Sarabhai Management Corporation Ltd. v. CIT

102 ITR 25High Court1976#3756 most cited

What is Sarabhai Management Corporation Ltd. v. CIT authority for?

Business commencement is marked by the first activity undertaken to acquire immovable property, and expenses incurred during the interval between business setup and commencement are deductible.

31

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2014 to 2024.

Also referred to as

Sarabhai Management Corporation Ltd. v. CIT · business commencement · acquisition of immovable property · expenses during interval · deductible expenses · Gujarat High Court

Judgments citing Sarabhai Management Corporation Ltd. v. CIT

ACIT, New Delhi vs. M/S. Asf Insignia Sez Pvt. Ltd., New Delhi

Appeal is dismissed

ITA 6732/DEL/2014[2010-11]Status: DisposedITAT Delhi15 Sept 2017AY 2010-11

Bench: Shri O.P. Kant & Shri Amit Shuklain Ita Nos. 6732 & 6733/Del/2014 Assessment Years: 2010-11 & 2011-12 Acit, Circle-3(2), Vs. Asf Insignia Sez Pvt. Ltd. New Delhi (Earlier Known As Canton Buildwell Pvt. Ltd.), 11, Babar Lane, Bengali Market, New Delhi (Applicant) (Respondent) (Pan: Aaccc7148L) Co. No. 194/Del/2015 Assessment Year: 2011-12 Asf Insignia Sez Pvt. Ltd. Vs. Acit, Circle-3(2), (Earlier Known As Canton New Delhi Buildwell Pvt. Ltd.), 11, Babar Lane, Bengali Market, New Delhi (Applicant) (Respondent) (Pan: Aaccc7148L) Revenue By: Shri R.C. Dande, Sr. Dr Assessee By: Ms. Rano Jain, Adovcate Shri Ashish Goel, Ca

For Appellant: Ms. Rano Jain, AdovcateFor Respondent: Shri R.C. Dande, Sr. DR
Section 143(3)

…ey might be a gap between the date on which the business is set up and the date of commencement of the business. The contention of the assessee also finds support from the judgments of the High Court in the case of CIT vs. Sarabhai Management Corporation Ltd. 102 ITR 25 (Guj) and CIT vs. Hughes Escorts Communication Ltd. 311 ITR 253 (Del). 6.3. The first appellate authority at para 5.5 held as follows: "In the present case before me, the appellant company, as stated herein above, has started systematic business activities. It has recruited the various staff and the staff(s) (sic) (are) engaged in carrying on the…

ACIT, New Delhi vs. M/S. Ats Estates Pvt. Ltd., New Delhi

Appeal is dismissed

ITA 6753/DEL/2014[2008-09]Status: DisposedITAT Delhi11 Sept 2017AY 2008-09

Bench: Shri O.P. Kant & Shri Amit Shuklain Ita Nos. 6732 & 6733/Del/2014 Assessment Years: 2010-11 & 2011-12 Acit, Circle-3(2), Vs. Asf Insignia Sez Pvt. Ltd. New Delhi (Earlier Known As Canton Buildwell Pvt. Ltd.), 11, Babar Lane, Bengali Market, New Delhi (Applicant) (Respondent) (Pan: Aaccc7148L) Co. No. 194/Del/2015 Assessment Year: 2011-12 Asf Insignia Sez Pvt. Ltd. Vs. Acit, Circle-3(2), (Earlier Known As Canton New Delhi Buildwell Pvt. Ltd.), 11, Babar Lane, Bengali Market, New Delhi (Applicant) (Respondent) (Pan: Aaccc7148L) Revenue By: Shri R.C. Dande, Sr. Dr Assessee By: Ms. Rano Jain, Adovcate Shri Ashish Goel, Ca

For Appellant: Ms. Rano Jain, AdovcateFor Respondent: Shri R.C. Dande, Sr. DR
Section 143(3)

…ey might be a gap between the date on which the business is set up and the date of commencement of the business. The contention of the assessee also finds support from the judgments of the High Court in the case of CIT vs. Sarabhai Management Corporation Ltd. 102 ITR 25 (Guj) and CIT vs. Hughes Escorts Communication Ltd. 311 ITR 253 (Del). 6.3. The first appellate authority at para 5.5 held as follows: "In the present case before me, the appellant company, as stated herein above, has started systematic business activities. It has recruited the various staff and the staff(s) (sic) (are) engaged in carrying on the…

DCIT Cen Cir 2(3), Mumbai vs. Hagwood Commercial Developers P.Ltd, Mumbai

In the result appeal of the assessee in ITA no

ITA 1540/MUM/2015[2012-13]Status: DisposedITAT Mumbai08 Feb 2017AY 2012-13

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.1306/Mum/2015 ("नधा"रण वष" / Assessment Year : 2012-13) M/S Hagwood Commercial Acit, Cc -13, बनाम/ Developers Pvt. Ltd., Old Cgo, V. 105/106, Provogue House, M.K. Road, Off. New Link Road, Churchgate, Andheri (West), Mumbai. Mumbai – 400 053. "थायी लेखा सं./Pan : Aabch7508Q (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

For Appellant: Shri Rushabh MehtaFor Respondent: Dr. Santosh Mankaskar,DR
Section 132Section 143(3)Section 153ASection 153C

…rs & Development (P.) Ltd. [2013] 34 taxmann.com 18 (Delhi). 2. CIT v. Sarabhai Management Corpn. Ltd. [1991] 192 ITR 151 (SC) wherein Hon’ble Supreme Court affirmed the decision of Hon’ble Gujarat High Court in Sarabhai Management Corp. Ltd. v. CIT in (1976) 102 ITR 25(Guj.) The ld. Counsel submitted that in the instant case business was set up when the assessee acquired land and obtained permissions from Government to construct Mall and residential project at Nagpur. He also drew our attention to paper book page No. 11 whereby it is certified by the Auditors that the applicable accounting standards referred to…

DCIT Cen Cir 2(3), Mumbai vs. Alliance Mall Developers Co. P.Ltd, Mumbai

In the result appeal of the assessee in ITA no

ITA 1539/MUM/2015[2012-13]Status: DisposedITAT Mumbai08 Feb 2017AY 2012-13

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.1306/Mum/2015 ("नधा"रण वष" / Assessment Year : 2012-13) M/S Hagwood Commercial Acit, Cc -13, बनाम/ Developers Pvt. Ltd., Old Cgo, V. 105/106, Provogue House, M.K. Road, Off. New Link Road, Churchgate, Andheri (West), Mumbai. Mumbai – 400 053. "थायी लेखा सं./Pan : Aabch7508Q (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

For Appellant: Shri Rushabh MehtaFor Respondent: Dr. Santosh Mankaskar,DR
Section 132Section 143(3)Section 153ASection 153C

…rs & Development (P.) Ltd. [2013] 34 taxmann.com 18 (Delhi). 2. CIT v. Sarabhai Management Corpn. Ltd. [1991] 192 ITR 151 (SC) wherein Hon’ble Supreme Court affirmed the decision of Hon’ble Gujarat High Court in Sarabhai Management Corp. Ltd. v. CIT in (1976) 102 ITR 25(Guj.) The ld. Counsel submitted that in the instant case business was set up when the assessee acquired land and obtained permissions from Government to construct Mall and residential project at Nagpur. He also drew our attention to paper book page No. 11 whereby it is certified by the Auditors that the applicable accounting standards referred to…

Alliance Mall Developers Co. P. Ltd, Mumbai vs. ACIT Cen Cir 13, Mumbai

In the result appeal of the assessee in ITA no

ITA 1308/MUM/2015[2012-13]Status: DisposedITAT Mumbai08 Feb 2017AY 2012-13

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.1306/Mum/2015 ("नधा"रण वष" / Assessment Year : 2012-13) M/S Hagwood Commercial Acit, Cc -13, बनाम/ Developers Pvt. Ltd., Old Cgo, V. 105/106, Provogue House, M.K. Road, Off. New Link Road, Churchgate, Andheri (West), Mumbai. Mumbai – 400 053. "थायी लेखा सं./Pan : Aabch7508Q (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

For Appellant: Shri Rushabh MehtaFor Respondent: Dr. Santosh Mankaskar,DR
Section 132Section 143(3)Section 153ASection 153C

…rs & Development (P.) Ltd. [2013] 34 taxmann.com 18 (Delhi). 2. CIT v. Sarabhai Management Corpn. Ltd. [1991] 192 ITR 151 (SC) wherein Hon’ble Supreme Court affirmed the decision of Hon’ble Gujarat High Court in Sarabhai Management Corp. Ltd. v. CIT in (1976) 102 ITR 25(Guj.) The ld. Counsel submitted that in the instant case business was set up when the assessee acquired land and obtained permissions from Government to construct Mall and residential project at Nagpur. He also drew our attention to paper book page No. 11 whereby it is certified by the Auditors that the applicable accounting standards referred to…

Higwood Commerical Developers P.Ltd, Mumbai vs. ACIT Cen Cir 13, Mumbai

In the result appeal of the assessee in ITA no

ITA 1306/MUM/2015[2012-13]Status: DisposedITAT Mumbai08 Feb 2017AY 2012-13

Bench: Shri Saktijit Dey & Shri Ramit Kocharआयकर अपील सं./I.T.A. No.1306/Mum/2015 ("नधा"रण वष" / Assessment Year : 2012-13) M/S Hagwood Commercial Acit, Cc -13, बनाम/ Developers Pvt. Ltd., Old Cgo, V. 105/106, Provogue House, M.K. Road, Off. New Link Road, Churchgate, Andheri (West), Mumbai. Mumbai – 400 053. "थायी लेखा सं./Pan : Aabch7508Q (अपीलाथ" /Appellant) .. (""यथ" / Respondent)

For Appellant: Shri Rushabh MehtaFor Respondent: Dr. Santosh Mankaskar,DR
Section 132Section 143(3)Section 153ASection 153C

…rs & Development (P.) Ltd. [2013] 34 taxmann.com 18 (Delhi). 2. CIT v. Sarabhai Management Corpn. Ltd. [1991] 192 ITR 151 (SC) wherein Hon’ble Supreme Court affirmed the decision of Hon’ble Gujarat High Court in Sarabhai Management Corp. Ltd. v. CIT in (1976) 102 ITR 25(Guj.) The ld. Counsel submitted that in the instant case business was set up when the assessee acquired land and obtained permissions from Government to construct Mall and residential project at Nagpur. He also drew our attention to paper book page No. 11 whereby it is certified by the Auditors that the applicable accounting standards referred to…

ACIT 10(1), Mumbai vs. Gattefosse India P. Ld, Mumbai

In the result, appeal of revenue is dismissed

ITA 333/MUM/2013[2009-10]Status: DisposedITAT Mumbai04 Mar 2016AY 2009-10
For Appellant: Ms. Sonalee GodboleFor Respondent: Smt. Anu K. Aggarwal
Section 3

…ted simultaneously in order that the business may commence. The business would commence when the activity which is first in point of time and which much necessarily preceded all other activities is started". (iii) Sarabhai Management Corp. Ltd. vs. CIT (1965) 102 ITR 25, "the Hon'ble Gujarat High Court has recognized that there may be interval between the setting up of the business and commencement of business and held that all expenses incurred during that interval would be a permissible deduction. The decision of Gujarat High Court was affirmed by the Apex Court which is reported in 192 ITR 151". By analyzing t…

DCIT, New Delhi vs. M/S Dlf Homes Panchkula Pvt. Ltd., New Delhi

In the result appeal of the department is dismissed

ITA 4344/DEL/2012[2009-10]Status: DisposedITAT Delhi14 Oct 2015AY 2009-10

Bench: Sh. N. K. Saini, Am & Sh. C. M. Garg, Jm Ita No. 4344/Del/2012 : Asstt. Year : 2009-10 Dcit, Vs M/S Dlf Homes Panchkula Pvt. Ltd. Circle-10(1), 1-E, Naaz Cinema Complex, New Delhi Jhandewalan Extn., New Delhi (Appellant) (Respondent) Pan No. Aabch8735M Assessee By : Sh. R. S. Singvi, Ca Revenue By: Smt. Parwinder Kaur, Sr. Dr Date Of Hearing : 31.07.2015 Date Of Pronouncement : 14.10.2015 Order Per N.K. Saini, A.M. This Is An Appeal By The Department Against The Order Dated 24.05.2012 Of The Ld. Cit(A)-Xiii, New Delhi.

For Appellant: Sh. R. S. Singvi, CAFor Respondent: Smt. Parwinder Kaur, Sr. DR
Section 4Section 5A

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’, NEW DELHI Before Sh. N. K. Saini, AM And Sh. C. M. Garg, JM ITA No. 4344/Del/2012 : Asstt. Year : 2009-10 DCIT, Vs M/s DLF Homes Panchkula Pvt. Ltd. Circle-10(1), 1-E, Naaz Cinema Complex, New Delhi Jhandewalan Extn., New Delhi (APPELLANT) (RESPONDENT) PAN No. AABCH8735M Assessee by : Sh. R. S. Singvi, CA Revenue by: Smt. Parwinder Kaur, Sr. DR Date of Hearing : 31.07.2015 Date of Pronouncement : 14.10.2015 ORDER PER N.K. SAINI, A.M. This is an appeal by the department against the order dated 24.05.2012 of the ld. CIT(A)-XIII, New Delhi. 2. The only effecti…

M/S. Matrix Infrastructure, New Delhi vs. ITO, New Delhi

In the result the appeal of the assessee is partly allowed and the appeal of the revenue is dismissed

ITA 5428/DEL/2010[2007-08]Status: DisposedITAT Delhi30 Sept 2015AY 2007-08

Bench: Sh. A. T. Varkey, Jm & Sh. O.P.Kant, Am

For Appellant: Dr. Rakesh Gupta, AdvFor Respondent: Sh. P. Dam Kanunjna, Sr. DR
Section 143(3)Section 40

…ying on any of these activities including the first activity is also deductible in computing the profits and gains of the assessee for the relevant year when the activity is undertaken. In Sarabhai Management Corporation Ltd. Vs. CIT 1975 CTR (Guj) 111 (1976) 102 ITR 25 (Guj), the Gujarat High Court took the same view and held that the business commences with the first activity for acquiring by purchase or otherwise, immovable property. There may be an interval between the setting up of the business and the commencement of the business. All expenses incurred during that interval are also permissible for deduction…

Commissioner of Income Tax vs. Jubilant Offshore Drilling Pvt Ltd

The appeal is dismissed in limine

ITA/694/2014HC Delhi24 Nov 2014
Section 271(1)(c)

…business may commence. The business would commence when the activity which is first in point of time and which must necessarily precede the other activities is started.” A similar view was taken in Sarabhai Management Corporation Ltd versus CIT [1976] 102 ITR 25 (Guj.), which was upheld by the Supreme Court vide its order reported in [1991] 192 ITR 151 (SC). 6. The respondent-assessee being conscious of the fact that revenue would be generated once the oil production commenced had capitalised the expenditure on oil exploration cost and the same was reflected as “capital work in progress” in the bala…

Carefour Wc&C India Private Limited vs. Deputy Commissioner of Income Tax

ITA/42/2014HC Delhi22 Sept 2014
Section 260ASection 28Section 43D

…urred for carrying on any of these activities including the first activity is also deductible in computing the profits and gains of the assessee for the relevant year when the activity is undertaken. In Sarabhai Management Corporation Ltd. v. CIT, [1976] 102 ITR 25, the Gujarat High Court took the same view and held that the business commences with the first activity for acquiring by purchase or otherwise, immovable property. There may be an interval between the setting up of the business and the commencement of the business. All expenses incurred during that interval are also permissible for deductio…