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

Deputy Commissioner of Income Tax vs. Curls & Curves India Ltd

ITA - 1093 / 2008HC Delhi29 Oct 2010

…REPORTABLE * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA Nos. 514/2006, 439/2007, 980/2007, 14/2008, 409/2009, 193/2010, 1112/2008 & 598/2010 ITA Nos.1093/2008, 1142/2008, 1204/2008, 1099/2008, 627/2009, 1153/2010 Reserved On: 19th October, 2010 % Pronounced On: 29th October, 2010 1) ITA No.514 of 2006 Commissioner of Income Tax . . . Appellant through : Ms. Prem Lata Bansal, Advocate VERSUS Dinesh Kumar Goel . . .Respondent through: Mr. C.S. Aggarwal, Sr…

The Commissioner of Income Tax vs. M/S Oswal Agro Mills Ltd

The appeal is dismissed

ITA/158/2006HC Delhi27 Oct 2010

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE SURESH KUMAR KAIT

…of premium paid in its entirety. 4. We have heard the counsel for both the parties at length. The only reason for which the Revenue wants the claim to be spread over a period of five years is that in Madras Industrial Investment Corporation Ltd. V. CIT, 225 ITR 802 (SC), the Supreme Court has accepted the concept of spreading over in the case of issue of debentures and therefore, the approach of the Assessing Officer and the CIT(A) was correct. Mr. Aggarwal, learned senior counsel appearing for the assessee, on the other hand submitted that the said judgment did not apply to the facts of this case as…

M/S. Rotork Controla India (P) Ltd vs. Commnr. of Income Tax, Chennai

Appeals stand allowed in favour of the assessee with no order as to

C.A. No.-003506-003510 - 2009Supreme Court12 May 2009
Section 37

…t the above principle of commercial accounting in Metal Box Company of India (supra) also find place in the judgment of this Court in the case of Madras Industrial Investment Corporation Ltd. v. Commissioner of Income-tax – (1997) 225 ITR 802 (SC), in which the Court has explained the meaning of the word “expenditure” in Section 37 of the 1961 Act. In other words, the principle enunciated in Metal Box Company of India (supra) which has been reiterated in Shree Sajjan Mills (supra) (upto 1.4.73) which deals with making of provision on the basis of estimated present value of…

Commissioner of Income Tax, Delhi vs. M/S Woodward Governor India P. Ltd

C.A. No.-002206-002206 - 2009Supreme Court08 Apr 2009
Section 143Section 143(1)(a)Section 143(2)Section 37(1)Section 43(1)

…amount which is a “loss” even though the said amount has not gone out from the pocket of the assessee. This view of the Madhya Pradesh High Court has been approved by this Court in the case of Madras Industrial Investment Corporation Ltd. v. CIT reported in 225 ITR 802. According to the Law and Practice of Income Tax by Kanga and Palkhivala, Section 37(1) is a residuary section extending the allowance to items of business expenditure not covered by Sections 30 to 36. This Section, according to the learned Author, covers cases of business expenditure only, and not of business losses which are, however, ded…

Commissioner of Income Tax vs. Gujarat Guardian Limited

In the result, no fault can

ITA/669/2008HC Delhi23 Jan 2009

Bench: The Tribunal The Revenue As Well As The Assessee, Filed An Appeal Against The Order Of The Commissioner Of 2009:Dhc:240-Db

For Appellant: Ms. Prem Lata BansalFor Respondent: Ms. Kavita Jha
Section 260ASection 37(1)Section 40A(2)

…rom the assessee for claiming the entire amount as deduction in the previous year relevant to the assessment year under consideration in view of the judgment of the Supreme Court in the case of Madras Industrial Investment Corporation Ltd vs CIT; (1997) 225 ITR 802. The Assessee responded to the query of the Assessing Officer by submitting that it had made a proposal to IDBI for restructuring its debt with respect to rupee term loan aggregating to Rs 170.76 crores. The IDBI vide letter dated 19.03.1995 agreed to the proposal and inter alia reduced the rate of interest on the rupee term loan to 15% p.…

The Commissioner of Income Tax Delhi II vs. Jai Parabolic Springs Ltd

The appeal of the Revenue is hereby dismissed

ITA/798/2007HC Delhi07 Apr 2008

Bench: HON'BLE MR. JUSTICE MADAN B. LOKUR,HON'BLE MR. JUSTICE V.B. GUPTA

Section 143(1)Section 143(2)Section 143(3)Section 254Section 260A

…ars. [ Reliance can be placed on Madras Industrial Investment Corporation Ltd. v. ITA No.798/2007 Page 12 of 12 Commissioner of Income Tax (1997) 225 ITR 802 (SC)] 19. In view of the above discussion, it is very clear that there is no prohibition on the powers of the Tribunal to entertain an additional ground which according to the Tribunal arises in the matter and for the just decision of the case. Therefore, there is no infirmity in the order of the Tribunal. 20. Accordingly, the appeal of t…

The Commissioner of Income Tax Delhi II vs. Jai Parabolic Springs Ltd

The appeal of the Revenue is hereby dismissed

ITA - 798 / 2007HC Delhi07 Apr 2008
Section 143(1)Section 143(2)Section 143(3)Section 254Section 260A

…an be placed on Madras Industrial Investment Corporation Ltd. v. 2008:DHC:1280-DB ITA No.798/2007 Page 12 of 12 Commissioner of Income Tax (1997) 225 ITR 802 (SC)] 19. In view of the above discussion, it is very clear that there is no prohibition on the powers of the Tribunal to entertain an additional ground which according to the Tribunal arises in the matter and for the just decision of the case. Therefore, there is no infirmity in the order of the Tribunal. 20. Accordingly, the appeal of t…

Commnr. of Income Tax, Chennai vs. M/S. Bilahari Investment P. Ltd

Appeals are dismissed

C.A. No.-001625-001625 - 2008Supreme Court27 Feb 2008
For Respondent: M/s Bilahari Investment (P) Ltd

…entitled to estimate the expenditure because, without such estimation of expenditure, it was not possible to compute profits and gains. This concept is also applied by the Supreme Court in the case of Madras Industrial investment Corporation Ltd. [1997] 225 ITR 802 under following observations (headnote): "Ordinarily, revenue expenditure which is incurred wholly and exclusively for the purpose of business must be allowed in its entirety in the year in which it is incurred. It cannot be spread over a number of years http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5 even if the assessee has wri…