SC in CIT v. Delhi Safe Deposits Co. Ltd.

133 ITR 756Supreme Court of India1982#2645 most cited

What is SC in CIT v. Delhi Safe Deposits Co. Ltd. authority for?

Expenditure is laid out wholly and exclusively for the purposes of trade or business when it is incurred by the assessee as incidental to their trade, for the purpose of keeping the trade going and making it pay, and not in any other capacity than as a trader.

44

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2012 to 2025.

Also referred to as

CIT v. Delhi Safe Deposits Co. Ltd. · 133 ITR 756 · Section 37(1) · business expenditure · wholly and exclusively · incidental to trade · keeping trade going · allowed expenses · deductibility of expenses · foreign travel expenditure

Sections most often in play

Section 10AASection 195Section 234BSection 234CSection 271(1)(c)Section 37(1)Section 80IA(8)Section 90

Issues it is cited on

section 24(1)section 80ia(8)section 9(1)(vii)(b)section 195(2)fees for included servicestrade creditorssection 90(2)percentage completion methodbusiness connectioncommercial expediencysection 9(1)(vii)section 10aa

Judgments citing SC in CIT v. Delhi Safe Deposits Co. Ltd.

DEPUTY COMMISSIONER OF INCOME TAX, CIR-4(1), KOLKATA, KOLKATA vs. SUBLIME AGRO LIMITED, KOLKATA

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

ITA 1358/KOL/2023[2012-13]Status: DisposedITAT Kolkata10 Feb 2025AY 2012-13

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 143(2)Section 14ASection 80I

…gn travelling expenditure towards travelling of its directors / employees to foreign countries to explore business activity. The ld. Counsel has placed reliance on the decision of Hon’ble Supreme Court in the case of CIT vs. Delhi Safe Deposit Co. Ltd. [1982] 133 ITR 756 (SC) and the decision of Hon’ble Gujrat High Court in the case of CIT vs. Shahibag Entrepreneurs Pvt. Ltd. [1995] 215 ITR 810 (Guj). The Hon’ble Apex Court has held thus: “the true test of an expenditure laid out wholly and exclusively for the purposes of trade or business is that it is incurred by the assessee as incidental to his trade for the…

AVTEC LTD.,NEW DELHI vs. DCIT (LTU), CIRCLE-1 , NEW DELHI

In the result, the appeal of the assessee is allowed

ITA 7366/DEL/2019[2016-17]Status: DisposedITAT Delhi29 Nov 2024AY 2016-17

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Salil Kapoor, Sr. AdvFor Respondent: Shri Vipul Kashypa, Sr. DR
Section 10ASection 115JSection 234BSection 80I

…emently contended that expenditure incurred is incidental to his trade for the purpose keeping the trade going is an allowed expenditure. For this contention, he relied on the decision of the Hon'ble Supreme Court in the case of Delhi Safe Deposit Co. Ltd. [133 ITR 756] (SC). The ld. counsel for the assessee relied on the decision in the case of CIT v ChandulalKeshavlal& Co 38 ITR 601 wherein it has been held that “If the expenditure is incurred for the purpose of trade of the assessee and it does not matter thatpayment may enure for the benefit of third party, is allowed.” The ld AR also relied on the case…

AVTEC LTD.,NEW DELHI vs. ACIT (LTU), CIRCLE-1 , NEW DELHI

In the result, the appeal of the assessee is allowed

ITA 1008/DEL/2019[2012-13]Status: DisposedITAT Delhi29 Nov 2024AY 2012-13

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Salil Kapoor, Sr. AdvFor Respondent: Shri Vipul Kashypa, Sr. DR
Section 10ASection 115JSection 234BSection 80I

…emently contended that expenditure incurred is incidental to his trade for the purpose keeping the trade going is an allowed expenditure. For this contention, he relied on the decision of the Hon'ble Supreme Court in the case of Delhi Safe Deposit Co. Ltd. [133 ITR 756] (SC). The ld. counsel for the assessee relied on the decision in the case of CIT v ChandulalKeshavlal& Co 38 ITR 601 wherein it has been held that “If the expenditure is incurred for the purpose of trade of the assessee and it does not matter thatpayment may enure for the benefit of third party, is allowed.” The ld AR also relied on the case…

AVTEC LTD.,NEW DELHI vs. DCIT (LTU), CIRCLE-1 , NEW DELHI

In the result, the appeal of the assessee is allowed

ITA 8081/DEL/2018[2013-14]Status: DisposedITAT Delhi29 Nov 2024AY 2013-14

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Salil Kapoor, Sr. AdvFor Respondent: Shri Vipul Kashypa, Sr. DR
Section 10ASection 115JSection 234BSection 80I

…emently contended that expenditure incurred is incidental to his trade for the purpose keeping the trade going is an allowed expenditure. For this contention, he relied on the decision of the Hon'ble Supreme Court in the case of Delhi Safe Deposit Co. Ltd. [133 ITR 756] (SC). The ld. counsel for the assessee relied on the decision in the case of CIT v ChandulalKeshavlal& Co 38 ITR 601 wherein it has been held that “If the expenditure is incurred for the purpose of trade of the assessee and it does not matter thatpayment may enure for the benefit of third party, is allowed.” The ld AR also relied on the case…

AVTEC LTD.,NEW DELHI vs. ACIT (LTU), CIRCLE-1, NEW DELHI

In the result, the appeal of the assessee is allowed

ITA 4716/DEL/2018[2015-16]Status: DisposedITAT Delhi29 Nov 2024AY 2015-16

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Salil Kapoor, Sr. AdvFor Respondent: Shri Vipul Kashypa, Sr. DR
Section 10ASection 115JSection 234BSection 80I

…emently contended that expenditure incurred is incidental to his trade for the purpose keeping the trade going is an allowed expenditure. For this contention, he relied on the decision of the Hon'ble Supreme Court in the case of Delhi Safe Deposit Co. Ltd. [133 ITR 756] (SC). The ld. counsel for the assessee relied on the decision in the case of CIT v ChandulalKeshavlal& Co 38 ITR 601 wherein it has been held that “If the expenditure is incurred for the purpose of trade of the assessee and it does not matter thatpayment may enure for the benefit of third party, is allowed.” The ld AR also relied on the case…

AVTEC LTD.,NEW DELHI vs. ACIT (LTU), CIRCLE-1, NEW DELHI

In the result, the appeal of the assessee is allowed

ITA 2893/DEL/2018[2014-15]Status: DisposedITAT Delhi29 Nov 2024AY 2014-15

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Salil Kapoor, Sr. AdvFor Respondent: Shri Vipul Kashypa, Sr. DR
Section 10ASection 115JSection 234BSection 80I

…emently contended that expenditure incurred is incidental to his trade for the purpose keeping the trade going is an allowed expenditure. For this contention, he relied on the decision of the Hon'ble Supreme Court in the case of Delhi Safe Deposit Co. Ltd. [133 ITR 756] (SC). The ld. counsel for the assessee relied on the decision in the case of CIT v ChandulalKeshavlal& Co 38 ITR 601 wherein it has been held that “If the expenditure is incurred for the purpose of trade of the assessee and it does not matter thatpayment may enure for the benefit of third party, is allowed.” The ld AR also relied on the case…

AVTEC LTD.,NEW DELHI vs. DCIT (LTU), NEW DELHI

In the result, the appeal of the assessee is allowed

ITA 6332/DEL/2016[2012-13]Status: DisposedITAT Delhi29 Nov 2024AY 2012-13

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Salil Kapoor, Sr. AdvFor Respondent: Shri Vipul Kashypa, Sr. DR
Section 10ASection 115JSection 234BSection 80I

…emently contended that expenditure incurred is incidental to his trade for the purpose keeping the trade going is an allowed expenditure. For this contention, he relied on the decision of the Hon'ble Supreme Court in the case of Delhi Safe Deposit Co. Ltd. [133 ITR 756] (SC). The ld. counsel for the assessee relied on the decision in the case of CIT v ChandulalKeshavlal& Co 38 ITR 601 wherein it has been held that “If the expenditure is incurred for the purpose of trade of the assessee and it does not matter thatpayment may enure for the benefit of third party, is allowed.” The ld AR also relied on the case…

M/S. AVTEC LTD.,NEW DELHI vs. DCIT (LTU), NEW DELHI

In the result, the appeal of the assessee is allowed

ITA 1009/DEL/2015[2011-12]Status: DisposedITAT Delhi29 Nov 2024AY 2011-12

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Salil Kapoor, Sr. AdvFor Respondent: Shri Vipul Kashypa, Sr. DR
Section 10ASection 115JSection 234BSection 80I

…emently contended that expenditure incurred is incidental to his trade for the purpose keeping the trade going is an allowed expenditure. For this contention, he relied on the decision of the Hon'ble Supreme Court in the case of Delhi Safe Deposit Co. Ltd. [133 ITR 756] (SC). The ld. counsel for the assessee relied on the decision in the case of CIT v ChandulalKeshavlal& Co 38 ITR 601 wherein it has been held that “If the expenditure is incurred for the purpose of trade of the assessee and it does not matter thatpayment may enure for the benefit of third party, is allowed.” The ld AR also relied on the case…

KURODA ELECTRIC INDIA PRIVATE LIMITED,HARYANA vs. ACIT, CIRCLE 2(1), GURGAON

In the result, the Appeal filed by the assessee is allowed

ITA 3123/DEL/2023[2016-2017]Status: DisposedITAT Delhi08 Mar 2024AY 2016-2017

Bench: Shamim Yahya & Sh. Yogesh Kumar U.S.Ita No. 3123/Del/2023, A.Y. 2016-17 Kuroda Electric India Vs. Acit, Private Ltd. Circle -2(1), Unit No. 511, Gurgaon Suneity Business Tower, Sector-54, Golf Course, Road Gurgaon, Chakkarpur B.O., Gurgaon Haryana, India 122002 Pan : Aafck9587N Appellant Respondent

…ith the agenda of the meetings and other relevant details corroborating the business purposes of the travelling and car hire charges. 11 Kuiroda Electric India Vs. ACIT 12. The Hon’ble Supreme Court in the case of CIT Vs. Delhi Safe Deposit Co. Ltd. (1982) 133 ITR 756 (SC) held that the true test of an expenditure laid out wholly and exclusively for the purposes of business is that it is incurred by the assessee as incidental to his trade for the purpose of keeping the trade going. The expenditure incurred must be for commercial expediency. In the circumstances, the Ld. A.O. has been totally wrong in consid…

SHRI AMRIT LAL BATRA,SRINAGAR vs. THE DY. COMMISSIONER OF INCOME-TAX-3, SRINAGAR

Appeals of the appellant are disposed off in the terms indicated as above

ITA 482/ASR/2014[2010-11]Status: DisposedITAT Amritsar06 Oct 2023AY 2010-11

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

For Appellant: Sh. Sudhir Sehgal, ARFor Respondent: Sh. Manoj Aggarwal, Sr. DR

…ake investments in many other concerns from where a handsome amount is earned by him. So, the same cannot be disallowed. He placed reliance in this regard on the Judgment of the Apex Court in the case of “CIT vs. Delhi Safe Deposit Co. Ltd.”, as reported in 133 ITR 756 wherein it has been held as under: “In the instant case, the assessee incurred the expenditure in question to avoid any adverse effect on its reputation, to protect the managing agency which was an income earning apparatus and for retaining it with the reconstituted firm in which the interest of the assessee was the same as before. It was likel…

SH. AMRIT LAL BATRA, PROP.,SRINAGAR vs. THE ADDITIONAL COMMISSIONER OF INCOME-TAX,, JAMMU

Appeals of the appellant are disposed off in the terms indicated as above

ITA 211/ASR/2013[2007-08]Status: DisposedITAT Amritsar06 Oct 2023AY 2007-08

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

For Appellant: Sh. Sudhir Sehgal, ARFor Respondent: Sh. Manoj Aggarwal, Sr. DR

…ake investments in many other concerns from where a handsome amount is earned by him. So, the same cannot be disallowed. He placed reliance in this regard on the Judgment of the Apex Court in the case of “CIT vs. Delhi Safe Deposit Co. Ltd.”, as reported in 133 ITR 756 wherein it has been held as under: “In the instant case, the assessee incurred the expenditure in question to avoid any adverse effect on its reputation, to protect the managing agency which was an income earning apparatus and for retaining it with the reconstituted firm in which the interest of the assessee was the same as before. It was likel…

ACIT, CIRCLE KARNAL, KARNAL vs. LIBERTY SHOES LTD., KARNAL

ITA 7126/DEL/2017[2012-13]Status: DisposedITAT Delhi19 Jul 2023AY 2012-13

Bench: Sh. Shamim Yahya & Sh. Anubhav Sharmaita No. 7126/Del/2017, A.Y. 2012-13 Acit, Vs. M/S. Liberty Shoes Ltd., 13Th Circle, Karnal Mile Stone, Liberty Puram G.T.Road, Bastara, Kutail, Distt. Karnal. Pan : Aaacl3146K (Appellant) (Respondent)

Section 143(1)Section 143(2)Section 143(3)Section 37Section 37(1)

…of business, so the same is an allowable expenditure under the provisions of section 37(1) of the Income Tax Act, 1961. The above submission finds due support from the judgement of Hon ’ble Supreme Court in the case of C1T v. Delhisafe Deposit Co. Ltd.[1982] 133 ITR 756 (SC) (Copy enclosed at Page No. 808 to 810.” 2.3 The Ld. AO had however disallowed the same first considering expenditure / loss to be capital in nature. Secondly, considering that assessee is not in the business of giving guarantees to others so there was no business exigency as the expense has not been incurred wholly and exclusively for the bu…

ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), RAIPUR vs. M/S HOTEL ISHIKA, RAIPUR

ITA 235/RPR/2017[2008-09]Status: DisposedITAT Raipur28 Apr 2023AY 2008-09

Bench: Shri Ravish Soodआयकर अपील सं./ Ita No. 235/Rpr/2017 "नधा"रण वष" / Assessment Year : 2008-09 The Assistant Commissioner Of Income Tax, Circle-1(1), Raipur (C.G.) .......अपीलाथ" / Appellant बनाम / V/S. M/S. Hotel Ishika, A-08, Shubham Vihar, New Purena Raipur, Pan : Aadfh8557L

For Appellant: NoneFor Respondent: Shri Piyush Tripathi, Sr. DR
Section 143(3)Section 147Section 36(1)(iii)

…nds, on which interest was paid, for non-business purposes is not as per law (Kolkata ITAT in the case of ITO Vs. Snowtex Investment Ltd ITA No. 356/Ko1/2012 dated 06/11/2015). On the same issue Hon'ble Supreme Court in the case of Delhi Safe Deposits Co. Ltd 133 ITR 756 held that the true test of an expenditure laid out wholly and exclusively for the purposes of trade of business is that it is incurred by the assessee as incidental to his trade for the purpose of keeping the trade going and of making it pay and not in any other capacity than that of a trader. In fine since the amount in question has been spent f…

M/S. RMZ HOTELS PRIVATE LIMITED,BANGALORE vs. NATIONAL E-ASSESSMENT CENTRE, DELHI

In the result, the appeal of the assessee is allowed

ITA 954/BANG/2022[2018-19]Status: DisposedITAT Bangalore22 Feb 2023AY 2018-19

Bench: Shri Chandra Poojariassessment Year: 2018-19

For Appellant: Shri V. Srinivasan, A.RFor Respondent: Shri Ganesh R. Ghale, Standing Counsel for Department
Section 234Section 255Section 255(3)Section 36

…e proposition that no disallowance is warranted u/s 36(1) (iii) of the Act where the amounts are advanced, interest free to the sister concern for commercial expediency. Further reliance was placed on the ratio laid down in CIT Vs. Delhi Safe Deposit Company [133 ITR 756 (SC) ]. Payments being made for saving business reputation and its allowability as business expenditure was the next plea of the learned AR for the assessee. The learned AR relied upon CIT Vs. Gerorgepolous [146 ITR 380 (Mad)] and Surat Electricity Co Ltd Vs. CIT [35 DTR (Ahd)(Trib) 272]. The learned AR also pointed out that the ratio laid down i…

LT FOODS LTD.,NEW DELHI vs. DCIT, NEW DELHI

The appeal of the assessee is partly allowed

ITA 6221/DEL/2012[2008-09]Status: DisposedITAT Delhi11 Apr 2022AY 2008-09

Bench: Shri N.K. Billaiya & Shri Yogesh Kumar U.S

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Surender Pal, CIT- DR
Section 142Section 143(3)Section 14ASection 80ISection 92C

…xpenses were incurred prior to acquisition of the said company. We find that expenditure of Rs. 1,15,36,451, incurred towards acquisition of Kusha Inc has been capitalized by the assessee. 80. Hon'ble Supreme Court in the case of Delhi Safe Deposit Co Ltd 133 ITR 756 has held that commercial expediency and direct and immediate benefit to trade are relevant factors. A sum of money expanded, not of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily and on the ground of commercial expediency and in order to indirectly to facilitate the carrying on of the business, may ye…

SHRI MANSUKHLAL DAYABHAI MANGUKIYA,SURAT vs. INCOME TAX OFFICER, WARD -3(3)(3), SURAT

In the result, appeal filed by the assessee is allowed

ITA 257/SRT/2018[2013-14]Status: DisposedITAT Surat12 Jan 2022AY 2013-14
For Appellant: Shri P. M. Jagasheth, CAFor Respondent: Ms Anupama Singla, Sr. DR
Section 143(3)Section 44ASection 57

…e and hence assessee has rightly claimed the set off from business income of partnership firms. The said interest expenses are for the purpose of business, hence question of disallowance does not arise. In the case of CIT v. Delhi Safe Deposit Co. Ltd. [1982] 133 ITR 756 (SC), the Hon`ble Supreme Court held that a sum of money expended, not of necessity and with a view to direct and immediate benefit to the trade, but voluntarily on the ground of commercial expediency, and in order indirectly to facilitate the carry on of the business, may yet be expended wholly and exclusively for the purposes of trade. Therefor…

DCIT, NEW DELHI vs. M/S AJAY ENTERPRISES PVT. LTD., NEW DELHI

Appeal is dismissed and appeal of the assessee in ITA No

ITA 2083/DEL/2015[2012-13]Status: DisposedITAT Delhi30 Jul 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Dr. B.R.R. Kumar

For Appellant: S/Shri Pradeep Dinodia & R.KFor Respondent: Date of hearing
Section 143(3)Section 41(1)

…ills Limited 103 ITR 66 (SC) b. Sasoon J. David & NCo. Pvt. Ltd. Vs. CIT 118 ITR 261 (SC). c. CIT Vs. Walchand & Co. 65 ITR 381 (SC). d. J. K. Woolen Mills Vs. CIT 72 ITR 612 (SC). e. Aluminium Corporation Vs. CIT 86 ITR 11 (SC). f. CIT Vs. Delhi Safe Deposit 133 ITR 756 (SC). g. SA Builders Ltd. Vs. CIT 288 ITR 1 (SC). 35 ITA. .899, 1348, 1349-D-2013, 5776-D-2014, 2083-D-2015, 1704-D-2015 46. The only reason given by the Ld. AO that sales in A. Y. 2009-10 to the sister concern are covered u/s 40A (2)(b) of the Income Tax Act. We fail to appreciate this reasoning and concern of the AO. As rightly pointed out by…

AJAY ENTERPRISES PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

Appeal is dismissed and appeal of the assessee in ITA No

ITA 1704/DEL/2015[2012-13]Status: DisposedITAT Delhi30 Jul 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Dr. B.R.R. Kumar

For Appellant: S/Shri Pradeep Dinodia & R.KFor Respondent: Date of hearing
Section 143(3)Section 41(1)

…ills Limited 103 ITR 66 (SC) b. Sasoon J. David & NCo. Pvt. Ltd. Vs. CIT 118 ITR 261 (SC). c. CIT Vs. Walchand & Co. 65 ITR 381 (SC). d. J. K. Woolen Mills Vs. CIT 72 ITR 612 (SC). e. Aluminium Corporation Vs. CIT 86 ITR 11 (SC). f. CIT Vs. Delhi Safe Deposit 133 ITR 756 (SC). g. SA Builders Ltd. Vs. CIT 288 ITR 1 (SC). 35 ITA. .899, 1348, 1349-D-2013, 5776-D-2014, 2083-D-2015, 1704-D-2015 46. The only reason given by the Ld. AO that sales in A. Y. 2009-10 to the sister concern are covered u/s 40A (2)(b) of the Income Tax Act. We fail to appreciate this reasoning and concern of the AO. As rightly pointed out by…

DCIT, NEW DELHI vs. M/S. AJAY ENTERPRISES PVT. LTD., NEW DELHI

Appeal is dismissed and appeal of the assessee in ITA No

ITA 5776/DEL/2014[2011-12]Status: DisposedITAT Delhi30 Jul 2021AY 2011-12

Bench: Shri Amit Shukla & Shri Dr. B.R.R. Kumar

For Appellant: S/Shri Pradeep Dinodia & R.KFor Respondent: Date of hearing
Section 143(3)Section 41(1)

…ills Limited 103 ITR 66 (SC) b. Sasoon J. David & NCo. Pvt. Ltd. Vs. CIT 118 ITR 261 (SC). c. CIT Vs. Walchand & Co. 65 ITR 381 (SC). d. J. K. Woolen Mills Vs. CIT 72 ITR 612 (SC). e. Aluminium Corporation Vs. CIT 86 ITR 11 (SC). f. CIT Vs. Delhi Safe Deposit 133 ITR 756 (SC). g. SA Builders Ltd. Vs. CIT 288 ITR 1 (SC). 35 ITA. .899, 1348, 1349-D-2013, 5776-D-2014, 2083-D-2015, 1704-D-2015 46. The only reason given by the Ld. AO that sales in A. Y. 2009-10 to the sister concern are covered u/s 40A (2)(b) of the Income Tax Act. We fail to appreciate this reasoning and concern of the AO. As rightly pointed out by…

DCIT, NEW DELHI vs. M/S AJAY ENTERPRISES PVT. LTD.,, NEW DELHI

Appeal is dismissed and appeal of the assessee in ITA No

ITA 1349/DEL/2013[2009-10]Status: DisposedITAT Delhi30 Jul 2021AY 2009-10

Bench: Shri Amit Shukla & Shri Dr. B.R.R. Kumar

For Appellant: S/Shri Pradeep Dinodia & R.KFor Respondent: Date of hearing
Section 143(3)Section 41(1)

…ills Limited 103 ITR 66 (SC) b. Sasoon J. David & NCo. Pvt. Ltd. Vs. CIT 118 ITR 261 (SC). c. CIT Vs. Walchand & Co. 65 ITR 381 (SC). d. J. K. Woolen Mills Vs. CIT 72 ITR 612 (SC). e. Aluminium Corporation Vs. CIT 86 ITR 11 (SC). f. CIT Vs. Delhi Safe Deposit 133 ITR 756 (SC). g. SA Builders Ltd. Vs. CIT 288 ITR 1 (SC). 35 ITA. .899, 1348, 1349-D-2013, 5776-D-2014, 2083-D-2015, 1704-D-2015 46. The only reason given by the Ld. AO that sales in A. Y. 2009-10 to the sister concern are covered u/s 40A (2)(b) of the Income Tax Act. We fail to appreciate this reasoning and concern of the AO. As rightly pointed out by…

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