Mazagaon Dock Ltd. v. CIT & Excess Profits Tax

34 ITR 368Supreme Court of India1958#2001 most cited

What is Mazagaon Dock Ltd. v. CIT & Excess Profits Tax authority for?

Investments made by a holding company in its subsidiary can be considered a business activity, allowing related business expenditures to be deducted and not disallowed.

57

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2007 to 2025.

Also referred to as

Mazagaon Dock Ltd. v. CIT · 34 ITR 368 · business expenditure · holding company investment · subsidiary investment · disallowance of expenditure · business activity · Section 37(1) · strategic investment · Section 143(3) assessment

Sections most often in play

Section 143(3)Section 14ASection 2(13)Section 271(1)(c)Section 36(1)(iii)Section 37(1)Section 71Section 80M
Read the full judgment

Issues it is cited on

section 2(13)section 208section 10(2a)section 14a disallowancesection 80msection 71section 32(1)(iia)clarificatory amendmentlegal expensessection 32(1)(ii)strategic investmentsection 92ca(1)

Judgments citing Mazagaon Dock Ltd. v. CIT & Excess Profits Tax

ITO, WD-2(3), Kolkata vs. M/S Kolkata Metro Rail Corporation Ltd., Kolkata

In the result, both the appeals filed by Revenue (ITA No

ITA 1362/KOL/2015[2010-2011]Status: DisposedITAT Kolkata22 Dec 2017AY 2010-2011

Bench: Shri S.S. Viswanethra Ravi, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.1362/Kol/2015& 49/Kol/2016 (िनधा"रणवष" / Assessment Year: 2010-11& 2011-12) I.T.O Wd-2(3), Kolkata Vs. M/S Kolkata Metro Rail Corpn. Ltd. Aayakar Bhawan, P-7, Chowringhee Square, 7Th Floor, Hrbc Bhavan, 4Th& 5Th R/No.21, Kol – 69. Floor, Munshi Prem Chand Sarani, Kolkata – 700 021. "थायीलेखासं./जीआइआरसं./Pan/Gir No. :Aadck 5313 J (Appellant) .. (Assessee) Appellantby : Shriarindam Bhattacharjee, Addl. Cit Assesseeby :Shri Vikash Singhal. सुनवाईकीतारीख/ Date Of Hearing : 12/10/2017 घोषणाकीतारीख/Date Of Pronouncement : 22/12/2017 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: These Captioned Two Appeals Filed By The Revenue,Pertaining To Assessment Year 2010-11,Aredirected Against The Order Passed By The Ld Commissioner Of Income Tax (Appeals)-1,Kolkata,Which In Turn Arise Out Of Assessment Orders Passed By The Assessing Officer U/S 143(3)Of The Income Tax Act, 1961 (Hereinafter Referred To As The ‘Act’). 2.Since These Two Appeals Relate To The Same Assessee, Different Assessment Years, Identical Issues Are Involved, Therefore, These Have Been Clubbed & Heard Together & A Consolidated Order Is Being Passed For The Sake Of Convenience & Brevity.The Revenue’S Appeal In Ita No.1362/Kol/2015, A.Y 2010-11, Is Taken As The Lead Case. 4.The Grounds Of Appeal Raised By The Revenue (In Lead Case In Ita No.1362/Kol/2015, A.Y 2010-11) Are As Under:

For Appellant: ShriArindam Bhattacharjee, Addl. CIT
Section 143(1)Section 143(2)Section 143(3)Section 56

…. The word "business" is of wide import which would also include all such activities which coalesce into setting up of the business. We take support of these propositions from the judgments of Hon`ble Supreme Court in the case of Dock Ltd. vs. CIT/CEPT (1958) 34 ITR 368 (SC) and Narain Swadeshi Weaving Mills vs. CEPT (1954) 26 ITR 765 (SC). Once it is held that the assessee's income is an income connected with business, which would be so in the present case, in view of the finding of fact by the CIT(A) that the monies which were inducted into the joint venture company by the joint venture partners were primarily…

Anand R Bahl, Mumbai vs. DCIT RG 20(3), Mumbai

In the result, the appeals by the assessee are dismissed and that by the Revenue is allowed for statistical purposes

ITA 7706/MUM/2011[2007-08]Status: DisposedITAT Mumbai20 Jul 2016AY 2007-08

Bench: Shri Sanjay Arora & Shri Pawan Singh

For Appellant: Shri Hiten M. Vasant (AR)For Respondent: Shri B. Pruseth (DR)
Section 2(14)

…, and is to be construed in a broad sense [refer, inter alia, Vishwanath Jhunjhunwala v. State of U.P. [2004] 4 SCC 437; CIT v. A. Dharma Reddy [1969] 73 ITR 751, 755, (SC); Venkataraman Aiyar, J., speaking for the court in Mazagaon Dock Ltd. v. CIT(A) [1958] 34 ITR 368, 376 (SC); and CIT vs. National Mutual Life Association of Australasia Ltd. [1993] 1 ITR 350 (Bom). The word means almost anything which is an occupation or duty requiring attention as distinguished from sport or pleasure and is used in the sense of an occupation continuously carried on for the purpose of profit [Rogers Pyatt Shellac & Co. v. Secr…

Samyak Consultancy P.Ltd, Mumbai vs. ITO WD 9(3)(1), Mumbai

In the result, appeal filed by the assessee stands dismissed

ITA 2303/MUM/2011[2007-08]Status: DisposedITAT Mumbai24 Jun 2016AY 2007-08

Bench: Shri Sanjay Arora & Shri Pawan Singh

Section 143(3)Section 14ASection 28

…and is to be construed in a broad sense [refer, inter alia, Vishwanath Jhunjhunwala v. State of U.P., (2004) 4 SCC 437; CIT v. A. Dharma Reddy (1969) 73 ITR 751, 755, (SC); Venkataraman Aiyar, J., speaking for the court in Mazagaon Dock Ltd. v. CIT(A) [(1958) 34 ITR 368, 376 (SC); and National Mutual Life Association of Australasia Ltd., (1993) 1 ITR 350 (Bom)]. The word means almost anything which is an occupation or duty requiring attention as 7 स"यक कंस"ट"सी "ाइवेट "ल"मटेड Samyak Consultancy Private Limited ITA 2303/Mum/2011 distinguished from sport or pleasure and is used in the sense of an occupation cont…

Pr Commissioner of Income Tax vs. Facor Power Ltd

The appeal is dismissed

ITA/1011/2015HC Delhi07 Jan 2016

Bench: HON'BLE MR. JUSTICE BADAR DURREZ AHMED,HON'BLE MR. JUSTICE SANJEEV SACHDEVA

For Appellant: Mr Zoheb Hossain for Mr Rohit MadanFor Respondent: None
Section 143(3)Section 260A

…activity which is in some manner or form connected with business. The word “business” is of wide import which would also include all such activities which coalesce into setting up of the business. See Mazagaon Dock Ltd vs CIT & Excess Profits Tax; (1958) 34 ITR 368 (SC), and Narain Swadeshi Weaving Mills vs Commissioner of Excess Profits Tax; (1954) 26 ITR 765 (SC). Once it is held that the assessee‟s income is an income connected with business, which would be so in the present case, in view of the finding of fact by the CIT(A) that the monies which were inducted into the joint venture company by the j…

Mahagun Hotels Pvt. Ltd., Delhi vs. DCIT, New Delhi

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

ITA 4419/DEL/2013[2009-10]Status: DisposedITAT Delhi06 Nov 2015AY 2009-10

Bench: Sh. I.C.Sudhir, Jm & Sh. Prashant Maharishi, Am

For Appellant: Sh. Saubhagya Aggarwal, Adv. Suman Jain, CAFor Respondent: Sh. R.R. Singh, CIT, DR
Section 153A

…e an activity which is in some manner or form connected with business. The word "business" is of wide import which would also include all such activities which coalesce into setting up of the business. See Mazagaon Dock Ltd vs CIT & Excess Profits Tax; (1958) 34 ITR 368 (SC), and Narain Swadeshi Weaving Mills vs Commissioner of Excess Profits Tax; (1954) 26 ITR 765 (SC). Once it is held that the assessee‟s income is an income connected with business, which would be so in the present case, in view of the finding of fact by the CIT(A) that the monies which were inducted into the joint venture company by the joint v…

Mahagun Hotels Pvt. Ltd., Delhi vs. DCIT, New Delhi

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

ITA 4418/DEL/2013[2008-09]Status: DisposedITAT Delhi06 Nov 2015AY 2008-09

Bench: Sh. I.C.Sudhir, Jm & Sh. Prashant Maharishi, Am

For Appellant: Sh. Saubhagya Aggarwal, Adv. Suman Jain, CAFor Respondent: Sh. R.R. Singh, CIT, DR
Section 153A

…e an activity which is in some manner or form connected with business. The word "business" is of wide import which would also include all such activities which coalesce into setting up of the business. See Mazagaon Dock Ltd vs CIT & Excess Profits Tax; (1958) 34 ITR 368 (SC), and Narain Swadeshi Weaving Mills vs Commissioner of Excess Profits Tax; (1954) 26 ITR 765 (SC). Once it is held that the assessee‟s income is an income connected with business, which would be so in the present case, in view of the finding of fact by the CIT(A) that the monies which were inducted into the joint venture company by the joint v…

CIT vs. Petronet Lng Ltd

ITA/290/2011HC Delhi17 Feb 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

…be an activity which is in some manner or form connected with business. The word "business" is of wide import which would also include all such activities which coalesce into setting up of the business. See Mazagaon Dock Ltd. v. CIT & Excess Profits Tax 34 ITR 368(SC) , and Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax 26 ITR765. Once it is held that the assessee's income is an income connected with business, which would be so in the present case, in view of the finding of fact by the CIT(A) that the monies which were inducted into the joint venture company by the joint venture…

CIT vs. Petronet Lng Ltd

ITA - 290 / 2011HC Delhi17 Feb 2011

…be an activity which is in some manner or form connected with business. The word "business" is of wide import which would also include all such activities which coalesce into setting up of the business. See Mazagaon Dock Ltd. v. CIT & Excess Profits Tax 34 ITR 368(SC) , and Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax 26 ITR765. Once it is held that the assessee's income is an income connected with business, which would be so in the present case, in view of the finding of fact by the CIT(A) that the monies which were inducted into the joint venture company by the joint venture…

Ansal Housing & Construction Ltd vs. C.I.T

ITA/1261/2008HC Delhi30 Oct 2009

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 143(3)Section 260ASection 35

…e word "business" connotes some real, substantial and systematic or organised course of activity or conduct with a set purpose." Endorsing this construction, the Supreme Court in a later decision in Mazagaon Dock Ltd. v. Commissioner of Income Tax (1958) 34 ITR 368 has observed (at page 376) : "The word 'business' is, as has often been said, one of wide import and in fiscal statutes it must be construed in a broad rather than a restricted sense." 8. The words "industrial undertaking" therefore, should be understood to have been used in Section 54D in a wide sense, taking in its fold any project or…

Ansal Housing & Construction Ltd vs. C.I.T

Accordingly, these appeals preferred by the assessee are dismissed with costs of Rs

ITA - 1278 / 2008HC Delhi30 Oct 2009
Section 143(3)Section 260ASection 35

…t "the word "business" connotes some real, substantial and systematic or organised course of activity or conduct with a set purpose." Endorsing this construction, the Supreme Court in a later decision in Mazagaon Dock Ltd. v. Commissioner of Income Tax (1958) 34 ITR 368 has observed (at page 376): "The word 'business' is, as has often been said, one of wide import and in fiscal statutes it must be construed in a broad rather than a restricted sense." 8. The words "industrial undertaking" therefore, should be understood to have been used in Section 54D in a wide sense, taking in its fold any project or business…

Ansal Housing & Construction Ltd vs. C.I.T

Accordingly, these appeals preferred by the assessee are dismissed with costs of Rs

ITA - 1287 / 2008HC Delhi30 Oct 2009
Section 35Section 35DSection 8

…t "the word "business" connotes some real, substantial and systematic or organised course of activity or conduct with a set purpose." Endorsing this construction, the Supreme Court in a later decision in Mazagaon Dock Ltd. v. Commissioner of Income Tax (1958) 34 ITR 368 has observed (at page 376): "The word 'business' is, as has often been said, one of wide import and in fiscal statutes it must be construed in a broad rather than a restricted sense." - 8. The words "industrial undertaking" therefore, should be understood to have been used in Section 54D in a wide sense, taking in its fold any project or busines…

Ansal Housing & Construction Ltd vs. Commissioner of Income Tax

ITA-1261/2008HC Delhi30 Oct 2009
Section 143(3)Section 260ASection 35

…e word "business" connotes some real, substantial and systematic or organised course of activity or conduct with a set purpose." Endorsing this construction, the Supreme Court in a later decision in Mazagaon Dock Ltd. v. Commissioner of Income Tax (1958) 34 ITR 368 has observed (at page 376) : "The word 'business' is, as has often been said, one of wide import and in fiscal statutes it must be construed in a broad rather than a restricted sense." 8. The words "industrial undertaking" therefore, should be understood to have been used in Section 54D in a wide sense, taking in its fold any project or…

Indian Oil Panipat Power Consortium Ltd vs. Income Tax Officer

In the result we answer the question as framed in favour of the assessee

ITA/1156/2007HC Delhi26 Feb 2009

Bench: HON'BLE MR. JUSTICE VIKRAMAJIT SEN,HON'BLE MR. JUSTICE RAJIV SHAKDHER

For Appellant: Mr B.B. Ahuja, Sr. Advocate withFor Respondent: Ms Prem Lata Bansal & Mr Mohan Prasad
Section 260A

…activity which is in some manner or form connected with business. The word “business” is of wide import which would also include all such activities which coalesce into setting up of the business. See Mazagaon Dock Ltd vs CIT & Excess Profits Tax; (1958) 34 ITR 368 (SC), and Narain Swadeshi Weaving Mills vs Commissioner of Excess Profits Tax; (1954) 26 ITR 765 (SC). Once it is held that the assessee‟s income is an income connected with business, which would be so in the present case, in view of the finding of fact by the CIT(A) that the monies which were inducted into the joint venture company by the…

Indian Oil Panipat Power Consortium Ltd vs. Income Tax Officer

In the result we answer the question as framed in favour of the assessee

ITA/1157/2007HC Delhi26 Feb 2009

Bench: HON'BLE MR. JUSTICE VIKRAMAJIT SEN,HON'BLE MR. JUSTICE RAJIV SHAKDHER

For Appellant: Mr B.B. Ahuja, Sr. Advocate withFor Respondent: Ms Prem Lata Bansal & Mr Mohan Prasad
Section 260A

…activity which is in some manner or form connected with business. The word “business” is of wide import which would also include all such activities which coalesce into setting up of the business. See Mazagaon Dock Ltd vs CIT & Excess Profits Tax; (1958) 34 ITR 368 (SC), and Narain Swadeshi Weaving Mills vs Commissioner of Excess Profits Tax; (1954) 26 ITR 765 (SC). Once it is held that the assessee‟s income is an income connected with business, which would be so in the present case, in view of the finding of fact by the CIT(A) that the monies which were inducted into the joint venture company by the…

Indian Oil Panipat Power Consortium Limited, New Delhi vs. Income Tax Officer

In the result we answer the question as framed in favour of the assessee

ITA-1156/2007HC Delhi26 Feb 2009
For Appellant: Mr B.B. Ahuja, Sr. Advocate withFor Respondent: Ms Prem Lata Bansal & Mr Mohan Prasad
Section 260A

…activity which is in some manner or form connected with business. The word “business” is of wide import which would also include all such activities which coalesce into setting up of the business. See Mazagaon Dock Ltd vs CIT & Excess Profits Tax; (1958) 34 ITR 368 (SC), and Narain Swadeshi Weaving Mills vs Commissioner of Excess Profits Tax; (1954) 26 ITR 765 (SC). Once it is held that the assessee‟s income is an income connected with business, which would be so in the present case, in view of the finding of fact by the CIT(A) that the monies which were inducted into the joint venture company by the…

Indian Oil Panipal Power Consortium Limited, New Delhi vs. Income Tax Officer

In the result we answer the question as framed in favour of the assessee

ITA-1157/2007HC Delhi26 Feb 2009
For Appellant: Mr B.B. Ahuja, Sr. Advocate withFor Respondent: Ms Prem Lata Bansal & Mr Mohan Prasad
Section 260A

…activity which is in some manner or form connected with business. The word “business” is of wide import which would also include all such activities which coalesce into setting up of the business. See Mazagaon Dock Ltd vs CIT & Excess Profits Tax; (1958) 34 ITR 368 (SC), and Narain Swadeshi Weaving Mills vs Commissioner of Excess Profits Tax; (1954) 26 ITR 765 (SC). Once it is held that the assessee‟s income is an income connected with business, which would be so in the present case, in view of the finding of fact by the CIT(A) that the monies which were inducted into the joint venture company by the…

Ishikawajma-Harima Heavy Industries Ltd vs. Director of Income Tax, Mumbai

The appeal is allowed in part and to

C.A. No.-000009-000009 - 2007Supreme Court04 Jan 2007
For Respondent: Director of Income Tax, Mumbai
Section 241

…n in India’. Mere existence of business connection may not result in income of the non-resident assessee from transaction with such a business connection accruing or arising in India. In Mazagaon Dock Ltd. v. CIT and Excess Profits Tax [34 ITR 368], whereupon again reliance placed is distinguishable. In that case a non- resident carried on business with a resident, and the issue adjudicated upon by the Court was that whether there was a clear and close connection between them that produced profits or not, and whether any such income generated by the non-resident company sending its shi…