Ramchandar Shivnarayan v. CIT

111 ITR 263Supreme Court of India1978#2379 most cited

What is Ramchandar Shivnarayan v. CIT authority for?

A business loss is deductible if it has a direct and proximate nexus with business operations or is incidental to them, applying a commercial standard, even without an explicit statutory provision for its deduction.

48

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2016 to 2025.

Also referred to as

Ramchandar Shivnarayan v. CIT · 111 ITR 263 · Supreme Court · business loss deductibility · direct proximate nexus · incidental to business · commercial standard · Section 28 · Section 36(2) · non-recovery of advances as business loss

Sections most often in play

Section 143(3)Section 28Section 36(2)Section 10(2)(xi) of Indian I. T. Act 1922Section 10(2)(xv) of Indian I. T. Act 1922Section 147Section 148Section 14A

Issues it is cited on

proximate nexussection 36(2)protective assessmentsection 269sstatement under section 132(4)section 131(1a)retracted statementbusiness expediencysource of sourcesection 269sssection 41(1)section 36(1)(iii)

Judgments citing Ramchandar Shivnarayan v. CIT

DCIT 10(1)(1), Mumbai vs. Haldyn Glass Ltd, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 2043/MUM/2015[2010-11]Status: DisposedITAT Mumbai11 Oct 2017AY 2010-11

Bench: Shri G.S. Pannu, Hon'Ble & Shri C.N. Prasad, Hon'Ble

For Appellant: Shri Piyush ChaturvediFor Respondent: Shri Ram Tiwari
Section 143(3)Section 28Section 37(1)Section 41(1)

…ssessable profit under s.10(1) of the 1922 Act. 3.3.5 Similarly in the case of G.G. Dandekar Machine Works Ltd vs. CIT (1993) 202 ITR 161 (Bom) relying on the decision of CIT vs. Nainital Bank Ltd. (1965) 55 FIR 707 (SC),Ramchandar Shivnarayan vs. CIT (1978) 111 ITR 263 (SC), Sassoon J. David Co, (P) Ltd.vs. CIT (1975) 98 ITR 50 (Bom), CIT vs.P.V.Gore &. Co. (1983) 143 ITR 922(Bom) and Badridas Daga vs. CIT(1958) 34 ITR 10 (SC) , it was held that the real controversy that falls for determination in such cases is whether the loss is incidental to the operation of the business and. this question evidently has to b…

Alfa Transformers Ltd., Bhubaneswar vs. ACIT, Circle-2(1), Bhubaneswar

In the result, appeal filed by the assessee is allowed

ITA 35/CTK/2017[2006-07]Status: DisposedITAT Cuttack26 Apr 2017AY 2006-07

Bench: S/Shri N.S Saini & Kuldip Singhassessment Year :2006-07

For Appellant: Shri Prajna Raj Mohanty, ARFor Respondent: Shri A.Tigga, DR
Section 143(3)Section 145Section 145A

…d numerous judgments of various courts where such losses were allowed as deduction while determining the profit under the business head. Some of them are detailed as under for the purpose of the reference. In the case of Ramchandar Shivnarayan vs. CIT (1978) 111 ITR 263 (SC) the Apex Court affirming the order of the Hon'ble High Court of Madras has held that if there is a direct and proximate nexus between the business operation and the loss or it is incidental to it, then the loss Asse ssment Year :20 06- 07 is deductible, as, without the business operation and doing all that is incidental to it, no profit can…

Alfa Transformers Ltd., Bhubaneswar vs. ACIT, Circle-2(1), Bhubaneswar

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

ITA 446/CTK/2014[2007-08]Status: DisposedITAT Cuttack26 Apr 2017AY 2007-08

Bench: S/Shri N.S Saini & Kuldip Singhassessment Year : 2007-08

For Appellant: Shri Prajna Raj Mohanty, ARFor Respondent: Shri A. Tigga, DR
Section 28Section 36(1)(vii)Section 37

…d numerous judgments of various courts where such losses were allowed as deduction while determining the profit under the business head. Some of them are detailed as under for the purpose of the reference. In the case of Ramchandar Shivnarayan vs. CIT (1978) 111 ITR 263 (SC) the Apex Court affirming the order of the Hon'ble High Court of Madras has held that if there is a direct and proximate nexus between the business operation and the loss or it is incidental to it, then the loss Asse ssment Year : 20 07- 08 is deductible, as, without the business operation and doing all that is incidental to it, no profit ca…

National Housing Bank, New Delhi vs. Addl. CIT, New Delhi

In the result ground No. 8 of the appeal of the assessee is allowed with above direction

ITA 3704/DEL/2010[2007-08]Status: DisposedITAT Delhi14 Feb 2017AY 2007-08

Bench: Shri Kuldip Singh & Shri Prashant Maharishinational Housing Bank, Addl Cit, Core-5A, India Habitat Centre, Range-31(1), Vs. Lodhi Road, New Delhi New Delhi (Appellant) (Respondent) National Housing Bank, Addl Cit, Core-5A, India Habitat Centre, Range-31(1), Lodhi Road, New Delhi Vs. New Delhi (Appellant) (Respondent) National Housing Bank, Addl Cit, Core-5A, India Habitat Centre, Range-31(1), Vs. Lodhi Road, New Delhi New Delhi (Appellant) (Respondent) National Housing Bank, Addl Cit, Core-5A, India Habitat Centre, Range-31(1), Vs. Lodhi Road, New Delhi New Delhi (Appellant) (Respondent) Page 2 Of 50 National Housing Bank, Addl Cit, Core-5A, India Habitat Centre, Range-31(1), Vs. Lodhi Road, New Delhi New Delhi (Appellant) (Respondent) National Housing Bank, Addl Cit, Core-5A, India Habitat Centre, Range-31(1), Vs. Lodhi Road, New Delhi New Delhi (Appellant) (Respondent)

For Appellant: Sh. Ashok Chopra, CAFor Respondent: Sh. Ravi Jain, CIT DR
Section 271Section 36Section 36(1)(vii)

…dulent deals are allowable as deduction: (a) Badrinath Daga v. CIT[1958] 34 ITR 10 (SC) . (b) CIT v. Nainital Bank [1965] 55 ITR 707 (SC) (c) Indian Insurance Banking corporation limited v. CIT [1963] 50 ITR 123 (Ker) (d) Ramachandra Shivnarayan v. CIT [1978] 111 ITR 263 (SC). In Badrinath Daga v. CIT [1958J 34 ITR 10(SC), Hon'ble Supreme Court, while deciding the question whether amount lost through embezzlement by an employee is a trading loss which could be deducted in computing the profits of a business has held that "in deciding whether loss resulting from embezzlement by an employee in a business is admissi…

M/S Ispat Enterprises Pvt. Ltd., Kolkata vs. ITO, Ward-6(2), Kolkata

In the result, the appeal of assessee is partly allowed

ITA 1738/KOL/2016[2011-12]Status: DisposedITAT Kolkata10 Feb 2017AY 2011-12
Section 143(2)

…2 Gross profit ratio= Rs.2.677% as per para 32(a) of Tax Audit Report. Purchase is net of Rs.3569063.20, net Credit note from suppliers. 7. In support of the contentions, the assessee has also relied on the followings:- 1) Ramchandar Sivnarayan v. CIT (1978) 111 ITR 263(SC) 2) Sutlej Cotton Mills Ltd v. CIT (1979) 116 ITR 1 (SC) 3) Davidson of India P.Ltd v. CIT (1983) 140 ITR 344 (Cal). 4) CIT v. Dhnarigiri Raja Narsingiriji 91 ITR 544(SC) 5) CIT v. Dalmia Cement Ltd 254 ITR 377, and 6) CIT v. National Rayan Commercial Co. Ltd 193 ITR 744 8. The CIT-A has not accepted the submissions of assessee for the reason…

Bayer Bioscience Private Limited, Mumbai vs. DCIT, New Delhi

In the result, both the cross appeals filed by the Revenue and the assessee are partly allowed

ITA 2685/DEL/2009[2004-05]Status: DisposedITAT Delhi21 Apr 2016AY 2004-05

Bench: : Shri A.T. Varkey & Shri L.P. Sahuasstt. Year : 2004-05 D.C.I.T. 14(1), Vs. Bayer Bioscience P. Ltd., Mumbai. (Formerly M/S. Proagro Seed Co. P. Ltd. ), Bayer House, Hiranandani Garden, Powai, Mumbai.[Pan: Aaacp 3459M]

For Respondent: Smt. Anima Barnwal, DR

…e and. (ii) they are not merely connected with the trade but are incidental to the trade itself. These principles were affirmed by the Supreme Court in Badridas Daga vs CIT (34 ITR 10), CIT vs Nainital Bank Ltd. (55 ITR 707) and Ramchandar Shivnarayan Vs CIT (111 ITR 263). As regards the deductibility of irrecoverable advances as business loss under section 28, the ld. AR relied 20 ITA No.5388 & 2685/Del./2009 on the following judicial precedents to support that advances which have become irrecoverable, given in the course of carrying on business are an allowable deduction as a business loss while computing the…

M/S. B O C India Ltd., Kolkata vs. A.C.I.T., Cir-12, Kolkata

In the result, assessee’s appeal is partly allowed for statistical purpose

ITA 669/KOL/2008[2003-04]Status: DisposedITAT Kolkata19 Apr 2016AY 2003-04

Bench: Shri Mahavir Singh & Shri Waseem Ahmed

Section 143(3)Section 28

…d numerous judgments of various courts where such losses were allowed as deduction while determining the profit under the business head. Some of them are detailed as under for the purpose of the reference. In the case of Ramchandar Shivnarayan vs. CIT (1978) 111 ITR 263 (SC) the Apex Court affirming the order of the Hon’ble High Court of Madras has held that if there is a direct and proximate nexus between the business operation and the loss or it is incidental to it, then the loss is deductible, as, without the business operation and doing all that is incidental to it, no profit can be earned. It is in that sen…

D.C.I.T., Cir-12, Kolkata vs. M/S. B O C India Ltd

In the result, assessee’s appeal is partly allowed for statistical purpose

ITA 1071/KOL/2008[2003-04]Status: DisposedITAT Kolkata19 Apr 2016AY 2003-04

Bench: Shri Mahavir Singh & Shri Waseem Ahmed

Section 143(3)Section 28

…d numerous judgments of various courts where such losses were allowed as deduction while determining the profit under the business head. Some of them are detailed as under for the purpose of the reference. In the case of Ramchandar Shivnarayan vs. CIT (1978) 111 ITR 263 (SC) the Apex Court affirming the order of the Hon’ble High Court of Madras has held that if there is a direct and proximate nexus between the business operation and the loss or it is incidental to it, then the loss is deductible, as, without the business operation and doing all that is incidental to it, no profit can be earned. It is in that sen…