Senairam Doongarmall v. CIT

42 ITR 392Supreme Court of India1961#2952 most cited

What is Senairam Doongarmall v. CIT authority for?

The Income-tax Act does not exhaustively define 'business'. However, it denotes an activity undertaken with the primary objective of earning profit, signifying that profit is derived through a process of production.

40

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 1992 to 2022.

Also referred to as

Senairam Doongarmall v. CIT · 42 ITR 392 · SC · business income · definition of business · activity for profit · process of production · intention to earn profit

Read the full judgment

Issues it is cited on

section 10transfersection 143personcompanyindiatotal incomebusinessinterest

Judgments citing Senairam Doongarmall v. CIT

Phi Seeds Ltd vs. ACIT Coy Circle 14 (1)

The appeals are dismissed

ITA 4383/DEL/2006[2003-2004]Status: DisposedITAT Delhi18 Dec 2017AY 2003-2004

Bench: Shri S.K. Yadav & Shri B.P. Jain, [Assessment Year: 2002-03] [Assessment Year: 2003-04] [Assessment Year: 2005-06] [Assessment Year: 2007-08] [Assessment Year: 2008-09] [Assessment Year: 2009-10] [Assessment Year: 2010-11] M/S P.H.I. Seeds Pvt. Ltd. Vs. The Dy.C.I.T B – 4, Greater Kailash Enclave Circle 14(1) Part – Ii, New Delhi. New Delhi Pan : Aabcs 5374 D [Assessment Year: 2009-10] The Dy.C.I.T Vs. P.H.I. Seeds Pvt. Ltd Circle 14(1) B – 4, Greater Kailash Enclave New Delhi Part – Ii, New Delhi. Pan : Aabcs 5374 D [Appellant] [Respondent] Date Of Hearing : 23.10.2017 Date Of Pronouncement : 18.12.2017

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Smt. Paramita Tripathy, CIT-DR
Section 10Section 10(1)Section 143(2)

…pendent and unrelated parties and it is not permissible for the revenue cannot be allowed to take business decision on assessee’s behalf. The revenue has clearly confused “measure of payment” with the quality and character of payment. (Ref. Senniram Dongarmal 42 ITR 392, SC at Pg. 1/dPB-1) vii In any event, the mode and basis of payment of compensation for labour is a matter between the company and the farmer. If the farmer is satisfied with such an arrangement, which he enters into year after year, it is not for the revenue to contend that the assessee should have adopted some other business model, and state th…

Phi Seeds Ltd vs. DCIT, Circle-14(1)

The appeals are dismissed

ITA 1988/DEL/2006[2002-2003]Status: DisposedITAT Delhi18 Dec 2017AY 2002-2003

Bench: Shri S.K. Yadav & Shri B.P. Jain, [Assessment Year: 2002-03] [Assessment Year: 2003-04] [Assessment Year: 2005-06] [Assessment Year: 2007-08] [Assessment Year: 2008-09] [Assessment Year: 2009-10] [Assessment Year: 2010-11] M/S P.H.I. Seeds Pvt. Ltd. Vs. The Dy.C.I.T B – 4, Greater Kailash Enclave Circle 14(1) Part – Ii, New Delhi. New Delhi Pan : Aabcs 5374 D [Assessment Year: 2009-10] The Dy.C.I.T Vs. P.H.I. Seeds Pvt. Ltd Circle 14(1) B – 4, Greater Kailash Enclave New Delhi Part – Ii, New Delhi. Pan : Aabcs 5374 D [Appellant] [Respondent] Date Of Hearing : 23.10.2017 Date Of Pronouncement : 18.12.2017

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Smt. Paramita Tripathy, CIT-DR
Section 10Section 10(1)Section 143(2)

…pendent and unrelated parties and it is not permissible for the revenue cannot be allowed to take business decision on assessee’s behalf. The revenue has clearly confused “measure of payment” with the quality and character of payment. (Ref. Senniram Dongarmal 42 ITR 392, SC at Pg. 1/dPB-1) vii In any event, the mode and basis of payment of compensation for labour is a matter between the company and the farmer. If the farmer is satisfied with such an arrangement, which he enters into year after year, it is not for the revenue to contend that the assessee should have adopted some other business model, and state th…

The Commissioner of Income Tax vs. M/S Vardhman Industries Ltd

Appeals are partly allowed, in view of the

ITA/708/2004HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…tion in a day to day manner. On the other hand as discussed earlier, the subsidy has been granted specially for the purpose of promotion and development of the industries in the backward areas of the state. In the case of Senai Ram Dungermal reported in 42 ITR 392 at 397, the Hon‟ble Supreme Court held that it is the quality of the payment that is decessive of the character (if the payment and not the method of the payment or its measure that makes it fall within capital or revenue. Hon‟ble Supreme Court in the case of PJ Chemicals Ltd. (supra) held that where the government subsidy is intended as an…

Commissioner of Income Tax Delhi vs. M/S Bhushan Steels & Strips Ltd

Appeals are partly allowed, in view of the

ITA/317/2003HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…tion in a day to day manner. On the other hand as discussed earlier, the subsidy has been granted specially for the purpose of promotion and development of the industries in the backward areas of the state. In the case of Senai Ram Dungermal reported in 42 ITR 392 at 397, the Hon‟ble Supreme Court held that it is the quality of the payment that is decessive of the character (if the payment and not the method of the payment or its measure that makes it fall within capital or revenue. Hon‟ble Supreme Court in the case of PJ Chemicals Ltd. (supra) held that where the government subsidy is intended as an…

The Commissioner of the Income vs. M/S Vardhman Industries Ltd

Appeals are partly allowed, in view of the

ITA/725/2004HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…tion in a day to day manner. On the other hand as discussed earlier, the subsidy has been granted specially for the purpose of promotion and development of the industries in the backward areas of the state. In the case of Senai Ram Dungermal reported in 42 ITR 392 at 397, the Hon‟ble Supreme Court held that it is the quality of the payment that is decessive of the character (if the payment and not the method of the payment or its measure that makes it fall within capital or revenue. Hon‟ble Supreme Court in the case of PJ Chemicals Ltd. (supra) held that where the government subsidy is intended as an…

Commissioner of Income Tax Delhi vs. M/S Bhushan Steels & Strips Ltd

Appeals are partly allowed, in view of the

ITA/434/2005HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…tion in a day to day manner. On the other hand as discussed earlier, the subsidy has been granted specially for the purpose of promotion and development of the industries in the backward areas of the state. In the case of Senai Ram Dungermal reported in 42 ITR 392 at 397, the Hon‟ble Supreme Court held that it is the quality of the payment that is decessive of the character (if the payment and not the method of the payment or its measure that makes it fall within capital or revenue. Hon‟ble Supreme Court in the case of PJ Chemicals Ltd. (supra) held that where the government subsidy is intended as an…

Commissioner of Income Tax Delhi vs. M/S Bhushan Steels & Strips Ltd

Appeals are partly allowed, in view of the

ITA/316/2003HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…tion in a day to day manner. On the other hand as discussed earlier, the subsidy has been granted specially for the purpose of promotion and development of the industries in the backward areas of the state. In the case of Senai Ram Dungermal reported in 42 ITR 392 at 397, the Hon‟ble Supreme Court held that it is the quality of the payment that is decessive of the character (if the payment and not the method of the payment or its measure that makes it fall within capital or revenue. Hon‟ble Supreme Court in the case of PJ Chemicals Ltd. (supra) held that where the government subsidy is intended as an…

Commissioner of Income Tax Delhi vs. M/S Bhushan Steels & Strips Ltd

Appeals are partly allowed, in view of the

ITA/315/2003HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…tion in a day to day manner. On the other hand as discussed earlier, the subsidy has been granted specially for the purpose of promotion and development of the industries in the backward areas of the state. In the case of Senai Ram Dungermal reported in 42 ITR 392 at 397, the Hon‟ble Supreme Court held that it is the quality of the payment that is decessive of the character (if the payment and not the method of the payment or its measure that makes it fall within capital or revenue. Hon‟ble Supreme Court in the case of PJ Chemicals Ltd. (supra) held that where the government subsidy is intended as an…

DCIT, Circle - 1, Kolkata vs. M/S. Gloster Jute Mills Limited, Kolkata

In the result, appeal by the Revenue is dismissed

ITA 95/KOL/2011[2007-08]Status: DisposedITAT Kolkata01 Mar 2017AY 2007-08

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Shri Waseem Ahmed, Am] I.T.A No.95/Kol/2011 Assessment Year : 2007-08

For Appellant: Shri Ajay Vohra, Sr.AdvocateFor Respondent: Shri Sital Chandra Das, JCIT

…ount of subsidy was equivalent to 90 per cent. of the sales tax paid by the beneficiary does not imply that the same was in the form of refund of sales tax paid. As pointed out by the Supreme Court in the case of Senairam Doongarmall v. CIT reported in [1961] 42 ITR 392 (SC) " AIR 1961 SC 1579, it is the quality of the payment that is decisive of the character of the payment and not the method of the payment or its measure, and makes it fall within capital or revenue. Thus, in the case before us, the amount paid as subsidy was really capital in nature. " 14. Identical subsidy under the West Bengal Incentive Schem…

Citi Group Global Markets Mauritius P.Ltd, Mumbai vs. Asst DIT (It) 1(2), Mumbai

ITA 2593/MUM/2014[2007-08]Status: DisposedITAT Mumbai20 Sept 2016AY 2007-08
For Appellant: Shri Arvind SondeFor Respondent: Shri T.R. Paite-Sr.AR
Section 115ASection 143(3)Section 2Section 254(1)

…आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, मुंबई अिधकरण मुंबई मुंबई “एल मुंबई एल एल” खंडपीठ एल खंडपीठ खंडपीठ खंडपीठ Income-tax Appellate Tribunal -“L”Bench Mumbai सव"ी राजे"",लेखा सद"य एवं अिमत शु"ल "याियक सद"य Before S/Sh.Rajendra,Accountant Member and Amit Shukla,Judicial Member आयकर अपील सं./I.T.A./2593/Mum/2014,िनधा"रण िनधा"रण िनधा"रण वष" िनधा"रण वष" वष" /Assessment Year: 2007-08 वष" CitiGroup Global Markets Mauritius ADIT –(Intl. Taxation), Range-1(2) Private Limited 1st Floor, Scindia House, 14th Floor, The Ruby, N.M. Marg, Ballard Estate, Vs. 29, Senapati Bapat Marg , Dadar (…

Price Waterhouse Coppers Private Limited, Kolkata vs. Addl C.I.T RG - 2, Kolkata

In the result, to sum up, the appeals of the revenue in ITA No

ITA 2033/KOL/2013[2003-04]Status: DisposedITAT Kolkata13 Jul 2016AY 2003-04

Bench: Shri M. Balaganesh, Am & Shri S. S. Viswanethra Ravi, Jm]

For Appellant: Shri K. M. Gupta, ARFor Respondent: Shri A. K. Pandey, JCIT, Sr. DR
Section 143(3)

…ount of subsidy was equivalent to 90 per cent. of the sales tax paid by the beneficiary does not imply that the same was in the form of refund of sales tax paid. As pointed out by the Supreme Court in the case of Senairam Doongarmall v. CIT reported in [1961] 42 ITR 392 (SC) ; AIR 1961 SC 1579, it is the quality of the payment that is decisive of the character of the payment and not the method of the payment or its measure, and makes it fall within capital or revenue. Thus, in the case before us, the amount paid as subsidy was really capital in nature.” 2.5.5. We also find that the Hon’ble Apex Court in the case…

D.C.I.T, Cir-2, Kolkata vs. M/S Price Water House Coopers Pvt., Kolkata

In the result, to sum up, the appeals of the revenue in ITA No

ITA 1523/KOL/2013[2005-2006]Status: DisposedITAT Kolkata13 Jul 2016AY 2005-2006

Bench: Shri M. Balaganesh, Am & Shri S. S. Viswanethra Ravi, Jm]

For Appellant: Shri K. M. Gupta, ARFor Respondent: Shri A. K. Pandey, JCIT, Sr. DR
Section 143(3)

…ount of subsidy was equivalent to 90 per cent. of the sales tax paid by the beneficiary does not imply that the same was in the form of refund of sales tax paid. As pointed out by the Supreme Court in the case of Senairam Doongarmall v. CIT reported in [1961] 42 ITR 392 (SC) ; AIR 1961 SC 1579, it is the quality of the payment that is decisive of the character of the payment and not the method of the payment or its measure, and makes it fall within capital or revenue. Thus, in the case before us, the amount paid as subsidy was really capital in nature.” 2.5.5. We also find that the Hon’ble Apex Court in the case…

D.C.I.T, Cir-2, Kolkata vs. M/S Pricewaterhouse Coopers Pvt, Kolkata

In the result, to sum up, the appeals of the revenue in ITA No

ITA 1521/KOL/2013[2003-2004]Status: DisposedITAT Kolkata13 Jul 2016AY 2003-2004

Bench: Shri M. Balaganesh, Am & Shri S. S. Viswanethra Ravi, Jm]

For Appellant: Shri K. M. Gupta, ARFor Respondent: Shri A. K. Pandey, JCIT, Sr. DR
Section 143(3)

…ount of subsidy was equivalent to 90 per cent. of the sales tax paid by the beneficiary does not imply that the same was in the form of refund of sales tax paid. As pointed out by the Supreme Court in the case of Senairam Doongarmall v. CIT reported in [1961] 42 ITR 392 (SC) ; AIR 1961 SC 1579, it is the quality of the payment that is decisive of the character of the payment and not the method of the payment or its measure, and makes it fall within capital or revenue. Thus, in the case before us, the amount paid as subsidy was really capital in nature.” 2.5.5. We also find that the Hon’ble Apex Court in the case…

D.C.I.T, Cir-3 Kolkata, Kolkata vs. M/S Barjora Steel & Re-Rolling Mills Pvt. Ltd., Kolkata

In the result, appeal is treated as partly allowed for statistical purpose

ITA 1517/KOL/2013[2006-07]Status: DisposedITAT Kolkata06 Apr 2016AY 2006-07

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Shri Waseem Ahmed, Am] I.T.A No. 1517/Kol/2013 Assessment Year : 2006-07

For Appellant: David Z.Chowngthu, JCITFor Respondent: Shri Ashoke Mukherjee, FCA

…tal cost which is the basis of determining the subsidy being only a measure adopted under the scheme to qualifying the financial aid is not payment directly or indirectly to' meet any of the actual cost, of such fixed capital assets! ' (b) Senairam, Durgamall 42 ITR 392 (SC) wherein at page 397 it was held: "It is the quality of the payment that is decisive of the character of the payment and not the method of the payment of its nature and ………… it fall within the capital or revenue." 5 M/s. Barjora Steel & Rerolling Mills Pvt. Ltd. A.Yr.2006-07 (c) ITAT Kolkata Bench in the case of Rasoi Ltd Vs Dy Commissioner…

Commissioner of Income Tax Delhi-XI vs. Indian National Congress/All India Congress Committee

ITA/145/2001HC Delhi23 Mar 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 139Section 13A

…a process of production, or, in other words, by the continuous exercise of an activity. These observations of the Privy Council were quoted with approval by this Court in many cases and recently in Senairam Doongarmall v. Commissioner of Income-tax [1961] 42 ITR 392 (SC). In the last case, it was also pointed out that the addition of the words "profits and gains" in the phrase "income, profits and gains" used in the Income-tax Act does not restrict the meaning of the word "income" by implication, and that the whole expression is "income" writ large. 7. But whatever "income" may include or mean it is h…

Indian National Cong. (I) Aicc vs. C.I.T.- XI

ITA/180/2001HC Delhi23 Mar 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 139Section 13A

…a process of production, or, in other words, by the continuous exercise of an activity. These observations of the Privy Council were quoted with approval by this Court in many cases and recently in Senairam Doongarmall v. Commissioner of Income-tax [1961] 42 ITR 392 (SC). In the last case, it was also pointed out that the addition of the words "profits and gains" in the phrase "income, profits and gains" used in the Income-tax Act does not restrict the meaning of the word "income" by implication, and that the whole expression is "income" writ large. 7. But whatever "income" may include or mean it is h…

Indian National Cong. (I) Aicc vs. C.I.T.- XI

ITA - 180 / 2001HC Delhi23 Mar 2016
Section 139Section 13A

…a process of production, or, in other words, by the continuous exercise of an activity. These observations of the Privy Council were quoted with approval by this Court in many cases and recently in Senairam Doongarmall v. Commissioner of Income-tax [1961] 42 ITR 392 (SC). In the last case, it was also pointed out that the addition of the words "profits and gains" in the phrase "income, profits and gains" used in the Income-tax Act does not restrict the meaning of the word "income" by implication, and that the whole expression is "income" writ large. 7. But whatever "income" may include or mean it is h…

Commissioner of Income Tax vs. Sri P.Sarveswara Rao

ITTA/434/2005HC Telangana14 Mar 2016

Bench: RAMESH RANGANATHAN,M.SATYANARAYANA MURTHY

Morgan Stanley Mauritius Company Ltd, Mumbai vs. DDIT (It) 4(1), Mumbai

ITA 1625/MUM/2014[2007-08]Status: DisposedITAT Mumbai27 Jan 2016AY 2007-08
For Appellant: Shri Arvind Sonde-ARFor Respondent: Jasbir Chauhan-CIT-DR
Section 143(3)Section 144C(1)Section 148Section 2Section 254(1)

…अिधकरण, ‘एल’ खंडपीठ आयकर अपीलीय अपीलीय अिधकरण खंडपीठ मुंबई मुंबई आयकर आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण खंडपीठ खंडपीठ मुंबई मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI “L” BENCH सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"", लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं राम लाल नेगी एवं राम लाल नेगी राम लाल नेगी, , , , "याियक सद"य राम लाल नेगी "याियक सद"य "याियक सद"य "याियक सद"य Before S/Sh. Rajendra,Accountant Member & Ram Lal Negi,Judicial Member आयकर आयकर अपील अपील संसंसंसं/.ITA No.1625/Mum/2014,िनधा"रण िनधा"रण वष" वष"/Assessment Year-2007-08 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" Morgan St…

Shrimand Padmaraja R. Kadambanda, Dhulia vs. The Commnr. of Income Tax, Pune

C.A. No.-002201-002203 - 1979Supreme Court22 Apr 1992
For Respondent: COMMISSIONER OF INCOME TAX, PUNE
Section 15Section 15(1)Section 15(1)(d)Section 2(24)Section 4

…, Commissioner of Income-Tax v. Vazir Sultan & Sons, (1959) 36 ITR 175, Godrej & Co v. Commissioner of Income-Tax v. Jairam Valji, (1959)35 ITR 148 and Senairam Doongarmall v Commis- sioner of Income tax (1961) 42 ITR 392." This was the reason why we said neither the nomenclature nor the periodicity of the payment would be the determinative factors. Regard must be had only to the nature and quality of payment. The High Court took the view that this is not compensation. One thing that is certain is that the assessee lost her right to these allow…