Prakash Cotton Mills Pvt. Ltd. v. CIT

201 ITR 684Supreme Court of India1993#813 most cited

What is Prakash Cotton Mills Pvt. Ltd. v. CIT authority for?

Compensatory interest or damages paid for a breach of contract, arising in the normal course of business, are allowable as a deduction under section 37(1) as wholly and exclusively incurred for business purposes. This principle extends to indirect taxes paid in the course of business, which are admissible as business expenditure.

128

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2010 to 2026.

Also referred to as

Prakash Cotton Mills v. CIT · Section 37(1) deduction · business expenditure · compensatory interest · damages for breach of contract · indirect tax · allowability of interest · business expediency · Supreme Court · 201 ITR 684

Sections most often in play

Section 37(1)Section 43BSection 36(1)(va)Section 143(3)Section 41(2)Section 201(1A)Section 41(1)Section 145(3)

Issues it is cited on

prohibited by lawinterest under section 201(1a)section 244asection 201(1a)business expediencyemployees contribution to pfinterest on securitiessection 41(1)section 37(1)section 41computer softwareeligible business

Judgments citing Prakash Cotton Mills Pvt. Ltd. v. CIT

SHETH REALTORS,MUMBAI vs. ACIT-CC-7(1), MUMBAI

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

ITA 5947/MUM/2025[2018-19]Status: DisposedITAT Mumbai19 Jan 2026AY 2018-19

Bench: Shri Arun Khodpiashri Sandeep Singh Karhailsheth Realtors Vasant Oasis, Site Office, Upper Basement, Cts No.345A 1 To 3, 345A 5 To 6, Makwana Road, Marol, Andheri (East), ............... Appellant Mumbai – 400059 Pan: Aavfa3975F

For Appellant: Dr. K ShivramFor Respondent: Shri Vivek Perampurna, CIT-DR
Section 133(6)Section 139(1)Section 2(24)(x)Section 250

…ubmission that the interest paid by the assessee was merely compensatory in character besides relying on the case of Mahalakshmi Sugar Mills Co. (supra) also relied on the decisions of the Apex Court in the cases of Prakash Cotton Mills (P.) Ltd. v. CIT[1993] 201 ITR 684 / 67 Taxman 546 ; Malwa Vanaspati & Chemical Co. v. CIT[1997] 225 ITR 383 and CIT v. Ahmedabad Cotton Mfg. Co. Ltd. v. CIT[1994] 205 ITR 163. In all those cases, the Court was concerned with an indirect tax payable by the assessee in the course of its business and admissible as business expenditure. Further, liability for interest which had been…

BHARTI TELEMEDIA LIMITED,NEW DELHI vs. DCIT, CIRCLE-4(2), NEW DELHI

In the result, the appeals of the Assessee are allowed and appeals of the Revenue are dismissed

ITA 624/DEL/2024[2021-22]Status: DisposedITAT Delhi12 Dec 2025AY 2021-22

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 35ASection 4

…es paid for breach of contract, carried on in the normal course of business, is in the nature of expenditure incurred wholly and exclusively for purposes of business, allowable as deduction under section 37(1) of the Act: (o) Prakash Cotton Mills Ltd. v. CIT: 201 ITR 684 (SC) (p) CIT v. Desiccant Rotors International (P.) Ltd.: 347 ITR 32 (Del.) (q) CIT v. Enchante Jewellery Ltd.: 220 Taxman 8 (Del.) (r) New Mahalaxmi Silk Mills Pvt. Ltd.: 206 ITR 302 (Bom.) (s) Golder v. Great Boulder Mines: 33 TC 75 (t) Sardar Prit Inder Singh vs. CIT: 27 Taxman 524 (P&H) (u) CIT v. Neo Structo Construction Ltd: 218 Taxman 24 (…

DCIT, CIRCLE 4(2), NEW DELHI vs. M/S BHARTI TELEMEDIA LTD, NEW DELHI

In the result, the appeals of the Assessee are allowed and appeals of the Revenue are dismissed

ITA 4966/DEL/2024[2020-21]Status: DisposedITAT Delhi12 Dec 2025AY 2020-21

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 35ASection 4

…es paid for breach of contract, carried on in the normal course of business, is in the nature of expenditure incurred wholly and exclusively for purposes of business, allowable as deduction under section 37(1) of the Act: (o) Prakash Cotton Mills Ltd. v. CIT: 201 ITR 684 (SC) (p) CIT v. Desiccant Rotors International (P.) Ltd.: 347 ITR 32 (Del.) (q) CIT v. Enchante Jewellery Ltd.: 220 Taxman 8 (Del.) (r) New Mahalaxmi Silk Mills Pvt. Ltd.: 206 ITR 302 (Bom.) (s) Golder v. Great Boulder Mines: 33 TC 75 (t) Sardar Prit Inder Singh vs. CIT: 27 Taxman 524 (P&H) (u) CIT v. Neo Structo Construction Ltd: 218 Taxman 24 (…

BHARTI TELEMEDIA LIMITED,NEW DELHI vs. DCIT, CIRCLE-4(2), NEW DELHI

In the result, the appeals of the Assessee are allowed and appeals of the Revenue are dismissed

ITA 4960/DEL/2024[2020-21]Status: DisposedITAT Delhi12 Dec 2025AY 2020-21

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 35ASection 4

…es paid for breach of contract, carried on in the normal course of business, is in the nature of expenditure incurred wholly and exclusively for purposes of business, allowable as deduction under section 37(1) of the Act: (o) Prakash Cotton Mills Ltd. v. CIT: 201 ITR 684 (SC) (p) CIT v. Desiccant Rotors International (P.) Ltd.: 347 ITR 32 (Del.) (q) CIT v. Enchante Jewellery Ltd.: 220 Taxman 8 (Del.) (r) New Mahalaxmi Silk Mills Pvt. Ltd.: 206 ITR 302 (Bom.) (s) Golder v. Great Boulder Mines: 33 TC 75 (t) Sardar Prit Inder Singh vs. CIT: 27 Taxman 524 (P&H) (u) CIT v. Neo Structo Construction Ltd: 218 Taxman 24 (…

DCIT, CIRCLE 4(2), NEW DELHI vs. MS BHARTI TELEMEDIA LTD, NEW DELHI

In the result, the appeals of the Assessee are allowed and appeals of the Revenue are dismissed

ITA 4868/DEL/2024[2016-17]Status: DisposedITAT Delhi12 Dec 2025AY 2016-17

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 35ASection 4

…es paid for breach of contract, carried on in the normal course of business, is in the nature of expenditure incurred wholly and exclusively for purposes of business, allowable as deduction under section 37(1) of the Act: (o) Prakash Cotton Mills Ltd. v. CIT: 201 ITR 684 (SC) (p) CIT v. Desiccant Rotors International (P.) Ltd.: 347 ITR 32 (Del.) (q) CIT v. Enchante Jewellery Ltd.: 220 Taxman 8 (Del.) (r) New Mahalaxmi Silk Mills Pvt. Ltd.: 206 ITR 302 (Bom.) (s) Golder v. Great Boulder Mines: 33 TC 75 (t) Sardar Prit Inder Singh vs. CIT: 27 Taxman 524 (P&H) (u) CIT v. Neo Structo Construction Ltd: 218 Taxman 24 (…

ANUPAM INDUSTRIES LIMITED,ANAND vs. THE ACIT, ANAND CIRCLE, ANAND

The appeal of the Department is dismissed

ITA 1882/AHD/2024[2022-23]Status: DisposedITAT Ahmedabad17 Nov 2025AY 2022-23

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Respondent by: Shri Alpesh Parmar, CIT-DRFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 143(3)

…ctual debit of Rs. 9,31,39,795/- representing reversal of CENVAT credit/duty, and that only the amount of Rs. 38,91,205/- represented penalty and fine. Relying on the binding law laid down by the Hon’ble Supreme Court in Prakash Cotton Mills (P.) Ltd. v. CIT (201 ITR 684), the CIT(A) held that where a statutory payment is composite in nature, the authority is duty-bound to bifurcate the penal element from the compensatory or duty component and allow deduction to the extent it represents a compensatory outflow. The CIT(A), on facts, found that the bulk of the amount represented duty which the assessee was otherwis…

ANUPAM INDUSTRIES LIMITED,ANAND vs. THE ACIT, ANANAD CIRCLE, ANAND

The appeal of the Department is dismissed

ITA 982/AHD/2023[2017-18]Status: DisposedITAT Ahmedabad17 Nov 2025AY 2017-18

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Respondent by: Shri Alpesh Parmar, CIT-DRFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 143(3)

…ctual debit of Rs. 9,31,39,795/- representing reversal of CENVAT credit/duty, and that only the amount of Rs. 38,91,205/- represented penalty and fine. Relying on the binding law laid down by the Hon’ble Supreme Court in Prakash Cotton Mills (P.) Ltd. v. CIT (201 ITR 684), the CIT(A) held that where a statutory payment is composite in nature, the authority is duty-bound to bifurcate the penal element from the compensatory or duty component and allow deduction to the extent it represents a compensatory outflow. The CIT(A), on facts, found that the bulk of the amount represented duty which the assessee was otherwis…

ANUPAM INDUSTRIES LIMITED,ANAND vs. THE ACIT, ANAND CIRCLE, ANAND

The appeal of the Department is dismissed

ITA 981/AHD/2023[2014-15]Status: DisposedITAT Ahmedabad17 Nov 2025AY 2014-15

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Respondent by: Shri Alpesh Parmar, CIT-DRFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 143(3)

…ctual debit of Rs. 9,31,39,795/- representing reversal of CENVAT credit/duty, and that only the amount of Rs. 38,91,205/- represented penalty and fine. Relying on the binding law laid down by the Hon’ble Supreme Court in Prakash Cotton Mills (P.) Ltd. v. CIT (201 ITR 684), the CIT(A) held that where a statutory payment is composite in nature, the authority is duty-bound to bifurcate the penal element from the compensatory or duty component and allow deduction to the extent it represents a compensatory outflow. The CIT(A), on facts, found that the bulk of the amount represented duty which the assessee was otherwis…

ASSISTANT COMMISSIONER OF INCOME TAX, ANAND CIRCLE, ANAND vs. ANUPAM INDUSTRIES LIMITED, ANAND

The appeal of the Department is dismissed

ITA 1015/AHD/2023[2017-18]Status: DisposedITAT Ahmedabad17 Nov 2025AY 2017-18

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Respondent by: Shri Alpesh Parmar, CIT-DRFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 143(3)

…ctual debit of Rs. 9,31,39,795/- representing reversal of CENVAT credit/duty, and that only the amount of Rs. 38,91,205/- represented penalty and fine. Relying on the binding law laid down by the Hon’ble Supreme Court in Prakash Cotton Mills (P.) Ltd. v. CIT (201 ITR 684), the CIT(A) held that where a statutory payment is composite in nature, the authority is duty-bound to bifurcate the penal element from the compensatory or duty component and allow deduction to the extent it represents a compensatory outflow. The CIT(A), on facts, found that the bulk of the amount represented duty which the assessee was otherwis…

M/S. SEAVIEW DEVELOPERS LTD.,NEW DELHI vs. DCIT, CIRCLE-23(2), NEW DELHI

In the result, the appeal of assessee is allowed for statistical purposes

ITA 5188/DEL/2017[2014-15]Status: DisposedITAT Delhi30 Sept 2025AY 2014-15

Bench: Shri M Balaganesh & Shri Vimal Kumarassessment Year: 2014-15 M/S. Seaview Developers Private Vs. Deputy Commissioner Of Income Limited, (Formerly Known As Tax, Circle 23(3), ‘Seaview Developers Ltd.), 1102, New Delhi Tower B, 11Th Floor, Peninsula Pin: 1100 02 Business Park, Senapati Bapat Road, Lower Parel, Mumbai- 400013 Pan :Aajcs4143C (Appellant) (Respondent)

Section 115JSection 142(1)Section 143(2)Section 250(6)Section 80Section 801ASection 80I

…f the Act and therefore interest thereon should be allowed as deduction. 6.3 Learned Authorized Representative for the appellant/assessee placed reliance on the judgement of the Hon'ble Supreme Court in the case of Prakash Cotton Mills Pvt. Ltd. v. CIT (1993) 201 ITR 684 (SC) wherein the Hon'ble Apex Court held that any statutory impost paid by an assessee by way of damages or penalty or interest is claimed as an allowable expenditure under 8 ITA No.5188/Del.2017 section 37(1) of the Act, the Revenue has to allow deduction of the same under section 37(1) if the nature of such impost is compensatory in nature. 6.…

PROFESSIONAL AUTOMOTIVES PRIVATE LIMITED,JAMMU vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, JAIPUR

In the result the appeal of the assessee in ITA no

ITA 812/JPR/2025[2016-17]Status: DisposedITAT Jaipur23 Jul 2025AY 2016-17

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI, आयकर अपील /ITA Nos.809 to 815/JP/2025 निर्धारण वर्ष /Assessment Years :2013-14 to 2019-20 Professional Automotives Pvt. बनाम ACIT, Ltd. Bahu Plaza, Bahu Plaza, Jammu Vs. Central Circle- 1, and Kashmir Jaipur स्थायी लेखा सं./जी.आई.आर. सं./PAN/GIR No.:AAACP9608E अपीलार्थी/Appellant प्र]त्यर्थी/Respondent निर्धारिती की ओर से / Assessee by :Shri Tarun Mittal, CA राजस्व की ओर से /Revenue by: Shri Ajey Malik, CIT (Th. V.C)

For Appellant: Shri Tarun Mittal, CAFor Respondent: Shri Ajey Malik, CIT (Th. V.C)
Section 143(3)Section 37(1)

…impugned Explanation 1 in Section 37(1) which provides a deeming provision - was not in existence is not applicable to the present case. The judgement in the case of Prakash Cotton Mills (P.) Ltd. v. Commissioner of Income-tax [1993] 67 Taxman 546 (SC)/[1993] 201 ITR 684 (SC)/[1993] 111 CTR 389 (SC)[06 04-1993] was rendered when the impugned Explanation 1 in Section 37(1) which provides a deeming provision was not in existence. Further the judgement pertains to the issue of interest and damages and does not pertain to the issue of 'offence' and 'compounding' and 'punishment. Thus any further judgement relied upon…

PROFESSIONAL AUTOMOTIVES PRIVATE LIMITED,JAMMU vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRE CIRCLE -1, JAIPUR

ITA 810/JPR/2025[2014-15]Status: DisposedITAT Jaipur23 Jul 2025AY 2014-15
For Appellant: Shri Tarun Mittal, CAFor Respondent: Shri Ajey Malik, CIT (Th. V.C)
Section 143(3)Section 37(1)

…t be an offence”, which is not correct. Going further, ld.CIT(A) at page 65\nquoted certain decisions as “Judgements distinguished” , few of which are as under:\n2. Prakash Cotton Mills (P.) Ltd. v. Commissioner of Income-tax [1993] 67 Taxman\n546 (SC)/[1993] 201 ITR 684 (SC)/[1993] 111 CTR 389 (SC)[06 04-1993]\n3. CIT v. Lokenath& Co. (Construction) [1984] 147 624 /17, Taxman 209\n4. Hon’ble Supreme Court in the case of Commissioner of Income-tax vs. Prakash\nChand Lunia (D) [2023] 149 taxmann.com 416 (SC)/[2023]\n5. Commissioner of Income-tax-II, Ludhiana v. Hero Cycles Ltd. [2009] 178\nTaxman 484 (Punjab &Hary…

DCIT-C-6(2), MUMBAI vs. SAMIRA HABITATS INDIA LIMITED, MUMBAI

In the result, the cross-objection by the assessee for the assessment year 2012-13 is dismissed

ITA 5714/MUM/2024[2012-13]Status: DisposedITAT Mumbai09 May 2025AY 2012-13

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhailita No.5714/Mum/2024 Assessment Year : 2011-12 Assessment Year : 2012-13 Assessment Year : 2009-10

For Appellant: Shri Rakesh JoshiFor Respondent: Dr. Kishor Dhule, CIT-DR
Section 132(4)Section 250

…atory in character besides relying ITA No.5709, 5710, 5714/Mum/2024 & CO No.11, 12 & 13/Mum/2025 27 on the case of Mahalakshmi Sugar Mills Co. (supra) also relied on the decisions of the Apex Court in the cases of Prakash Cotton Mills (P.) Ltd. v. CIT[1993] 201 ITR 684 / 67 Taxman 546 ; Malwa Vanaspati & Chemical Co. v. CIT[1997] 225 ITR 383 and CIT v. Ahmedabad Cotton Mfg. Co. Ltd. v. CIT[1994] 205 ITR 163. In all those cases, the Court was concerned with an indirect tax payable by the assessee in the course of its business and admissible as business expenditure. Further, liability for interest which had been…

SPB PROJECTS AND CONSULTANCY LTD.,CHENNAI vs. ITO CORP. WARD 6(1), CHENNAI

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

ITA 3303/CHNY/2024[2022-23]Status: DisposedITAT Chennai14 Mar 2025AY 2022-23

Bench: Shri George George K & Shri Jagadish

For Appellant: Shri N.R.Suresh, F.C.AFor Respondent: Ms. Anitha, Addl.CIT
Section 143(1)Section 201Section 250Section 36(1)(va)Section 37Section 37(1)Section 43B

…ubmission that the interest paid by the assessee was merely compensatory in character besides relying on the case of Mahalakshmi Sugar Mills Co. (supra) also relied on the decisions of the Apex Court in the cases of Prakash Cotton Mills (P.) Ltd. v. CIT[1993] 201 ITR 684/67 Taxman 546; Malwa Vanaspati & Chemical Co. v. CII[1997] 225 ITR 383 and CIT v. Ahmedabad Cotton Mfg. Co. Ltd. v. CIT[1994] 205 ITR 163. In all those cases, the Court was concerned with an indirect tax payable by the assessee in the course of its business and admissible as business expenditure. Further, liability for interest which had been inc…

EVEREST KANTO CYLINDER LTD ,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, CPC BENGALURU, MUMBAI

In the result, appeal of the assessee bearing ITA No

ITA 782/MUM/2024[2021-22]Status: DisposedITAT Mumbai20 Jan 2025AY 2021-22

Bench: Shri Anikesh Banerjee & Miss Padmavathy S.Everest Kanto Cylinder Ltd Vs Deputy Commissioner Of Income- 204, Raheja Centre, Free Press Tax,Circle 3(4), Mumbai Journal Marg, Nariman Point World Trade Centre 1, Cuffe Parade, Mumbai-400 021 Mumbai-400 005 Pan : Aaace30836F Appellant Respondent

For Appellant: Shri Shekhar GuptaFor Respondent: Shri Biswanath Das CIT DR
Section 143(1)Section 250Section 37(1)Section 41(2)Section 50

…f GST and VAT is duly covered by the order of the Hon’ble Apex Court in the case of Mahalakshmi Sugar Mills Co Ltd vs CIT (1980) 123 ITR 429(SC). We respectfully relied on the order of the Hon’ble Apex Court in the case of Prakash Cotton Mills (P.) Ltd vs CIT 201 ITR 684 (SC) where the Hon’ble Apex Court ruled that the claim of business expenditure under section 37(1) is an allowable expenditure related to interest and damages paid by the assessee was compensatory in nature so as to entitled for deduction under section 37(1) of the Act. Accordingly, we follow the judicial consistency and the order of the Hon’ble…

UPAKAR INFRA PROJECTS PRIVATE LIMITED,HYDERABAD vs. ACIT, CENT CIR-2(4), HYDERABAD

In the result, the appeal of the revenue is dismissed

ITA 379/HYD/2023[2018-19]Status: DisposedITAT Hyderabad07 Jan 2025AY 2018-19

Bench: Shri Laliet Kumar & Shri Madhusudan Sawdia

For Appellant: Shri S. Rama Rao, AdvocateFor Respondent: : Shri Madan Mohan Meena
Section 132Section 139Section 143(2)Section 153CSection 201Section 36(1)(iii)

…of his submission that the interest paid by the assessee was merely compensatory in character besides relying on the case of Makalakshmi Sugar Mills Co. also relied on the decision of the apex court in the cases of Prakash Cotton Mills Pvt. Ltd. V. CIT [1993] 201 ITR 684; Malwa Vansapati and Chemical Co. v. CIT [1997] 225 ITR 383 and CIT vs. Ahmedabad Cotton Manufacturing Co. Ltd. [1994] 205 ITR 163. In all these cases, the court was concerned with an indirect tax payable by the assessee in the course of its business and admissible as business expenditure. 3. The ratio of those cases is not applicable here. Inco…

UPAKAR INFRA PROJECTS PRIVATE LIMITED,HYDERABAD vs. ACIT, CENT CIR-2(4), HYDERABAD

In the result, the appeal of the revenue is dismissed

ITA 378/HYD/2023[2012-13]Status: DisposedITAT Hyderabad07 Jan 2025AY 2012-13

Bench: Shri Laliet Kumar & Shri Madhusudan Sawdia

For Appellant: Shri S. Rama Rao, AdvocateFor Respondent: : Shri Madan Mohan Meena
Section 132Section 139Section 143(2)Section 153CSection 201Section 36(1)(iii)

…of his submission that the interest paid by the assessee was merely compensatory in character besides relying on the case of Makalakshmi Sugar Mills Co. also relied on the decision of the apex court in the cases of Prakash Cotton Mills Pvt. Ltd. V. CIT [1993] 201 ITR 684; Malwa Vansapati and Chemical Co. v. CIT [1997] 225 ITR 383 and CIT vs. Ahmedabad Cotton Manufacturing Co. Ltd. [1994] 205 ITR 163. In all these cases, the court was concerned with an indirect tax payable by the assessee in the course of its business and admissible as business expenditure. 3. The ratio of those cases is not applicable here. Inco…

EASTERN CARGO CARRIERS (INDIA) PRIVATE LIMITED,MUMBAI, MAHARASHTRA, INDIA vs. THE ASSESSMENT UNIT, INCOME TAX DEPARTMENT

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

ITA 4610/MUM/2023[2021-2022]Status: DisposedITAT Mumbai20 Dec 2024AY 2021-2022

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan () Assessment Year: 2021-22 M/S Eastern Cargo Carriers (India) The Assessment Unit, Income Tax Pvt. Ltd., Department, Vs. Unit No. 26, Adarsh Ind. Estates, Aaykar Bhavan, M.K. Road, Sahar Road, Andheri East, Mumbai-400020. Mumbai-400099. Pan No. Aaace 1520 E Appellant Respondent

For Appellant: Mr. Niraj Sheth a/wFor Respondent: Mr. Hemanshu Joshi, Sr. DR
Section 40A(2)(a)

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) Assessment Year: 2021-22 M/s Eastern Cargo Carriers (India) The Assessment Unit, Income Tax Pvt. Ltd., Department, Vs. Unit No. 26, Adarsh Ind. Estates, Aaykar Bhavan, M.K. Road, Sahar Road, Andheri East, Mumbai-400020. Mumbai-400099. PAN NO. AAACE 1520 E Appellant Respondent Assessee by : Mr. Niraj Sheth a/w Mr. Gunjan Kakkad Revenue by : Mr. Hemanshu Joshi, Sr. DR : 10/12/2024 Date of Hearing Date of pronouncement : 20/12/2024 ORDER PER OM PRAKASH KANT, A…

BHARAT TEXTILES AND PROOFING INDUSTRIES LIMITED,CHENNAI vs. ITO, CORP WARD 1(2), CHENNAI

In the result, appeal filed by the assessee is partly allowed

ITA 1621/CHNY/2024[2017-18]Status: DisposedITAT Chennai18 Sept 2024AY 2017-18

Bench: Shri Aby T. Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita No.1621/Chny/2024 िनधा"रण वष"/Assessment Year: 2017-18 V. M/S.Bharat Textiles & Proofing – The Ito, Industries Ltd., Corporate Ward-1(2), New No.64, Old No.43, Chennai. Sattana Naicken Street, Choolai, Chennai-600 112. [Pan: Aaacb 2540 D] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri D. Anand, AdvocateFor Respondent: Shri R. Bhoopathi, Addl.CIT
Section 36(1)(va)Section 37Section 43B

…ere compensatory in nature and hence allowable u/s.36(1)(va) of the Act. For that we rely on the decision of the Hon’ble Supreme Court in the M/s.Bharat Textiles & Proofing Industries Ltd. :: 6 :: case of Prakash Cotton Mills Pvt. Ltd. v. CIT reported [1993] 201 ITR 684 (SC) wherein the Hon’ble Andhra Pradesh High Court’s decision in the case of CIT v. Hyderabad Allwyn Metal Works Ltd. reported in [1988] 172 ITR 113 (AP-HC) was concurred to. It is noted that the Hon’ble Supreme Court in Prakash Cotton Mills Pvt. Ltd. supra concurred with the view of the Division Bench of the Hon’ble Andhra Pradesh High Court,…

ASIATIC COLOUR CHEM INDUSTRIES PRIVATE LTD.,,AHMEDABAD vs. THE JT.. COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1),, AHMEDABAD

In the result, the appeal of the assessee is allowed

ITA 60/AHD/2021[2015-16]Status: DisposedITAT Ahmedabad11 Sept 2024AY 2015-16

Bench: Ms. Suchitra Kamble (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)

For Appellant: Shri Chetan Agrawal, A.RFor Respondent: Shri Ashesh R. Rewar, Sr. D.R
Section 143(3)Section 40Section 92C

…is an allowable expenditure u/s. 37(1) of the Income Tax Act as held in the Hon’ble Supreme Court decision in case of Prakash I.T.A No. 60/Ahd/2021 A.Y. 2015-16 Page No. 6 Asiatic Colour Chem. Industries Pvt. Ltd. vs. Jt. CIT Cotton Mills Pvt. Ltd. vs. CIT 201 ITR 684 wherein the unauthorized structure has been regulated and was treated as a revenue receipt which has impacted the business of the assessee. Thus, this ground no. 1 of assessee’s appeal is allowed. 8 As regards ground no. 2, the ld. Authorized Representative submitted that while confirming the addition of Rs. 38,72,827/- being adjustment made by…

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