Similarly, in CIT v. Modi Industries Ltd. (No.3)

M/S. Dcm Shriram Industries Ltd., New Delhi vs. ACIT, New Delhi

In the result, the appeal of the assessee is allowed

Bench: Smt Diva Singh & Sh.L.P.Sahu

…rred in different assessment years and on abandonment of the project, the expenditure was claimed as revenue in nature. The claim of the assessee was disallowed. However, the Delhi High Court following its earlier judgement in the case of Modi Industries Ltd. 200 ITR 341 has held the expenditure as revenue in nature. It has been held that since the expenditure was incurred on salaries, wages, repair, maintenance, travelling / other other administrative expenditure, which are undoubtedly revenue in nature and as such, no asset of enduring nature can be said to come into existence on incurring this expense. We may…

M/S Michelin India Tyres Pvt. Ltd., New Delhi vs. DCIT, New Delhi

Bench: Shri Inturi Rama Rao & Shri Kuldip Singh

…Court cited as Indo Rama Synthetics (I) Ltd. Vs CIT 185 Taxman 277 (Del.) contended that in the identical circumstances, Hon'ble Jurisdictional High Court has discussed the case of Triveni Engineering Works Ltd. (supra) and CIT vs Modi Industries Ltd. (1993) 200 ITR 341 and came to the following conclusion: “In the case at hand the amount spent on the project reports was not for the purpose of facilitating the assessee's existing trading operations or enabling management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched. If only…

DCIT, New Delhi vs. M/S Escorts Construction Equipment Ltd., New Delhi

In the result, the appeal of the revenue is partly allowed for statistical purposes

Bench: Shri N.K. Saini & Shri A.T. Varkey

…n which this Tribunal vide order dated 28.2.2007 has held as under:- 5. We have heard the rival contentions of both the parties and perused the records. It may be mentioned that the jurisdictional Delhi High Court in the case of CIT vs. Modi Industries Ltd., 200 ITR 341 has held that the expenditure incurred by the assessee in the year in which the unit had not started working is allowable as a business expenditure since the management of the new unit and the earlier business were the same and there was unit of control and a common fund. It has further been held that the manufacturing of another product is only…

Commissioner of Income Tax vs. Bharat Hotels Limited

The appeal is disposed of

…e proviso thereto with effect from 1st April 2004, allowed as deduction the amount of interest paid on loans borrowed for the purposes of business operation. Mr. Vohra referred to the decisions in Commissioner of Income-Tax v. Modi Industries Ltd. (1993) 200 ITR 341 (Del), Commissioner of Income-Tax v. Monnet Industries Ltd. (2011) 332 ITR 627 (Del) and Deputy Commissioner of Income-Tax v. Core Health Care Ltd. (2008) 298 ITR 194 (SC). He submitted that in terms of Section 36 (1) (iii), during the AY in question, the Assessee was entitled to treat the expenditure incurred in payment of interest on loan…

Commissioner of Income Tax vs. Bharat Hotels Limited

The appeal is disposed of

…e proviso thereto with effect from 1st April 2004, allowed as deduction the amount of interest paid on loans borrowed for the purposes of business operation. Mr. Vohra referred to the decisions in Commissioner of Income-Tax v. Modi Industries Ltd. (1993) 200 ITR 341 (Del), Commissioner of Income-Tax v. Monnet Industries Ltd. (2011) 332 ITR 627 (Del) and Deputy Commissioner of Income-Tax v. Core Health Care Ltd. (2008) 298 ITR 194 (SC). He submitted that in terms of Section 36 (1) (iii), during the AY in question, the Assessee was entitled to treat the expenditure incurred in payment of interest on loan…

CIT vs. Bharti Infotel Ltd

…The assessee, however, disputed this, contending that the expense was incurred on account of an expansion of ongoing business and cited several judgments. The very same issue stands covered by the decision of this Court in CIT v. Modi Industries Ltd., 200 ITR 341 (Delhi). This has received further endorsement in judgments reported as CIT v. Monnet Industries, 221 CTR 266 (Del) and CIT v. Relaxo Footwears, 293 ITR 231 (Del). Question No.4 8. The assessee had claimed Rs.50,10,742/- as software expenditure. Even though the AO had initially disallowed the claim, the ITAT directed remitting of the…

CIT vs. Bharti Infotel Ltd

…The assessee, however, disputed this, contending that the expense was incurred on account of an expansion of ongoing business and cited several judgments. The very same issue stands covered by the decision of this Court in CIT v. Modi Industries Ltd., 200 ITR 341 (Delhi). This has received further endorsement in judgments reported as CIT v. Monnet Industries, 221 CTR 266 (Del) and CIT v. Relaxo Footwears, 293 ITR 231 (Del). Question No.4 8. The assessee had claimed Rs.50,10,742/- as software expenditure. Even though the AO had initially disallowed the claim, the ITAT directed remitting of the…

CIT vs. Bharti Telenet Ltd

…The assessee, however, disputed this, contending that the expense was incurred on account of an expansion of ongoing business and cited several judgments. The very same issue stands covered by the decision of this Court in CIT v. Modi Industries Ltd., 200 ITR 341 (Delhi). This has received further endorsement in judgments reported as CIT v. Monnet Industries, 221 CTR 266 (Del) and CIT v. Relaxo Footwears, 293 ITR 231 (Del). Question No.4 8. The assessee had claimed Rs.50,10,742/- as software expenditure. Even though the AO had initially disallowed the claim, the ITAT directed remitting of the…

CIT vs. Hindustan Times Ltd

Appeal is partly allowed, to the extent it covers the first two questions;

…632; Hooghly Trust Pvt. Ltd. v. CIT (1969) 73 ITR 685; Produce Exchange Corporation Ltd. v. CIT (1970) 77 ITR 739; B.R. Ltd. v. V.P. Gupta (1978) 113 ITR 647 as well as the judgment of this Court in Monnet (supra) and CIT v. Modi Industries Limited (1993) 200 ITR 341 have held that if there is common management, common business organization and administration, common fund and common place of business, the conclusion to be drawn is that for the two commercial activities, there is interconnection, interlacing and interdependence which would result in justifiable inference that both constitute same bus…

Commissioner of Income Tax vs. Trveni Engineering & Industries Ltd

The appeals are dismissed

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

…be of a capital or a revenue nature. The tribunal followed the decision of this court in the case of CIT v. Relaxo Footwears Limited: 293 ITR 231. In that decision, this court, following its earlier decision in the case of CIT v. Modi Industries Limited: 200 ITR 341(Del), held that as the new unit was part of the existing business and there was no dispute that there was unity of control and interlacing of the units, the expenses incurred by the assessee for the setting up of a new unit, would be of a revenue nature. We find that, in the present case, the tribunal has correctly applied the decision of t…

Commissioner of Income Tax vs. Triveni Engineering & Industries Ltd

The appeals are dismissed

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

…be of a capital or a revenue nature. The tribunal followed the decision of this court in the case of CIT v. Relaxo Footwears Limited: 293 ITR 231. In that decision, this court, following its earlier decision in the case of CIT v. Modi Industries Limited: 200 ITR 341(Del), held that as the new unit was part of the existing business and there was no dispute that there was unity of control and interlacing of the units, the expenses incurred by the assessee for the setting up of a new unit, would be of a revenue nature. We find that, in the present case, the tribunal has correctly applied the decision of t…

Commissioner of Income Tax Delhi VI vs. Triveni Engineering & Industries Ltd

The appeals are dismissed

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

…be of a capital or a revenue nature. The tribunal followed the decision of this court in the case of CIT v. Relaxo Footwears Limited: 293 ITR 231. In that decision, this court, following its earlier decision in the case of CIT v. Modi Industries Limited: 200 ITR 341(Del), held that as the new unit was part of the existing business and there was no dispute that there was unity of control and interlacing of the units, the expenses incurred by the assessee for the setting up of a new unit, would be of a revenue nature. We find that, in the present case, the tribunal has correctly applied the decision of t…

Commissioner of Income Tax vs. Triveni Engineering & Industries Ltd

The appeals are dismissed

…be of a capital or a revenue nature. The tribunal followed the decision of this court in the case of CIT v. Relaxo Footwears Limited: 293 ITR 231. In that decision, this court, following its earlier decision in the case of CIT v. Modi Industries Limited: 200 ITR 341(Del), held that as the new unit was part of the existing business and there was no dispute that there was unity of control and interlacing of the units, the expenses incurred by the assessee for the setting up of a new unit, would be of a revenue nature. We find that, in the present case, the tribunal has correctly applied the decision of t…

Commissioner of Income Tax Delhi VI vs. Triveni Engineering & Industries Ltd

The appeals are dismissed

…be of a capital or a revenue nature. The tribunal followed the decision of this court in the case of CIT v. Relaxo Footwears Limited: 293 ITR 231. In that decision, this court, following its earlier decision in the case of CIT v. Modi Industries Limited: 200 ITR 341(Del), held that as the new unit was part of the existing business and there was no dispute that there was unity of control and interlacing of the units, the expenses incurred by the assessee for the setting up of a new unit, would be of a revenue nature. We find that, in the present case, the tribunal has correctly applied the decision of t…

Commissioner of Income Tax Delhi II vs. Monnet Industries Ltd

In the result, the appeal is dismissed

Bench: HON'BLE MR. JUSTICE BADAR DURREZ AHMED,HON'BLE MR. JUSTICE RAJIV SHAKDHER

…d law, came to the conclusion that the expenditure in issue was in the nature of revenue expenditure since the sugar plant project was in the same business fold. The CIT(A) held as follows:- “…….In the light of these submissions and Delhi HC decision in 200 ITR 341 it is to be held that the sugar project was in the same business fold that of the business of manufacture as that of ferro chrome or the trading in it. Similarly it is to be held as per the submissions and case laws that it was a case of interlacing not in general terms but in specific terms…….” 4. The Revenue, aggrieved by the order pas…

Commissioner of Income Tax Delhi II vs. Monnet Industries Ltd

In the result, the appeal is dismissed

…d law, came to the conclusion that the expenditure in issue was in the nature of revenue expenditure since the sugar plant project was in the same business fold. The CIT(A) held as follows:- “…….In the light of these submissions and Delhi HC decision in 200 ITR 341 it is to be held that the sugar project was in the same business fold that of the business of manufacture as that of ferro chrome or the trading in it. Similarly it is to be held as per the submissions and case laws that it was a case of interlacing not in general terms but in specific terms…….” 4. The Revenue, aggrieved by the order pas…