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 367,164 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

DCIT, Chennai vs. Bgr Energy System Ltd., Chennai

In the result, appeal of the assessee and Revenue are partly

ITA 954/CHNY/2017[2010-11]Status: DisposedITAT Chennai07 Dec 2017AY 2010-11

Bench: Shri Abraham P.George & Shri George Mathan

For Appellant: Mrs. Jharna B. Harilal, C.A

…t with in the same previous year. Thus, by application of the matching concept, in a year where there is no exempt income, there cannot be a disallowance of expenditure in relation to such assumed income. (Madras Industrial Investment Corporation Ltd vs. CIT (225 ITR 802)). The language of s.14A (1) should be read in that context and such that it advances the scheme of the Act rather than distort it. ITA Nos.660 & 954/17 :- 19 -: & C.O.65/2017 16. In conclusion, we are of the view that the provisions of s. 14A read with Rule 8D of the Rules cannot be made applicable in a vacuum i.e. in the absence of exempt in…

Bgr Energy Systems Limited, Chennai vs. DCIT, Chennai

In the result, appeal of the assessee and Revenue are partly

ITA 660/CHNY/2017[2010-11]Status: DisposedITAT Chennai07 Dec 2017AY 2010-11

Bench: Shri Abraham P.George & Shri George Mathan

For Appellant: Mrs. Jharna B. Harilal, C.A

…t with in the same previous year. Thus, by application of the matching concept, in a year where there is no exempt income, there cannot be a disallowance of expenditure in relation to such assumed income. (Madras Industrial Investment Corporation Ltd vs. CIT (225 ITR 802)). The language of s.14A (1) should be read in that context and such that it advances the scheme of the Act rather than distort it. ITA Nos.660 & 954/17 :- 19 -: & C.O.65/2017 16. In conclusion, we are of the view that the provisions of s. 14A read with Rule 8D of the Rules cannot be made applicable in a vacuum i.e. in the absence of exempt in…

Aarcee Exports Pvt. Ltd, Kolkata vs. DCIT, Circle-11, Kolkata

In the result, the appeal of the assessee is partly allowed as stated above

ITA 882/KOL/2017[2005-06]Status: DisposedITAT Kolkata29 Nov 2017AY 2005-06

Bench: : Shri P.M. Jagtap & Shri S.S.Viswanethra Ravi

For Appellant: Shri Akkal Dudhwewala, ACA, ld.ARFor Respondent: Shri Kalyan Nath, ld.Sr.DR
Section 143(3)Section 32(1)(ii)

…ure in the year of incurrence in one go. The ld CITA did not allow the claim of revenue expenditure of the assessee by placing reliance on the decision of the Hon’ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd vs CIT reported in 225 ITR 802 (SC). In the facts before the Hon’ble Supreme Court, the assessee issued the debentures for a longer period and the actual cost of issue of debentures was equally spread over the life of debentures by the assessee, which was accepted by the Hon’ble Supreme Court. Whereas in the facts before us in the impugned case, the future rentals for 25 years…

Triway Forwarders Pvt. Ltd., Chennai vs. ACIT, Chennai

In the result, the appeal of the assessee is allowed

ITA 932/CHNY/2017[2012-2013]Status: DisposedITAT Chennai28 Nov 2017AY 2012-2013

Bench: Shri Abraham P.George & Shri George Mathanआयकर अपील सं./I.T.A. No.932/Mds/2017 "नधा"रण वष" /Assessment Year : 2012-2013. M/S. Triway Forwarders Pvt. Limited, Vs The Assistant Commissioner Of No.14, Jaffer Street, Income Tax, Mannady, Company Circle Iii(2) Chennai 600 001. Chennai.

For Appellant: Shri. N. Devanathan, AdvocateFor Respondent: Shri. M. Palanichamy, IRS, JCIT
Section 14A

…t with in the same previous year. Thus, by application of the matching concept, in a year where there is no exempt income, there cannot be a disallowance of expenditure in relation to such assumed income. (Madras Industrial Investment Corporation Ltd vs. CIT (225 ITR 802)). The language of s.14A (1) should be read in that context and such that it advances the scheme of the Act rather than distort it. :- 8 -: 16. In conclusion, we are of the view that the provisions of s. 14A read with Rule 8D of the Rules cannot be made applicable in a vacuum i.e. in the absence of exempt income. The questions of law are answere…

Auto Shell Cast Pvt Ltd., Coimbatore vs. DCIT, Coimbatore

In the result, the appeal of the assessee is allowed

ITA 931/CHNY/2017[2013-14]Status: DisposedITAT Chennai28 Nov 2017AY 2013-14

Bench: Shri Abraham P.George & Shri George Mathanआयकर अपील सं./I.T.A. No.931/Mds/2017 "नधा"रण वष" /Assessment Year : 2013-2014

For Respondent: Shri M. Palanichamy, JCIT
Section 14ASection 43B

…t with in the same previous year. Thus, by application of the matching concept, in a year where there is no exempt income, there cannot be a disallowance of expenditure in relation to such assumed income. (Madras Industrial Investment Corporation Ltd vs. CIT (225 ITR 802)). The language of s.14A (1) should be read in that context and such that it advances the scheme of the Act rather than distort it. 16. In conclusion, we are of the view that the provisions of s. 14A read with Rule 8D of the Rules cannot be made applicable in a :- 10 -: vacuum i.e. in the absence of exempt income. The questions of law are answer…

Deputy Commissioner of Income-Tax, Bangalore vs. M/S. Shriram Chits(Karanataka) Pvt. Ltd, Bangalore

In the result, appeal of the Revenue stand dismissed

ITA 543/BANG/2017[2013-14]Status: DisposedITAT Bangalore28 Nov 2017AY 2013-14

Bench: Shri Sunil Kumar Yadav & Shri Jason P Boazassessment Year : 2013-14

For Appellant: Smt. Lalitha Kameshwaran, AdvocateFor Respondent: Shri. Pradeep Kumar, Addl. CIT
Section 145(1)

…h Court in the case of M/s Bilahari Investments Pvt.Ltd. Vs CIT, reported 288 ITR 39, wherein the Hon’ble Madras High Court after distinguishing the decision of the Hon’ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd Vs CIT (197) 225 ITR 802 also following the decision of the Hon’ble Andhra Pradesh High Court in the case of CIT Vs Kovur Textiles & Co. reported in 136 ITR 61, held as under; “The Andhra Pradesh High Court in CIT vs. Kovur Textiles & Co. (1982) 136 ITR 61 (AP) found that the assessee company subscribed to a chit fund by joining in a chit group and after paying few insta…

Fedex Express Tranportation and Supply Chain Services (India) P.Ltd, Mumbai vs. Pr CIT 9, Mumbai

In the result, the appeal of the assessee is allowed

ITA 3621/MUM/2016[2011-12]Status: DisposedITAT Mumbai17 Nov 2017AY 2011-12

Bench: D.T. Garasia & Shri Rajesh Kumarassessment Year: 2011-12 Fedex Express Transportation The Principal Commissioner Of & Supply Chain Services Income Tax – 9 Room No.214, 2Nd Floor, (India) Private Limited Boomerang, Unit No.801, Aayakar Bhavan, M. K. Road, Vs. Wing-A, 8Th Floor, Mumbai - 400020 Chandivali Farm Road, Andheri (East) Mumbai - 400072 Pan: Aabcf6516A (Appellant) (Respondent) Present For: Assessee By : Shri Jitendra Jain Revenue By : Shri S. Padmaja (Cit-Dr) Date Of Hearing : 15.09.2017 Date Of Pronouncement : 17.11.2017 O R D E R

For Appellant: Shri Jitendra JainFor Respondent: Shri S. Padmaja (CIT-DR)
Section 119Section 139(5)Section 263

…diture and there are also rulings which have treated the non- compete fees as intangible asset eligible for depreciation and the assessee has also relied on the decision of Supreme Court in the case of Madras Industrial Investment Corporation Ltd. reported in 225 ITR 802 for the proposition that since the period of non-compete is 3 years the claim alternatively should be allowed over a period of 3 years. In our view, the issue of non-compete fees was examined by the AO and accepted in the course of the assessment proceedings and therefore the CIT was not justified in exercising jurisdiction oil issue. Furthermore…

Assistant Commissioner of Income-Tax, Bangalore vs. M/S.Gmr Sports Pvt. Ltd., Bangalore

In the result, all four appeals filed by the revenue are allowed for statistical purposes

ITA 1964/BANG/2016[2013-14]Status: DisposedITAT Bangalore17 Nov 2017AY 2013-14

Bench: Shri A.K. Garodia & Shri Laliet Kumar

For Appellant: Shri Sunil Jain, C. AFor Respondent: Shri Biswa Ranjan Sasmal, CIT DR

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA Nos. 1961 to 1964/Bang/2016 Assessment years: 2010 – 11 to 2013 – 14 The Assistant M/s. GMR Sports Pvt. Ltd., Commissioner of SKIP House, 25/1, Museum Income Tax, Vs. Road, Central Circle 2 (2), Bangalore – 560 025. Bangalore. PAN: AADCG0588P APPELLANT RESPONDENT Assessee by : Shri Sunil Jain, C. A. Revenue by : Shri Biswa Ranjan Sasmal, CIT DR Date of hearing : 14.11.2017 Date of Pronouncement : 17.11.2017 O R D E R Per Bench: All these four appeals are filed b…

Assistant Commissioner of Income-Tax, Bangalore vs. M/S.Gmr Sports Pvt. Ltd., Bangalore

In the result, all four appeals filed by the revenue are allowed for statistical purposes

ITA 1963/BANG/2016[2011-12]Status: DisposedITAT Bangalore17 Nov 2017AY 2011-12

Bench: Shri A.K. Garodia & Shri Laliet Kumar

For Appellant: Shri Sunil Jain, C. AFor Respondent: Shri Biswa Ranjan Sasmal, CIT DR

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA Nos. 1961 to 1964/Bang/2016 Assessment years: 2010 – 11 to 2013 – 14 The Assistant M/s. GMR Sports Pvt. Ltd., Commissioner of SKIP House, 25/1, Museum Income Tax, Vs. Road, Central Circle 2 (2), Bangalore – 560 025. Bangalore. PAN: AADCG0588P APPELLANT RESPONDENT Assessee by : Shri Sunil Jain, C. A. Revenue by : Shri Biswa Ranjan Sasmal, CIT DR Date of hearing : 14.11.2017 Date of Pronouncement : 17.11.2017 O R D E R Per Bench: All these four appeals are filed b…

Assistant Commissioner of Income-Tax, Bangalore vs. M/S.Gmr Sports Pvt. Ltd., Bangalore

In the result, all four appeals filed by the revenue are allowed for statistical purposes

ITA 1962/BANG/2016[2011-12]Status: DisposedITAT Bangalore17 Nov 2017AY 2011-12

Bench: Shri A.K. Garodia & Shri Laliet Kumar

For Appellant: Shri Sunil Jain, C. AFor Respondent: Shri Biswa Ranjan Sasmal, CIT DR

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA Nos. 1961 to 1964/Bang/2016 Assessment years: 2010 – 11 to 2013 – 14 The Assistant M/s. GMR Sports Pvt. Ltd., Commissioner of SKIP House, 25/1, Museum Income Tax, Vs. Road, Central Circle 2 (2), Bangalore – 560 025. Bangalore. PAN: AADCG0588P APPELLANT RESPONDENT Assessee by : Shri Sunil Jain, C. A. Revenue by : Shri Biswa Ranjan Sasmal, CIT DR Date of hearing : 14.11.2017 Date of Pronouncement : 17.11.2017 O R D E R Per Bench: All these four appeals are filed b…

Assistant Commissioner of Income-Tax, Bangalore vs. M/S.Gmr Sports Pvt. Ltd., Bangalore

In the result, all four appeals filed by the revenue are allowed for statistical purposes

ITA 1961/BANG/2016[2010-11]Status: DisposedITAT Bangalore17 Nov 2017AY 2010-11

Bench: Shri A.K. Garodia & Shri Laliet Kumar

For Appellant: Shri Sunil Jain, C. AFor Respondent: Shri Biswa Ranjan Sasmal, CIT DR

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA Nos. 1961 to 1964/Bang/2016 Assessment years: 2010 – 11 to 2013 – 14 The Assistant M/s. GMR Sports Pvt. Ltd., Commissioner of SKIP House, 25/1, Museum Income Tax, Vs. Road, Central Circle 2 (2), Bangalore – 560 025. Bangalore. PAN: AADCG0588P APPELLANT RESPONDENT Assessee by : Shri Sunil Jain, C. A. Revenue by : Shri Biswa Ranjan Sasmal, CIT DR Date of hearing : 14.11.2017 Date of Pronouncement : 17.11.2017 O R D E R Per Bench: All these four appeals are filed b…

ITO, WD-31(1), Kolkata vs. Madhusudan Rungta & Sons (HUF), Kolkata

In the result, the appeal of the Revenue is dismissed and the Cross Objection of the Assessee is allowed

ITA 141/KOL/2016[2012-2013]Status: DisposedITAT Kolkata15 Nov 2017AY 2012-2013

Bench: Hon’Ble Shri M.Balaganesh, Am & Shri S.S.Viswanethra Ravi, Jm] I.T.A No. 141/Kol/2016 Assessment Year : 2012-13 Ito, Ward-31(1), Kolkata -Vs- Madhusudan Rungta & Sons (Huf) [Pan: Aafhm 1035 G] (Appellant) (Respondent) C.O. No. 11/Kol/2016 (Arising Out Of I.T.A No. 141/Kol/2016 ) Assessment Year : 2012-13 Madhusudan Rungta & Sons (Huf) -Vs- Ito, Ward-31(1), Kolkata [Pan: Aafhm 1035 G] (Appellant) (Respondent)

For Appellant: Shri Arindam Bhattacharjee, Addl. CITFor Respondent: Shri S.M. Surana, Advocate
Section 131Section 133(6)Section 142(1)Section 143(3)

…iated this fact and by placing reliance on the decision of the Hon'ble Supreme Court in the case of TRF Limited reported in 323 ITR 397, and also on the decision of Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd. reported in 225 ITR 802 allowed the claim of the assessee. We do not find any justifiable reason to interfere in the order of the Ld. CIT(A). Accordingly, the ground no. 6 raised by the Revenue is dismissed. 11 ITA No.141/Kol/2016 & C.O. No. 11/Kol/2016 Madhusudan Rungta & Sons (HUF) A.Yr.2012-13 13. Ground no. 1 and 10 raised by the revenue are general in nature and…

ACIT, Chennai vs. M/S. Bhavani Distilleries & Chemicals Ltd., Chennai

In the result the Revenue’s appeal in ITA No

ITA 3055/CHNY/2016[2012-13]Status: DisposedITAT Chennai14 Nov 2017AY 2012-13

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

Section 40

…IT(A) relying on the decision of the Hon’ble Jurisdictional High Court in the case CIT vs First Leasing Company of India Ltd reported in 292 ITR 110, the decision of the Hon’ble Apex Court in the case Madras Industrial Corporation Ltd., vs. CIT reported in 225 ITR 802, the decision in the case National Engineering Industries Ltd vs. CIT reported in 236 ITR 557 held that there is no distinction between the discount on debentures and premium on debentures and further relying on the circular issued by the CBDT held that the tax is required to be deducted only at the time of redemption of debentures and accordi…

JCIT (OSD), Chennai vs. Bhavani Distilleries & Chemicals Pvt Ltd., Chennai

In the result the Revenue’s appeal in ITA No

ITA 1571/CHNY/2016[2011-12]Status: DisposedITAT Chennai14 Nov 2017AY 2011-12

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

Section 40

…IT(A) relying on the decision of the Hon’ble Jurisdictional High Court in the case CIT vs First Leasing Company of India Ltd reported in 292 ITR 110, the decision of the Hon’ble Apex Court in the case Madras Industrial Corporation Ltd., vs. CIT reported in 225 ITR 802, the decision in the case National Engineering Industries Ltd vs. CIT reported in 236 ITR 557 held that there is no distinction between the discount on debentures and premium on debentures and further relying on the circular issued by the CBDT held that the tax is required to be deducted only at the time of redemption of debentures and accordi…

ACIT, Chennai vs. Bhavani Distilleries and Chemicals Ltd., Chennai

In the result the Revenue’s appeal in ITA No

ITA 1584/CHNY/2014[2009-10]Status: DisposedITAT Chennai14 Nov 2017AY 2009-10

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

Section 40

…IT(A) relying on the decision of the Hon’ble Jurisdictional High Court in the case CIT vs First Leasing Company of India Ltd reported in 292 ITR 110, the decision of the Hon’ble Apex Court in the case Madras Industrial Corporation Ltd., vs. CIT reported in 225 ITR 802, the decision in the case National Engineering Industries Ltd vs. CIT reported in 236 ITR 557 held that there is no distinction between the discount on debentures and premium on debentures and further relying on the circular issued by the CBDT held that the tax is required to be deducted only at the time of redemption of debentures and accordi…

ACIT, Chennai vs. M/S. Bhavani Distilleries and Chemicals Limited, Chennai

In the result the Revenue’s appeal in ITA No

ITA 68/CHNY/2012[2008-09]Status: DisposedITAT Chennai14 Nov 2017AY 2008-09

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

Section 40

…IT(A) relying on the decision of the Hon’ble Jurisdictional High Court in the case CIT vs First Leasing Company of India Ltd reported in 292 ITR 110, the decision of the Hon’ble Apex Court in the case Madras Industrial Corporation Ltd., vs. CIT reported in 225 ITR 802, the decision in the case National Engineering Industries Ltd vs. CIT reported in 236 ITR 557 held that there is no distinction between the discount on debentures and premium on debentures and further relying on the circular issued by the CBDT held that the tax is required to be deducted only at the time of redemption of debentures and accordi…

ACIT, Chennai vs. M/S. Bhavani Distilleries and Chemicals Ltd., Chennai

In the result the Revenue’s appeal in ITA No

ITA 888/CHNY/2010[2007-08]Status: DisposedITAT Chennai14 Nov 2017AY 2007-08

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

Section 40

…IT(A) relying on the decision of the Hon’ble Jurisdictional High Court in the case CIT vs First Leasing Company of India Ltd reported in 292 ITR 110, the decision of the Hon’ble Apex Court in the case Madras Industrial Corporation Ltd., vs. CIT reported in 225 ITR 802, the decision in the case National Engineering Industries Ltd vs. CIT reported in 236 ITR 557 held that there is no distinction between the discount on debentures and premium on debentures and further relying on the circular issued by the CBDT held that the tax is required to be deducted only at the time of redemption of debentures and accordi…

Bhavani Distilleris and Chemicals Ltd., Chennai vs. ACIT, Chennai

In the result the Revenue’s appeal in ITA No

ITA 814/CHNY/2010[2007-08]Status: DisposedITAT Chennai14 Nov 2017AY 2007-08

Bench: Shri A.Mohan Alankamony & Shri Duvvuru Rl Reddy

Section 40

…IT(A) relying on the decision of the Hon’ble Jurisdictional High Court in the case CIT vs First Leasing Company of India Ltd reported in 292 ITR 110, the decision of the Hon’ble Apex Court in the case Madras Industrial Corporation Ltd., vs. CIT reported in 225 ITR 802, the decision in the case National Engineering Industries Ltd vs. CIT reported in 236 ITR 557 held that there is no distinction between the discount on debentures and premium on debentures and further relying on the circular issued by the CBDT held that the tax is required to be deducted only at the time of redemption of debentures and accordi…

Gamesa Renewable Private Limited, Chennai vs. ACIT, Chennai

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 376/CHNY/2017[2012-13]Status: DisposedITAT Chennai13 Nov 2017AY 2012-13

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri B.Ramakrishnan, FCA &For Respondent: Smt. Vijayalakshmi, CIT,D.R
Section 143(3)Section 144C(1)Section 144C(5)

…with in the same previous year. Thus, by application of the matching concept, in a year where there is no exempt income, there cannot be a disallowance of expenditure in relation to such assumed income. (Madras Industrial Investment Corporation Ltd. Vs. CIT (225 ITR 802). The language of S.14A(1) should be read in the context and such that it advances the scheme of the Act rather than distort it.” 25.1 Accordingly the above ground is decided in favour of the assessee and there cannot be any disallowance u/s.14A when there is no exempted income. This ground of appeal of the assessee for the A.Y 2012-13 is allo…

Gamesa Renewable Private Limited, Chennai vs. DCIT, Chennai

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 1420/CHNY/2017[2011-12]Status: DisposedITAT Chennai13 Nov 2017AY 2011-12

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddy

For Appellant: Shri B.Ramakrishnan, FCA &For Respondent: Smt. Vijayalakshmi, CIT,D.R
Section 143(3)Section 144C(1)Section 144C(5)

…with in the same previous year. Thus, by application of the matching concept, in a year where there is no exempt income, there cannot be a disallowance of expenditure in relation to such assumed income. (Madras Industrial Investment Corporation Ltd. Vs. CIT (225 ITR 802). The language of S.14A(1) should be read in the context and such that it advances the scheme of the Act rather than distort it.” 25.1 Accordingly the above ground is decided in favour of the assessee and there cannot be any disallowance u/s.14A when there is no exempted income. This ground of appeal of the assessee for the A.Y 2012-13 is allo…