What is Shahzada Nand & Sons. v. CIT authority for?

Tax authorities cannot substitute their judgment for that of a businessman regarding business decisions unless the transaction is proven to be a sham or lacks bona fides. The department cannot sit in the armchair of businessmen and decide how they should have entered into a contract.

How many judgments cite Shahzada Nand & Sons. v. CIT?

52 judgments on BharatTax cite Shahzada Nand & Sons. v. CIT (108 ITR 358), spanning 2010 to 2024.

Shahzada Nand & Sons. v. CIT (108 ITR 358)

El El Hotels & Investments Ltd., New Delhi vs. DCIT, New Delhi

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

ITA 918/DEL/2010[2006-07]Status: DisposedITAT Delhi16 Feb 2021AY 2006-07

For Appellant: Shri Ajay Wadhwa, Advocate &For Respondent: Ms Nidhi Srivastava, CIT-DR

Section 115JSection 132Section 143(3)Section 153A

…agreement or the allotment letter did not mandate payment of compensation would not come in the wav of the assessee treating such payment as 'revenue expenditure.' [Para 29] Applying the law explained by the Supreme Court in Shahzada Nand & Sons v. CIT [1977] 108 ITR 358 (SC) and CIT v. Nainital Bank Ltd. [1966] 62 ITR 638 (SC) to the case in hand, the plausible conclusion is that the compensation paid by the assessee to the allottees of the commercial spaces for the surrender of their rights therein cannot be said to be disallowable on the ground of such payment having been made for 'extraneous considerations'.…

M/S. Delhi Surgical & Dressing Pvt. Ltd., Delhi vs. DCIT, New Delhi

In the result, ITA No.5058/Del/2016 is allowed and ITA No

ITA 5059/DEL/2016[2013-14]Status: DisposedITAT Delhi27 Aug 2020AY 2013-14

Bench: Shri R.K. Panda & Shri Kuldip Singh

For Appellant: Shri Ved Jain, AdvocateFor Respondent: Shri Jagdish Singh, Sr. DR

Section 147Section 271Section 271(1)(c)Section 274Section 50C

…out any particular instance that the expenses have not been incurred. So far as the order of the CIT(A) doubting the commercial expediency of the payment is concerned, he submitted that the Hon’ble Supreme Court in the case of Shahzada Nand and Sons vs. CIT, 108 ITR 358 has observed that commercial expediency does not mean that an employer could not make any payment to an employee unless the employee is entitled to it under a contract. He submitted that the assessee is maintaining regular books of account which are audited and the full details of the expenses were produced before the AO and, no doubt, has been r…

Trent Ltd, Mumbai vs. Addl. C.I.T.-2(3), Mumbai

ITA 5775/MUM/2011[2007-08]Status: DisposedITAT Mumbai15 Jul 2020AY 2007-08

Bench: Shri C.N. Prasad, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Trent Ltd., V. Add. Cit – 2(3) Bombay House, 2Nd Floor, 24 Aayakar Bhavan, M.K. Road Homi Mody Street, Fort Mumbai Mumbai – 400 001 Pan: Aaacl1838J (Appellant) (Respondent) Addl. Cit – 2(3) V. M/S. Trent Ltd., Room No. 556, 5Th Floor Bombay House, 2Nd Floor, 24 Aayakar Bhavan, M.K. Road Homi Mody Street, Fort Mumbai - 400 020 Mumbai – 400 001 Pan: Aaacl1838J (Appellant) (Respondent) M/S. Trent Ltd., V. Dy. Cit – 2(3) Bombay House, 2Nd Floor, 24 Aayakar Bhavan, M.K. Road Homi Mody Street, Fort Mumbai Mumbai – 400 001 Pan: Aaacl1838J (Appellant) (Respondent)

Section 14ASection 35DSection 37(1)

…mployee shareholders had resulted in payment of less taxes in comparison to tax payable on the same if distributed as dividend was found incorrect. Reliance was also placed upon the decision of the Supreme Court in the case of CIT v/s. Shahzada Nand and Sons (108 ITR 358) wherein almost identical circumstances an issue of commission paid to the employee shareholders was held to be allowable under Section 36(1)(ii) of the Act. In the above view, the appeal of the respondent was allowed by the impugned order dated 20th February, 2015. (c) The grievance of the Revenue before us is that the bonus which was paid to th…

Whirlpool of India Ltd., Gurgaon vs. ACIT, Ltu Circle-2, New Delhi

In the result, appeal of the assessee is allowed in part for statistical purpose

ITA 9191/DEL/2019[2015-16]Status: DisposedITAT Delhi20 Jan 2020AY 2015-16

Bench: Shri R.K. Panda & Shri K.Narasimha Charyassessment Year: 2015-16

For Appellant: Sh. Neeraj Jain, AdvocateFor Respondent: Sh. Sunil Kumar, CIT/DR

Section 115Section 143(3)Section 144CSection 35Section 92BSection 92C

…welfare activities and the expenditure incurred in marriage of the employees’ daughters is not wholly and exclusively for the purpose of business of the assessee. 22. Basing on the decision of the Hon’ble Apex Court in the case of ShahzadaNand& Sons vs. CIT 108 ITR 358, Ld. AR submitted that the ex gratia compensation paid to an employee is an allowable expenditure. He further submitted that under section 37(1) of the Act, deduction is admissible for expenditure incurred wholly and exclusively for the purpose of business and such expenditure is justified by business consideration and incurred out of commercial…

Shri Sahil Surendra Saharia, Kolkata vs. ITO, Ward - 1(3), Dibrugarh

Appeal is dismissed

ITA 56/GTY/2018[2010-11]Status: DisposedITAT Guwahati18 Dec 2019AY 2010-11

Bench: Shri S.S.Godara & Dr. A.L.Sainiassessment Year :2010-11

Section 143(3)Section 37(1)

…assessee and that there is nothing in record to indicate that the sum of Rs.70,00,000/- was routed back to assessee. Reliance was placed for following Judgments: (i) DClT Vs. AG. GovindarajuJu [2012] 108 ITR 888 (Madj (ii) Shahzada Nand & Sans Vs. CIT (1977) 108 ITR 358 (Se) (iii) CIT Vs. Coimbatore Salem Transport Pvt. Ltd. (1966) 61 ITR 480 (Mad) (iv) Aluminium Corpn. Ltd. Vs. CIT (1972) 86 TTR 11 (SC) (v) Swastic Textiles Co .(P) Ltd. Vs. CIT (1984) 150 ITR 155 (Guj) (vi) Jamshedpur Motor Accessories Stores Vs. CIT (1974) 95 JTR 664 (Pat) (vii) . CIT Vs. ASK. Rathinasamy Nadar (1995) 212 ITR 527 (Mad) (viii)…

ACIT, New Delhi vs. M/S. Iigm Pvt. Ltd., New Delhi

In the result, appeal of Revenue dismissed

ITA 4278/DEL/2016[2012-13]Status: DisposedITAT Delhi14 Oct 2019AY 2012-13

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

For Appellant: Shri M.S. Sekhon, C.AFor Respondent: Ms. Rakhi Vimal, Sr. D.R

Section 143(3)Section 40A(2)(b)

…ssessments under section 143(3) have been passed and similar claim of assessee have been accepted in A.Ys. 2003-204, 2004-05, 2006-07 and 2009-10. The A.O. has distinguished this case from the case of Shahzada Nand & Sons vs. Commissioner of Income Tax [1977] 108 ITR 358 (SC) and has argued that since the assessee has huge reserve and surplus, it should have used the reserves to declare the dividend. By not doing so, it has diverted the money in the hands of the Directors to avoid payment of dividend distribution tax. On the other hand, the assessee has given the bifurcation of sales, commission and service charg…

ACIT 32(3), Mumbai vs. Rushi Builders & Developers, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 580/MUM/2017[2010-11]Status: DisposedITAT Mumbai24 Apr 2019AY 2010-11

Bench: Shri Rajesh Kumar & Shri Ram Lal Negiassessment Year: 2010-11

For Appellant: Dr. K. Shivaram, A.RFor Respondent: Shri D.G. Pansari, D.R

Section 133(6)

…deration. We have also examined the cancellation of agreement as filed by the assessee in the paper book page No.42 to 70. The Ld. Counsel of the assessee also relied on the decision of the Hon’ble Supreme Court in the case of Shahzad Nand & Sons Vs CIT (1977)108 ITR 358 (SC) wherein Hon’ble Supreme Court has held that payment made out of commercial expediency is allowable expense. Hence, we find no reason to deviate from the finding of the Ld. CIT(A) who has passed a very reasoned and speaking order on the issue and accordingly we hold that the compensation paid to the flat buyers upon cancellation of the agreem…

Commissioner of Income Tax VIII vs. Gopal Dass Estates & Housing Pvt.Ltd

Appeals of the Revenue are dismissed

ITA - 742 / 2009HC Delhi20 Mar 2019

Section 260

…. 29. The mere fact that the space buyer‟s agreement or the allotment letter did not mandate payment of compensation would not come in the way of the Assessee treating such payment as „revenue expenditure.‟ In Shahzada Nand & Sons v. CIT, Patiala (1977) 108 ITR 358 (SC) it was held that the requirement of „commercial expediency‟ “must be judged not in the light of the 19th century laissez faire doctrine which regarded man as an economic being concerned only to protect and advance his self-interest but in the context of current socio-economic thinking which places the general interest of the community…

Commissioner of Income Tax vs. Gopal Dass Estates & Housing Pvt.Ltd

Appeals of the Revenue are dismissed

ITA - 548 / 2010HC Delhi20 Mar 2019

Section 260

…. 29. The mere fact that the space buyer‟s agreement or the allotment letter did not mandate payment of compensation would not come in the way of the Assessee treating such payment as „revenue expenditure.‟ In Shahzada Nand & Sons v. CIT, Patiala (1977) 108 ITR 358 (SC) it was held that the requirement of „commercial expediency‟ “must be judged not in the light of the 19th century laissez faire doctrine which regarded man as an economic being concerned only to protect and advance his self-interest but in the context of current socio-economic thinking which places the general interest of the community…

The Commissioner of Income Tax vs. Gopal Dass Estates & Housing Pvt.Ltd

Appeals of the Revenue are dismissed

ITA - 400 / 2009HC Delhi20 Mar 2019

Section 260

…. 29. The mere fact that the space buyer‟s agreement or the allotment letter did not mandate payment of compensation would not come in the way of the Assessee treating such payment as „revenue expenditure.‟ In Shahzada Nand & Sons v. CIT, Patiala (1977) 108 ITR 358 (SC) it was held that the requirement of „commercial expediency‟ “must be judged not in the light of the 19th century laissez faire doctrine which regarded man as an economic being concerned only to protect and advance his self-interest but in the context of current socio-economic thinking which places the general interest of the community…

Commissioner of Income Tax vs. Gopal Dass Estates & Housing Pvt.Ltd

Appeals of the Revenue are dismissed

ITA - 581 / 2010HC Delhi20 Mar 2019

Section 260

…. 29. The mere fact that the space buyer‟s agreement or the allotment letter did not mandate payment of compensation would not come in the way of the Assessee treating such payment as „revenue expenditure.‟ In Shahzada Nand & Sons v. CIT, Patiala (1977) 108 ITR 358 (SC) it was held that the requirement of „commercial expediency‟ “must be judged not in the light of the 19th century laissez faire doctrine which regarded man as an economic being concerned only to protect and advance his self-interest but in the context of current socio-economic thinking which places the general interest of the community…

M/S Techno Blast (P) Ltd., New Delhi vs. DCIT, Noida

In the result the appeal by the assessee is allowed in part

ITA 1203/DEL/2011[2005-06]Status: DisposedITAT Delhi15 Oct 2018AY 2005-06

Bench: Shri R. K. Panda & Ms Suchitra Kamble

Section 142(1)Section 142(2)

…ct as has been held by a Division Bench of this Court in the case of CIT vs. Ishwar Prakash and Bros.(1986) 159 ITR 843 (P&H). Likewise, reliance could be placed on a judgement of the Hon’ble Supreme Court in the case of Shahzada Nand and Sons vs. CIT'(.1977) 108 ITR 358, wherein it was held that the commission paid to the two employees of the assessee film was reasonable having regard to all the circumstances of the case and was allowable as a deductible expenditure u/s 36(l)(ii) of the Act. The Hon’ble Supreme Court was dealing with a matter in respect of the 7 AYs 1960-61 to 1963-64.” 15.1. The Hon’ble Delhi…

Drishti Marine Solutions P. Ltd, Mumbai vs. ITO 5(1)(3), Mumbai

In the result, this appeal by the assessee stands allowed

ITA 2803/MUM/2014[2009-10]Status: DisposedITAT Mumbai20 Mar 2018AY 2009-10

Bench: Shri Shamim Yahya, Am & Shri Amarjit Singh, Jm आयकर अपील सं./I.T.A. No.2803/Mum/2014 ("नधा"रण वष" / Assessment Year: 2009-10) Drishti Marine Solutions Pvt. Ltd. The Income Tax Officer 5 (1)-3, बनाम/ Top Floor, Mehta Mahal, Aayakar Bhavan, Mumbai-400 020 15, Mathew Road, Vs. Opera House, Mumbai-400 004 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaacl 6405 F (अपीलाथ" /Appellant) (""यथ" / Respondent) : अपीलाथ" क" ओर से / Appellant By : Dr. K. Shivam ""यथ" क" ओर से/Respondent By : Shri Ram Tiwari सुनवाई क" तार"ख / : 16.01.2018 Date Of Hearing घोषणा क" तार"ख / : 20.03.2018 Date Of Pronouncement आदेश / O R D E R Per Shamim Yahya, A. M.: This Appeal By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) Dated 11.03.2014 & Pertains To Assessment Year 2009-10. 2. The Grounds Of Appeal Read As Under: 1. The Ld. Commissioner Of Income Tax (Appeals) Erred In Disallowing The Claim Of Deduction Of Interest Paid Of Rs.30,834/- On Pt, Vat & Service Tax.

For Appellant: Dr. K. ShivamFor Respondent: Shri Ram Tiwari

…ate the circumstances in which expenses is to be incurred. Commercial expediency must be decided from businessman's point of view. CIT vs. Sales Magnesite P. Ltd. (1995) 214 ITR i (Bom.)(HC)(PG.6)(Pg. No.363-369)(rel pg.s67) Shahzada Nand & Sons v. CIT (1977) 108 ITR 358 (SC) (366)(Pg. No. 370 - 379) For deciding the commercial expediency, contractual obligation is not required. CIT vs. Associated Electrical Agencies (2004) 266 ITR 63 (Mad)(HC)(38o- 387)(rel Pg.386) 12. Goa Lifeguarding Contract: Work performed by Drishti Special Response Services Pvt Ltd Bid won by Dristiti Drishti Marine Solutions Pvt Ltd Adve…

Kshitij Interriors P.Ltd, Mumbai vs. DCIT OSD- 8(2), Mumbai

In the result, appeal of the assessee is allowed

ITA 5151/MUM/2014[2011-12]Status: DisposedITAT Mumbai12 Jan 2018AY 2011-12

Bench: Shri R.C.Sharma, Am & Shri Ravish Sood, Jm M/S. Kshitij Interiors Pvt. Ltd., Vs. Dcit Osd- 8(2) 210, New Apollo Estate Premises Aayakar Bhavan Co-Op Society Ltd., Old Nagardas M.K.Road, Road-23 Mumbai- 400 020 Mogra Village, Andheri (E) Mumbai – 400 069 Pan/Gir No.Aabck8174D Appellant) Respondent) ..

Section 143(3)Section 36Section 36(1)(ii)

…ents Pvt. Ltd., High Court of Delhi (2012) 83 CCH 101 (Del HC), AMD Metplast Pvt. Ltd. vs. DCIT High Court of Delhi (2012) 341 1TR 563 (Delhi), C1T vs. Career Launcher India Ltd. High Court of Delhi (2012) 71 DTR (Del) 161, Shahzada Hand & Sons vs. CIT (1977) 108 ITR 358 (SC) and Loyal Motor Service Co. Ltd. vs. CIT (1946) 14 ITR 647 (BOM) . 9. Applying the proposition of law laid down in the above judicial pronouncements to the facts of the instant case alongwith fact that Mr.Bhawarlal Sharma being a technical person looking after entire work of the company had been paid reasonable commission of Rs.3,29,900/- lo…

Sh. Sushil Kumar, Karnal vs. ITO, New Delhi

In the result, appeal of the assessee is dismissed

ITA 6763/DEL/2013[2009-10]Status: DisposedITAT Delhi09 Jun 2017AY 2009-10

Bench: Sh. H.S. Sidhu & Sh. O.P. Kantassessment Year: 2009-10 Vs. Income Tax Officer, Ward -21(3), Sh. Sushil Kumar, H. No. 145, Sector – 14, Karnal New Delhi Pan : Aaspk5603R (Appellant) (Respondent) Appellant By Ms. Pallavi Goel, Ca Respondent By Sh. Umesh Chand Dubey, Sr.Dr Date Of Hearing 22.05.2017 Date Of Pronouncement 09.06.2017 Order Per O.P. Kant, A.M.: This Appeal By The Assessee Is Directed Against Order Dated 26/09/2013 Of The Ld. Commissioner Of Income-Tax (Appeals)-Xxii, New Delhi [In Short “The Cit-(A)”] For Assessment Year 2009-10, Raising Following Grounds:

Section 143(2)Section 143(3)

…, after providing for the salary or remuneration of the employer and the employees and other prior changes such an interest on capital, depreciation, reserves, etc. a part of it should in all fairness go to the employees." [Shahzada Nand & Sons vs. CIT (1977) 108 ITR 358 (SC)] In view of the above cited decisions it is most humbly submitted that the Ld. CIT(A) erred in confirming the order of Ld. AO disallowing the deduction u/s 37 of the Act.” 8. The Ld. counsel further submitted that the Ld. CIT-A has erred in ignoring the assessment order passed by the Income Tax Officer, New Delhi. 9. The Ld. counsel furthe…