section 142Section 143(3)

…rom the cost of fixed assets and therefore does not claim any tax depreciation thereon. Following the mercantile system of accounting and the law enunciated by the Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd v. CIT [1997] 225 ITR 802 (SC) and Rotork Controls India (P.) Ltd. vs. CIT [2009] 314 ITR 62 (SC), such SRO is amortized over the tenure of the lease and claimed as business expenditure deductible. During the relevant assessment year, the assessee amortized Rs.101,11,00,000 in the books of accounts in respect of site restoration obligation. For the purposes of MAT, since…

DCIT Central Circle-28, New Delhi vs. Jindal Itf Limited, New Delhi

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

ITA 1777/DEL/2023[2013-14]Status: DisposedITAT Delhi04 Jun 2025AY 2013-14

Bench: Shri Mahavir Singh & Shri Naveen Chandra

For Appellant: Shri Vinod Kumar Bindal, CAFor Respondent: Shri Dayainder Singh Sidhu, CIT-DR
Section 143(3)

…s per the terms of debenture. It is in the nature of interest as the appellant is liable to pay the amount. The CIT(A), following the decision of the hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd. vs CIT reported in (SC) 225 ITR 802 (1997), held that the liability on account of payment of premium (which is in nature of interest) is allowable deduction, during the year under consideration Page 12 of 20 ITA No. 1777/DEL/2023 [A.Y. 2013-14] The Dy. CI.T. Vs. M/s Jindal ITF Limited and allowed the claim of premium of Rs. 2,01,99,731/- on NCD worth Rs 50 Crore carrying IRR of…

ACIT, Circle-46(1), New Delhi vs. Dabur Invest Corp., Delhi

In the result, appeals of the Revenue are dismissed and appeal

ITA 2454/DEL/2022[2018-19]Status: DisposedITAT Delhi04 Jun 2025AY 2018-19

Bench: Shri Challa Nagendra Prasad & Shri Avdhesh Kumar Mishraिनधा"रणवष"/Assessment Year: 2017-18 बनाम Acit, Dabur Invest Corp., 4Th Floor, Punjab Bhawan, Circle-46(1), Room No.106, Vs. Drum Shape Building, I.P. Estate, New Delhi. New Delhi. Pan No.Aadfd2529D अपीलाथ" Appellant ""यथ"/Respondent िनधा"रणवष"/Assessment Year: 2018-19 बनाम Acit, Dabur Invest Corp., 4Th Floor, Punjab Bhawan, Circle-46(1), Room No.106, Vs. Drum Shape Building, I.P. Estate, New Delhi. New Delhi. Pan No.Aadfd2529D अपीलाथ" Appellant ""यथ"/Respondent िनधा"रणवष"/Assessment Year: 2017-18 बनाम Dabur Invest Corp., Jcit, 4Th Floor, Punjab Bhawan, Vs. Range-46, New Delhi. New Delhi. Pan No.Aadfd2529D अपीलाथ" Appellant ""यथ"/Respondent िनधा"रणवष"/Assessment Year: 2018-19 बनाम Dabur Invest Corp., Jcit, 4Th Floor, Punjab Bhawan, Vs. Range-46, New Delhi. New Delhi. Pan No.Aadfd2529D अपीलाथ" Appellant ""यथ"/Respondent

…to the assessee on time basis and, accordingly, working out that accrued for the current year, reflected by an increase in the option price during the year, brought it to tax. Reliance is placed by it on Madras Industrial Investment Corpn. Ltd. v. CIT [1997] 225 ITR 802/91 Taxman 340 (SC); State Bank of Travancore v. CIT [1986] 158 ITR 102/24 Taxman 337 (SC); and CIT v. A. Gajapathy Naidu [1964] 53 ITR 114 (SC).” [Underline supplied by us] 69. Therefore, only issue before the Coordinate bench in that case was in which year the income accrues. It was not the issue before the coordinate bench that whether the mone…

Dabur Invest Corp, New Delhi vs. JCIT, Range-46, New Delhi

In the result, appeals of the Revenue are dismissed and appeal

ITA 2447/DEL/2022[2017-18]Status: DisposedITAT Delhi04 Jun 2025AY 2017-18

Bench: Shri Challa Nagendra Prasad & Shri Avdhesh Kumar Mishraिनधा"रणवष"/Assessment Year: 2017-18 बनाम Acit, Dabur Invest Corp., 4Th Floor, Punjab Bhawan, Circle-46(1), Room No.106, Vs. Drum Shape Building, I.P. Estate, New Delhi. New Delhi. Pan No.Aadfd2529D अपीलाथ" Appellant ""यथ"/Respondent िनधा"रणवष"/Assessment Year: 2018-19 बनाम Acit, Dabur Invest Corp., 4Th Floor, Punjab Bhawan, Circle-46(1), Room No.106, Vs. Drum Shape Building, I.P. Estate, New Delhi. New Delhi. Pan No.Aadfd2529D अपीलाथ" Appellant ""यथ"/Respondent िनधा"रणवष"/Assessment Year: 2017-18 बनाम Dabur Invest Corp., Jcit, 4Th Floor, Punjab Bhawan, Vs. Range-46, New Delhi. New Delhi. Pan No.Aadfd2529D अपीलाथ" Appellant ""यथ"/Respondent िनधा"रणवष"/Assessment Year: 2018-19 बनाम Dabur Invest Corp., Jcit, 4Th Floor, Punjab Bhawan, Vs. Range-46, New Delhi. New Delhi. Pan No.Aadfd2529D अपीलाथ" Appellant ""यथ"/Respondent

…to the assessee on time basis and, accordingly, working out that accrued for the current year, reflected by an increase in the option price during the year, brought it to tax. Reliance is placed by it on Madras Industrial Investment Corpn. Ltd. v. CIT [1997] 225 ITR 802/91 Taxman 340 (SC); State Bank of Travancore v. CIT [1986] 158 ITR 102/24 Taxman 337 (SC); and CIT v. A. Gajapathy Naidu [1964] 53 ITR 114 (SC).” [Underline supplied by us] 69. Therefore, only issue before the Coordinate bench in that case was in which year the income accrues. It was not the issue before the coordinate bench that whether the mone…

Icici Bank Ltd, Mumbai vs. Addl CIT RG 3 (1), Mumbai

ITA 4249/MUM/2014[2008-09]Status: DisposedITAT Mumbai30 Apr 2025AY 2008-09

Bench: Smt. Beena Pillai & Shri Omkareshwar Chidara

For Appellant: Arati VissanjiFor Respondent: Shri Ajay Chandra, CIT/DR
Section 10(15)Section 14ASection 250Section 36(1)(vii)Section 92C

…wing the orders of CIT(A) 7, Mumbai in the Appellant's own case for A.Y. 2002-03 to 2006-07 which have allowed expenses as spread over the tenure of the bonds following the decision of the Supreme Court in the case of Madras Industrial Investment Corporation (225 ITR 802). 9. Re: Short grant of relief under section 90-₹65,41,167 [Para 15, Page 97 of the CIT(A) order] On the facts and circumstances of the case and in law, the CIT(A) erred in not granting additional relief under section 90 amounting to 65,41,167 as claimed by the Appellant on the ground that since the Assessing Officer had not dealt with the same i…

DCIT Cir 3(1), Mumbai vs. Icici Bank Ltd, Mumbai

ITA 4159/MUM/2014[2008-09]Status: DisposedITAT Mumbai30 Apr 2025AY 2008-09

Bench: Smt. Beena Pillai & Shri Omkareshwar Chidara

For Appellant: Arati VissanjiFor Respondent: Shri Ajay Chandra, CIT/DR
Section 10(15)Section 14ASection 250Section 36(1)(vii)Section 92C

…wing the orders of CIT(A) 7, Mumbai in the Appellant's own case for A.Y. 2002-03 to 2006-07 which have allowed expenses as spread over the tenure of the bonds following the decision of the Supreme Court in the case of Madras Industrial Investment Corporation (225 ITR 802). 9. Re: Short grant of relief under section 90-₹65,41,167 [Para 15, Page 97 of the CIT(A) order] On the facts and circumstances of the case and in law, the CIT(A) erred in not granting additional relief under section 90 amounting to 65,41,167 as claimed by the Appellant on the ground that since the Assessing Officer had not dealt with the same i…

Deputy Commissioner of Income Tax, Nagpur vs. Avantha Holdings Limited, Chandrapur

ITA 354/NAG/2023[2012-13]Status: DisposedITAT Nagpur04 Apr 2025AY 2012-13

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member Avantha Holdings Ltd. Ballarpur Paper Mills S.O. Ballarpur 442 901 Pan – Aabcb6134E

For Appellant: Shri Kishore P. DewaniFor Respondent: Shri Sandipkumar Salunke
Section 251

…ng deduction in the appellate proceedings by CIT(A) cannot be faulted. On merits allowability of deduction is covered in favour of assessee in terms of judgment of Hon'ble Apex Court in the case of M/s Madras Industrial Investment Corporation Ltd. reported at 225 ITR 802(SC). The learned departmental representative has not contravened the submission of appellant in the course of hearing before Tribunal. The direction of Hon'bleCIT(A) to allow accrued premium as deduction for computing the income from business on issue of nonconvertible debenture cannot be faulted. The nonconvertible debentures are transferable by…