Nonsuch Tea Estate Ltd. v. CIT

98 ITR 189Supreme Court of India1975#8031 most cited

What is Nonsuch Tea Estate Ltd. v. CIT authority for?

A liability accrues only when it is determined and crystallized, or when required prior approval for incurring the expenditure has been obtained. Merely relating to an earlier year or a potential future obligation does not make it a liability in that earlier year.

14

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2008 to 2023.

Also referred to as

Nonsuch Tea Estate Ltd. v. CIT · 98 ITR 189 · liability accrual · determined and crystallized · prior approval · mercantile system of accounting · expenses · deductions

Judgments citing Nonsuch Tea Estate Ltd. v. CIT

Principal Commissioner of Income Tax 2 Kolkata vs. Balmer Lawrie and Co Ltd

In the result, the appeal filed by the revenue is dismissed on the ground

ITAT/259/2022HC Calcutta13 Apr 2023

Bench: HON'BLE T.S. SIVAGNANAM, ACTING CHIEF JUSTICE,HON'BLE JUSTICE HIRANMAY BHATTACHARYYA

Section 143(3)Section 260A

…the true or correct profits. After referring to the item No. 7 of Accounting Standards- II (AS II), it was stated that the statute itself prescribes the manner of disclosure of expenses 1 [1975] 98 ITR 189 (SC) 2 129 ITR 62 Cal 3 [2010] 8 taxmann.com 249 (Delhi) ITAT NO. 259 OF 2022 REPORTABLE Page 5 of 18 relating to prior period, which arises in the previous year as a separate item. It was ther…

Jindal Stainless Ltd., Hisar vs. DCIT, New Delhi

In the result, the appeal of the assessee is allowed in part for

ITA 6518/DEL/2016[2010-11]Status: DisposedITAT Delhi30 Sept 2020AY 2010-11

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble[Assessment Year: 2009-10] [Assessment Year: 2010-11]

For Appellant: Shri Ajay Vohra, AdvFor Respondent: Shri M. Barnwal, Sr. DR
Section 14A

…aimed the expenses in the earlier year does not hold any water as the said expenses were neither determined nor had crystallized in the earlier year. 61. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Nonsuch Tea Estate Ltd. 98 ITR 189 and the Hon'ble Gujarat High Court in the case of Saurashtra Cement & Chemical Industries213 ITR 523 wherein it has been held that merely because an expense relates to a transaction of an earlier year it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallized in the year…

Jindal Stainless Ltd., Hisar vs. DCIT, New Delhi

In the result, the appeal of the assessee is allowed in part for

ITA 6517/DEL/2016[2009-10]Status: DisposedITAT Delhi30 Sept 2020AY 2009-10

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble[Assessment Year: 2009-10] [Assessment Year: 2010-11]

For Appellant: Shri Ajay Vohra, AdvFor Respondent: Shri M. Barnwal, Sr. DR
Section 14A

…aimed the expenses in the earlier year does not hold any water as the said expenses were neither determined nor had crystallized in the earlier year. 61. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Nonsuch Tea Estate Ltd. 98 ITR 189 and the Hon'ble Gujarat High Court in the case of Saurashtra Cement & Chemical Industries213 ITR 523 wherein it has been held that merely because an expense relates to a transaction of an earlier year it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallized in the year…

DCIT, New Delhi vs. M/S. Jindal Stainless Ltd., Haryana

In the result, the appeal of the assessee is allowed in part for

ITA 5095/DEL/2016[2007-08]Status: DisposedITAT Delhi30 Sept 2020AY 2007-08

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble[Assessment Year: 2009-10] [Assessment Year: 2010-11]

For Appellant: Shri Ajay Vohra, AdvFor Respondent: Shri M. Barnwal, Sr. DR
Section 14A

…aimed the expenses in the earlier year does not hold any water as the said expenses were neither determined nor had crystallized in the earlier year. 61. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Nonsuch Tea Estate Ltd. 98 ITR 189 and the Hon'ble Gujarat High Court in the case of Saurashtra Cement & Chemical Industries213 ITR 523 wherein it has been held that merely because an expense relates to a transaction of an earlier year it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallized in the year…

DCIT, New Delhi vs. M/S. Jindal Stainless Ltd., Hisar

In the result, the appeal of the assessee is allowed in part for

ITA 6539/DEL/2016[2010-11]Status: DisposedITAT Delhi30 Sept 2020AY 2010-11

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble[Assessment Year: 2009-10] [Assessment Year: 2010-11]

For Appellant: Shri Ajay Vohra, AdvFor Respondent: Shri M. Barnwal, Sr. DR
Section 14A

…aimed the expenses in the earlier year does not hold any water as the said expenses were neither determined nor had crystallized in the earlier year. 61. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Nonsuch Tea Estate Ltd. 98 ITR 189 and the Hon'ble Gujarat High Court in the case of Saurashtra Cement & Chemical Industries213 ITR 523 wherein it has been held that merely because an expense relates to a transaction of an earlier year it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallized in the year…

Fouress Engg (I) Ltd, Mumbai vs. DCIT 5(1), Mumbai

In the result the ground No

ITA 754/MUM/2016[2011-12]Status: DisposedITAT Mumbai23 Mar 2018AY 2011-12

Bench: Shri Pawan Singh & Shri Rajesh Kumarm/S Fouress Engg (I) Ltd. Dcit Range-5(1) 22, Bhulabhai Desai Road, Aayakar Bhavan, Mahalaxmi Chamber, Vs. Mumbai-20. Mumbai-400026 Pan:Aaacf5897K (Appellant) (Respondent) Assessee By Dr.K. Shivram With : Ms Nilam Jadhav -Advocates Revenue By : Ms. Pooja Swaroop ( Sr. Dr) Date Of Hearing : 19.03.2018 Date Of Pronouncement : 23.03.2018 Order Under Section 254(1) Of Income Tax Act Per Pawan Singh: 1. This Appeal By Assessee Under Section 253 Of Income Tax Act (‘The Act’) Is Directed Against The Order Of Ld. Commissioner Of Income-Tax (Appeals)-10

For Respondent: Ms. Pooja Swaroop ( Sr. DR)
Section 137(1)Section 143(3)Section 14ASection 253Section 254(1)Section 37(1)

…essee relied upon the decision of Hon'ble ITA No. 754/Mum/2016 - M/s Fouress Engg (I) Ltd. Delhi High Court in CIT Vs. Exxon Mobile Lubricants (P) Ltd. [2010] 328 ITR 17 (Del) and the decision of Hon'ble Apex Court in Nonsuch Tea State Ltd. Vs. CIT [1975] 98 ITR 189 (SC). On the contrary, the Ld. DR for the Revenue supported the order of authorities below. The ld. submits that the assessee is following the mercantile system of accounting. The expenditure claimed by the assessee was not related to the year under consideration. 13. We have considered the rival submission of the parties and perused the order of…

ITO, WD-5(3), Kolkata vs. M/S Bengal NRI Complex Ltd., Kolkata

In the result, the assessee’s appeal is partly allowed and the Revenue’s appeal is dismissed

ITA 1290/KOL/2014[2010-2011]Status: DisposedITAT Kolkata16 Mar 2018AY 2010-2011

Bench: Shri P.M. Jagtap, Am & Shri A.T. Varkey, Jm]

Section 195Section 40

…only the excess sum of Rs.16,72,607/- was disallowed by the Ld. AO. Aggrieved, assessee preferred appeal before the Ld. CIT(A), who upheld the disallowance of Rs.16,72,607/- following the decision of Supreme Court in the case of Nonsuch Tea Estate Ltd Vs CIT (98 ITR 189). Aggrieved, the assessee is in further appeal before us. 4.2 We have heard the rival submissions and perused the material placed in the paper book, from which we find that Mr. Todi was appointed as its Managing Director in 2004 for a period of three years. Remuneration paid to Mr. Todi was allowed as deduction in the income-tax assessments of th…

Bengal NRI Complex Limited, Kolkata vs. ITO, WD-5(3), Kolkata

In the result, the assessee’s appeal is partly allowed and the Revenue’s appeal is dismissed

ITA 1088/KOL/2014[2010-2011]Status: DisposedITAT Kolkata16 Mar 2018AY 2010-2011

Bench: Shri P.M. Jagtap, Am & Shri A.T. Varkey, Jm]

Section 195Section 40

…only the excess sum of Rs.16,72,607/- was disallowed by the Ld. AO. Aggrieved, assessee preferred appeal before the Ld. CIT(A), who upheld the disallowance of Rs.16,72,607/- following the decision of Supreme Court in the case of Nonsuch Tea Estate Ltd Vs CIT (98 ITR 189). Aggrieved, the assessee is in further appeal before us. 4.2 We have heard the rival submissions and perused the material placed in the paper book, from which we find that Mr. Todi was appointed as its Managing Director in 2004 for a period of three years. Remuneration paid to Mr. Todi was allowed as deduction in the income-tax assessments of th…

Vaas Industries Pvt. Ltd., Chennai vs. DCIT, Chennai

In the result the appeal of the assessee for the assessment year 2007-08 is partly allowed and the appeal of the assessee for the assessment year 2008-09 is allowed for statistical purposes

ITA 79/CHNY/2017[2008-09]Status: DisposedITAT Chennai16 Jan 2018AY 2008-09

Bench: Shri N.R.S. Ganesan & Shri A.Mohan Alankamony

For Respondent: Shri AR.V. Sreenivasan, JCIT
Section 143(1)Section 147Section 194CSection 250(6)Section 36(1)(v)Section 40Section 43B

…scheme of LIC. Since the assessee company had failed to produce the approval of such fund from the appropriate Authority, the Ld.AO disallowed the expenditure relying in the decision of the Hon’ble Apex Court in the case Nonsuch Tea Estate Limited reported in 98 ITR 189, wherein it was held that “if any expenditure to be incurred under some law, which requires prior approval of the Government, the liability to incur such expenditure does not accrue, unless such approval has been obtained from the competent person.” On appeal the Ld.CIT(A) confirmed the order of the Ld.AO by placing reliance in the various decisio…

M/S. Housing & Urban Development Corporation Ltd., New Delhi vs. DCIT, New Delhi

In the result ground No. 3 of the appeal of the assessee is allowed accordingly

ITA 1165/DEL/2012[2004-05]Status: DisposedITAT Delhi07 Oct 2016AY 2004-05

Bench: Shri Sudhanshu Srivastava & Shri Prashant Maharishihousing & Urban Development Dcit, Corporation Ltd., Hudco Circle-12(1), Vs. Bhawan, Lodhi Road, New Delhi, New Delhi Pan:Aaach0632A (Appellant) (Respondent)

For Appellant: Sh. Gagan Kumar, AdvFor Respondent: Sh. A. K. Saroha, CIT DR
Section 143Section 143(3)Section 263

…the appellant during the year and therefore it is accrued during the year and hence it is allowable during the year only. He relied upon the decision of the Hon’ble Supreme Court of India in case of Non such Tea Estate P Ltd versus Commissioner of Income Tax 98 ITR 189 (SC). 7. Ld. Departmental representative submitted that interest payable by the assessee is pertaining to the earlier years and not of this year as this outstanding subsidy was lying in the books of accounts of the assessee for several past years and the claim of the government was also placed several years, before the year in which it is accounte…

Sqny Granites, Sivakasi vs. DCIT, Madurai

In the result, the appeal of the assessee in ITA

ITA 1307/CHNY/2015[2009-10]Status: DisposedITAT Chennai16 Oct 2015AY 2009-10

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.No.1307/Mds/2015 "नधा"रण वष" /Assessment Year : 2009-2010

For Appellant: Shri. V. Rajasekaran, C.AFor Respondent: Shri. P. Radhakrishnan, IRS, JCIT
Section 132Section 133ASection 143(3)Section 153C

…2002 and the Hon’ble High Court allowed the claim of the assessee for the :- 4 -: assessment year 2003-2004 and also on the decisions of Supreme Court in the case of Bharat Earth Movers vs. CIT (2000) 162 CTR 325 and Non Such Tea Estate Ltd vs. CIT (1975) 98 ITR 189. In the appellate proceedings, the assessee has filed a copy of the agreement and explained that the assessee firm has adequate interest free funds received from other sister concerns and utilized to pay another sister concern and no interest is charged or crystallized in financial year 2008-09. The ld. CIT(A) heard the submissions and perused…

Commissioner of Income Tax vs. Exxon Mobil Lubricants Pvt Ltd

ITA - 288 / 2010HC Delhi08 Sept 2010
Section 260

…$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 288/2010 COMMISSIONER OF INCOME TAX ..... Appellant Through: Ms. Prem Lata Bansal, Advocate versus EXXON MOBIL LUBRICANTS PVT. LTD. ..... Respondent Through: Ms.Shashi M. Kapila, Advocate with Mr. Siddharth Kapil, Mr. Pranav Bhaskar and Mr. Pranesh Sharma, Advs. % Reserved on: 05th August, 2010 Date of Decision: 08th September, 2010 CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN 1. Whether the R…

Commissioner of Income Tax vs. Exxon Mobil Lubricants Pvt. Ltd

ITA/288/2010HC Delhi08 Sept 2010
Section 260

…$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 288/2010 COMMISSIONER OF INCOME TAX ..... Appellant Through: Ms. Prem Lata Bansal, Advocate versus EXXON MOBIL LUBRICANTS PVT. LTD. ..... Respondent Through: Ms.Shashi M. Kapila, Advocate with Mr. Siddharth Kapil, Mr. Pranav Bhaskar and Mr. Pranesh Sharma, Advs. % Reserved on: 05th August, 2010 Date of Decision: 08th September, 2010 CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN 1. Whether the R…

Commissioner of Income Tax vs. Eds Electronics Data Systems (India) P.Ltd

The appeal is dismissed

ITA/734/2008HC Delhi29 Sept 2008

Bench: This Court. One Was With Regard To The Payment Made To

For Appellant: Ms Prem Lata BansalFor Respondent: Mr Aseem Mowar with Ms Mallika Poswal and
Section 115Section 260

…the premise that since the approval of the agreement had not been received during the year in question, no liability under a valid contract arose. Reliance had been placed on the decision of the Supreme Court in the case of Nonsuch Tea Estate Ltd v. CIT: 98 ITR 189. The learned counsel for the revenue also advanced the very same argument and placed reliance on the said decision of the Supreme Court. 5. We may note that the Commissioner of Income Tax (Appeals) had deleted the addition made by the Assessing officer after holding that the assessee was following the mercantile system of accounting and…

Nonsuch Tea Estate Ltd. v. CIT (98 ITR 189) — Cited in 14 Judgments | BharatTax