Nectar Beverages (P.) Ltd. v. DCIT

314 ITR 314Supreme Court of India2009#3183 most cited

What is Nectar Beverages (P.) Ltd. v. DCIT authority for?

Section 41(1) of the Income Tax Act is not applicable to taxing a balancing charge under section 41(2) or to bad and doubtful debts specifically covered under section 41(4), as these provisions deal with distinct circumstances.

37

judgments rely on this decision, according to BharatTax’s citation analysis of 366,383 Indian tax judgments — from 2016 to 2026.

Also referred to as

Nectar Beverages · Section 41(1) · Section 41(2) · Section 41(4) · balancing charge · bad debts · doubtful debts · recoupment · deemed income · distinct provisions

Sections most often in play

Section 36(1)(viia)Section 36(1)(vii)Section 37(1)Section 250Section 35DSection 36(1)(viii)Section 41(1)Section 41(4)
Read the full judgment

Issues it is cited on

section 41(2)section 41(4)recognised provident fundapproved superannuation fundsection 43dsection 43b(f)approved gratuity fundsection 40a(9)section 36(1)(viia)section 36(1)(viii)doctrine of mergerstrategic investment

Judgments citing Nectar Beverages (P.) Ltd. v. DCIT

ACIT, New Delhi vs. M/S Niit Technologies Ltd., New Delhi

In the result, both the appeals of the assessee are partly allowed and the appeal of Revenue for assessment year 2007-08

ITA 5492/DEL/2013[2008-09]Status: DisposedITAT Delhi28 Jan 2020AY 2008-09

Bench: Shri Bhavnesh Saini & Shri O.P. Kant

For Appellant: 1. That the Commissioner of Income-Tax (Appeals) erred on facts and in law in up
Section 14ASection 35D

…Hoshane D. Nanavati (supra) that section 14A deals only with the expenditure and not any statutory allowance admissible to the assessee. The decision has been arrived at after considering the decision in the case of Nectar Bebverages Pvt. Ltd. vs. DCIT (2009) 314 ITR 314. The Id. CIT (DR) has not been able to displace the ratio of these cases. Thus, on consideration, we find that section 14A uses the words "expenditure incurred by the assessee in relation to income A statutory allowance under section 32 is not an expenditure. Therefore, we are in aereement with the decision of the Division Bench in the case of Ho…

ACIT, New Delhi vs. M/S Niit Technologies Ltd., New Delhi

In the result, both the appeals of the assessee are partly allowed and the appeal of Revenue for assessment year 2007-08

ITA 5491/DEL/2013[2007-08]Status: DisposedITAT Delhi28 Jan 2020AY 2007-08

Bench: Shri Bhavnesh Saini & Shri O.P. Kant

For Appellant: 1. That the Commissioner of Income-Tax (Appeals) erred on facts and in law in up
Section 14ASection 35D

…Hoshane D. Nanavati (supra) that section 14A deals only with the expenditure and not any statutory allowance admissible to the assessee. The decision has been arrived at after considering the decision in the case of Nectar Bebverages Pvt. Ltd. vs. DCIT (2009) 314 ITR 314. The Id. CIT (DR) has not been able to displace the ratio of these cases. Thus, on consideration, we find that section 14A uses the words "expenditure incurred by the assessee in relation to income A statutory allowance under section 32 is not an expenditure. Therefore, we are in aereement with the decision of the Division Bench in the case of Ho…

Techno Shares & Stocks Ltd, Mumbai vs. Addl CIT RG 4(2), Mumbai

In the result, the appeal of assessee is allowed

ITA 5938/MUM/2012[2008-09]Status: DisposedITAT Mumbai18 Oct 2019AY 2008-09

Bench: Shri G.S. Pannu() : A.Y : 2008-09

For Appellant: Shri P.J. Pardiwala &For Respondent: Shri B. Srinivas
Section 2Section 255(4)Section 32(1)(ii)Section 45Section 47Section 50Section 55(2)(ab)

…50 of the Act applies only when the capital asset is an asset forming part of block of assets in respect of which depreciation has been allowed. This has been categorically held by the Hon'ble Supreme Court in the case of Nectar Beverages Pvt. Ltd. vs. DCIT, 314 ITR 314 (SC) at Para 12 which provides that ‘bottles’, which did not form part of block of assets, was not chargeable to tax under Section 50 of the Act. 17. Therefore, it was submitted that the finding of the learned Accountant Member that Section 50 of the Act was applicable as the assessee had been allowed deprecation on the membership card is not su…

Ganesh Benzoplast Ltd., Mumbai vs. Principal Commissioner of Income Tax -1, Mumbai

In the result, the appeal of the assessee is allowed

ITA 2047/MUM/2019[2009-10]Status: DisposedITAT Mumbai11 Sept 2019AY 2009-10

Bench: Shri Rajesh Kumar & Shri Amarjit Singhassessment Year: 2009-10

For Appellant: Shri Haridas Bhat, C.AFor Respondent: Shri Laxmi Vara Prasad Gude , D.R
Section 143(3)Section 147Section 148Section 263Section 41Section 41(1)Section 43B

…of recapitalization. Further, the depreciation is an allowance, which is governed by the Income tax Act. A statutory allowance under section 32 is not an expenditure. Hon'ble Supreme Court of India in the matter of Nectar Beverages Pvt. Ltd. Vs. DCIT (2009) 314 ITR 314 CIVIL APPEAL No.5291 of 2004 clearly held that depreciation is neither a loss, nor an expenditure, nor a trading liability, referred to in Section 41(1). The Act does not provide for reversal of depreciation. The adjustment of cost as prescribed by the law was done by the Assessee and the same were accepted by the AO. The adjustment of the cost…

Sudha Apparels Limited, Kolkata vs. DCIT, Circle - 10(2), Kolkata

In the result, appeal of revenue is dismissed and that of the assessee is allowed

ITA 918/KOL/2018[2013-14]Status: DisposedITAT Kolkata11 Apr 2019AY 2013-14

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

Section 10(34)Section 115JSection 139(1)Section 14ASection 32

…Hoshang D. Nanavati (supra) that section 14A deals only with the expenditure and not any statutory allowance admissible to the assessee. The decision has been arrived at after considering the decision in the case of Nectar Bebverages Pvt. Ltd. Vs. DCIT (2009) 314 ITR 314. The ld. CIT (DR) has not been able to displace the ratio of these cases. Thus, on consideration, we find that section 14A uses the words “expenditure incurred by the assessee in relation to income”. A statutory allowance under section 32 is not an expenditure. Therefore, we are in agreement with the decision of the Division Bench in the case of…

DCIT, Circle - 10(2), Kolkata vs. M/S. Sudha Apparels Limited, Kolkata

In the result, appeal of revenue is dismissed and that of the assessee is allowed

ITA 1047/KOL/2018[2013-14]Status: DisposedITAT Kolkata11 Apr 2019AY 2013-14

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

Section 10(34)Section 115JSection 139(1)Section 14ASection 32

…Hoshang D. Nanavati (supra) that section 14A deals only with the expenditure and not any statutory allowance admissible to the assessee. The decision has been arrived at after considering the decision in the case of Nectar Bebverages Pvt. Ltd. Vs. DCIT (2009) 314 ITR 314. The ld. CIT (DR) has not been able to displace the ratio of these cases. Thus, on consideration, we find that section 14A uses the words “expenditure incurred by the assessee in relation to income”. A statutory allowance under section 32 is not an expenditure. Therefore, we are in agreement with the decision of the Division Bench in the case of…

ITO Exemption Ward 3, Chennai vs. Shri Shirdi Saibaba Spiritual and Charitable Trust, Chennai

In the result, the Revenue’s appeal is dismissed

ITA 2859/CHNY/2017[2012-13]Status: DisposedITAT Chennai10 Apr 2018AY 2012-13

Bench: Shri Duvvuru Rl Reddy & Shri S. Jayaramanआयकर अपील सं/.I.T.A. No. 2859/Chny/2017 "नधा"रण वष"/Assessment Year : 2012-13 Income Tax Officer, M/S. Shri Shiridi Saibaba Spiritual & Exemption Ward 3, Vs. Charitable Trust, 121, Mahatma Gandhi Road, Sai Business Point, No. 17, 2Nd Floor, Mount Road, Little Mount, Nungambakkam, Chennai – 600 034. Chennai – 600 015. [Pan: Aats 3448J] (&'यथ)/Respondent) (अपीलाथ"/Appellant) Revenue By : Shri. N. Madhavan, Addl. Cit : Shri Saroj Kumar Parida, Advocate Assessee By सुनवाईक/तार"ख/Date Of Hearing : 03.04.2018 घोषणाक/तार"ख/Date Of Pronouncement : 10.04.2018

For Respondent: Shri. N. Madhavan, Addl. CIT
Section 11Section 11(1)(a)Section 12ASection 2(15)Section 80G(5)(vi)

…uisition of assets were treated as "application of income" for the purpose of claiming exemption u/s. 11 of the Act. 2.2 The Ld. CIT(A) failed to appreciate that as per the decision of the Hon'ble Apex Court in the case of M/s. Nectar Beverages Limited Vs CIT 314 ITR 314, depreciation is neither a loss nor expenditure. Depreciation is only an "allowance" and the view that depreciation is an "expenditure" to be treated as "application of income" for charitable purposes is incorrect. 2.3 The Ld. CIT(A) failed to appreciate the decision of the Hon'ble Kerala High Court in the case of Lissie Medical Institutions Vs C…

Commissioner of Income Tax Delhi-2 vs. Central Warehousing Corporation

ITA/584/2017HC Delhi01 Aug 2017

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH

Section 10Section 2(11)Section 260ASection 32(1)(ii)Section 41(1)Section 41(2)

…expense and not an allowance, as sought to be claimed by the Assessee. 4. Both the CIT (A) as well as the ITAT have, while accepting the contention of the Assessee, relied on the decision of the Supreme Court in Nectar Beverages Pvt. Ltd. v. DCIT (2009) 314 ITR 314. 5. Mr. P. Roychaudhuri, learned counsel appearing for the Revenue, sought to distinguish the aforementioned judgment of the Supreme Court in Nectar Beverages Pvt. Ltd. (supra) pointing out that it was in the context of Section 41(1) of the Act which dealt with concept of ‘balancing charge’. He submitted that the Supreme Court in the abo…

DCIT, CC-VII, Kolkata vs. M/S Saltee Infrastructure Ltd., Kolkata

Appeal is dismissed

ITA 856/KOL/2014[2009-2010]Status: DisposedITAT Kolkata22 Mar 2017AY 2009-2010

Bench: Shri N.V.Vasudevan & Shri Waseem Ahmed

Section 143(3)Section 147Section 148Section 194JSection 40

…Mahajan vs. ACIT in ITA No. 3002/Ahd/2009 for A.Y. 2006-07 the Hon’ble Special Bench ITAT, Ahmedabad vide its order dated 25.05.2012, after relying on the decision of the Hon’ble Hon'ble Supreme Court in the case of Nectar Beverages P Ltd vs. DCIT reported in 314 ITR 314 (SC) and of Hon’ble Mumbai ITAT in the case of Hoshang D Nanavati vs. ACIT in ITA No. 3567/Mum/2007 has held that “Depreciation” is not an expenditure but the same is statutory deduction. In view of above, we are of the considered opinion that the provisions of section 40(a)(ia) of the Act is not applicable in the instant case. Therefore, there i…

Asst CIT Cir 11(5) vs. Jsw Steel Ltd

In the result assessee’s appeal is partly allowed whereas revenue’s appeal is dismissed

ITA 930/BANG/2009[2004-05]Status: DisposedITAT Mumbai13 Jan 2017AY 2004-05

Bench: Shri Amit Shukla & Shri Ashwani Tanejaassessment Year: 2004-05

For Appellant: S/Shri Kanchan Kaushal & Hirali Desai, A.RFor Respondent: Shri Alok Johri, CIT D.R
Section 115JSection 139(1)Section 143(3)Section 234BSection 244A

…n the purview of section 41(1).” 28. The Ld. CIT(A), after noting down the various decisions, observed that the decision of Hon’ble Bombay High Court has been reversed by the Hon’ble Supreme Court, since reported as Nectar Beverages Pvt. Ltd. vs. DCIT (2009) 314 ITR 314 and held as under: “On a careful consideration of the facts brought before me, the basis of the AO's decision, and the arguments adduced by the appellant as well as the plethora of judicial pronouncements on the subject, it is quite evident that the ratio of the decisions enumerated above and which, I might add, are squarely on the point at issue…

Jsw Steel Ltd vs. Asst CIT Cir 11(5)

In the result assessee’s appeal is partly allowed whereas revenue’s appeal is dismissed

ITA 923/BANG/2009[2004-05]Status: DisposedITAT Mumbai13 Jan 2017AY 2004-05

Bench: Shri Amit Shukla & Shri Ashwani Tanejaassessment Year: 2004-05

For Appellant: S/Shri Kanchan Kaushal & Hirali Desai, A.RFor Respondent: Shri Alok Johri, CIT D.R
Section 115JSection 139(1)Section 143(3)Section 234BSection 244A

…n the purview of section 41(1).” 28. The Ld. CIT(A), after noting down the various decisions, observed that the decision of Hon’ble Bombay High Court has been reversed by the Hon’ble Supreme Court, since reported as Nectar Beverages Pvt. Ltd. vs. DCIT (2009) 314 ITR 314 and held as under: “On a careful consideration of the facts brought before me, the basis of the AO's decision, and the arguments adduced by the appellant as well as the plethora of judicial pronouncements on the subject, it is quite evident that the ratio of the decisions enumerated above and which, I might add, are squarely on the point at issue…

Nasha Trading & Commerce P.Ltd, Mumbai vs. DCIT 5(2), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 3837/MUM/2012[2009-10]Status: DisposedITAT Mumbai23 Sept 2016AY 2009-10

Bench: Shri D. Karunakara Rao & Shri Ravish Sood

For Appellant: Ms. Aarti SatheFor Respondent: Smt. Madhavi, DR
Section 10Section 10(34)Section 143(3)Section 14ASection 32

…of Hoshan D. Nanavati (supra) that section 14A deals only with the expenditure and not any Statutory allowance admissible to the assessee. The decision has been arrived at after considering the decision in the case of Nectar Beverages Pvt Ltd vs. DCIT (2009) 314 ITR 314. The Ld CIT (DR) has not been able to displace the ratio of these cases. Thus, on consideration, we find that section 14A uses the words “expenditure incurred by the assessee in relation to income”. A Statutory allowable under section 32 is not an expenditure. Therefore, we are in agreement with the decision of the Division Bench in the case of H…

ITO, Chennai vs. Sri Thyaga Brahma Gana Sabha, Chennai

In the result, the appeal of the Department is dismissed

ITA 1677/CHNY/2015[2012-2013]Status: DisposedITAT Chennai05 Aug 2016AY 2012-2013

Bench: Shri Chandra Poojari & Shri G. Pavan Kumar

For Appellant: Shri. R. MeenakshisundaramFor Respondent: Shri. Durai Pandian, Addl. CIT
Section 11Section 12ASection 13(8)Section 143(2)Section 143(3)Section 2(15)

…time of purchase. The ld. Assessing Officer has disallowed depreciation claimed on such asset during the year and allowed depreciation only on assets purchased during the year and relied on the following judicial decisions:- ‘’ 1. Nectar Beverages Limited 314 ITR 314 (SC). 2. J.K. Synthetics Limited (1992) 65 Taxman 420 (SC). 3. Lissie Medical Institutions vs CIT 2012) TIOL 3030 (Ker) 4. DIT vs. M/s. Charanjiv Charitable Trust – Delhi High Court in ITA No.321 to 323/2013, dated 18.03.2014 And made addition of corpus fund, deprecation and passed assessment order u/s.143(3) of the Act dated 10.11.2014 trea…

DCIT, New Delhi vs. M/S. Central Warehousing Corp., New Delhi

In the result, all the five appeals of the Department are dismissed

ITA 1459/DEL/2014[2000-01]Status: DisposedITAT Delhi29 Jul 2016AY 2000-01

Bench: Shri Sudhanshu Srivastava & Shri O.P. Kant

Section 10(29)Section 14A

…luding depreciation as part of the expenditure and taking gross receipts from warehousing and CFS/ICD or not. 3. The Ld. AR submitted that the issue is covered in favour of the assessee by the decision of the Apex Court in Nectar Beverages P. Ltd. vs. DCIT 314 ITR 314, wherein the Hon’ble Apex Court has held that the depreciation is an allowance and not expenditure. 4. The Ld. CIT DR placed reliance on the order of the AO and submitted that the Ld. CIT (A) has wrongly ignored the fact that depreciation was like any other business expense which goes on to reduce the tax liability of the assessee. 5. We have…

Andhra Chamber of Commerce, Chennai vs. ADIT, Chennai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 164/CHNY/2015[2009-10]Status: DisposedITAT Chennai06 Jul 2016AY 2009-10

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddyआयकर अपील सं./I.T.A.No.164/Mds/2015 "नधा"रण वष"/Assessment Year:2009-10 M/S. Andhra Chamber Of Commerce, The Assistant Director Of No. 23, Third Cross Street, Vs. Income Tax [Exemptions] - Iii, West Cit Nagar, Nandanam, Chennai 600 034. Chennai 600 035. [Pan: Aaaca7746C] (अपीलाथ" /Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से / Appellant By : Shri R. Vijayaraghavan, Advocate ""यथ" क" ओर से/Respondent By : Smt. R. Ilavarasi, Jcit सुनवाई क" तार"ख/ Date Of Hearing : 11.04.2016 घोषणा क" तार"ख /Date Of Pronouncement : 06.07.2016 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) Vii, Chennai, Dated 12.09.2014 Relevant To The Assessment Year 2009-10. The First Ground Raised In The Appeal Of The Assessee Is With Regard To Denial Of Exemption Under Section 11 Of The Income Tax Act [“Act” In Short]. The Ld. Cit(A) Has Erred In Holding That The Assessee Is Not Entitled To Exemption Under Section 11 Of The Act & Second Ground Relates To Confirmation Of Disallowance Of Depreciation.

For Appellant: Shri R. Vijayaraghavan, AdvocateFor Respondent: Smt. R. Ilavarasi, JCIT
Section 11Section 12ASection 143(1)Section 143(2)Section 143(3)Section 2(15)

…e cost of acquisition of assets were treated as “application of income” for the purpose of claiming exemption under section 11 of the Act, in our opinion, similar issue was considered by the Hon’ble Supreme Court in the case of Nector Beverages Limited v. CIT 314 ITR 314, wherein, it was held that the depreciation is neither a loss nor expenditure. Depreciation is only an “allowance” and the view that depreciation is “expenditure” to be treated as “application of income” for charitable purposes is incorrect. The cost of assets was already allowed as application of income while granting exemption under section 11…

Pahilajrai Jaikishan, Mumbai vs. DCIT 19(3), Mumbai

In the result, the appeal is allowed

ITA 994/MUM/2014[2010-11]Status: DisposedITAT Mumbai01 Feb 2016AY 2010-11

Bench: Shri Shailendra Kumar Yadav & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.1562/Mum/2014 ("नधा"रण वष" / Assessment Year: 2010-11)

Section 14Section 143(2)Section 143(3)Section 14ASection 37(1)Section 40

…14A of the Act deals with only expenditure incurred and not any statutory allowances and depreciation is a statutory allowance u/s 32 of the Act relying upon the decision of Hon’ble Supreme Court in the case of Nectar Beverages Private Limited v. DCIT (2009) 314 ITR 314(SC). 5. The AO rejected the contentions of the assessee firm and held that the basic objective of introduction of section 14A into the Act is to disallow the direct and indirect expenditure incurred in relation to income which does not form part of total & ITA No. 994/Mum/2014 income. The assessee firm has invested in shares and mutual funds who…

Asst CIT 19(3), Mumbai vs. Pahilajrai Jaikishin, Mumbai

In the result, the appeal is allowed

ITA 1562/MUM/2014[2010-11]Status: DisposedITAT Mumbai01 Feb 2016AY 2010-11

Bench: Shri Shailendra Kumar Yadav & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.1562/Mum/2014 ("नधा"रण वष" / Assessment Year: 2010-11)

Section 14Section 143(2)Section 143(3)Section 14ASection 37(1)Section 40

…14A of the Act deals with only expenditure incurred and not any statutory allowances and depreciation is a statutory allowance u/s 32 of the Act relying upon the decision of Hon’ble Supreme Court in the case of Nectar Beverages Private Limited v. DCIT (2009) 314 ITR 314(SC). 5. The AO rejected the contentions of the assessee firm and held that the basic objective of introduction of section 14A into the Act is to disallow the direct and indirect expenditure incurred in relation to income which does not form part of total & ITA No. 994/Mum/2014 income. The assessee firm has invested in shares and mutual funds who…