State of Madras v. G.J. Coelho

53 ITR 186Supreme Court of India1964#6111 most cited

What is State of Madras v. G.J. Coelho authority for?

Interest on borrowed funds used to acquire a capital asset is deductible as revenue expenditure if the acquisition is an integral part of the business. Expenditure closely related to business can be viewed as an integral part of its conduct and thus deductible as revenue expenditure.

19

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2015 to 2025.

Also referred to as

State of Madras v. G.J. Coelho · 53 ITR 186 · section 10(2)(xv) · section 36(1)(iii) · interest on borrowed capital · capital asset · revenue expenditure · commercial expediency · enduring benefit · integral part of business

Sections most often in play

Section 36(1)(iii)

Issues it is cited on

section 10(2)(xv)section 10(2)enduring benefitcommercial expediencycapital expendituresection 37(1)revenue expendituresection 37section 19section 40section 14asection 10

Judgments citing State of Madras v. G.J. Coelho

DCIT(CC)-7(3), Mumbai, Aayakar Bhavan, Near Churchgate vs. Macrotech Developers Limited, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 487/MUM/2024[2017-18]Status: DisposedITAT Mumbai03 Mar 2025AY 2017-18

Bench: Shri Amarjit Singh & Shri Anikesh Banerjeeassessment Year 2017-18 Dcit (Cc)-7(3, Mumbai Macrotech Developers Limited Aayakar Bhavan, 412, Floor-4, 17G Vardhaman Mumbai-400020. Vs. Chamber, Cawasji Patel Road, Horniman Circle, Fort Mumbai-400001, Maharashtra Pan: Aaacl 1490 J (Appellant) (Respondent) Present For: Assessee By : Shri Niraj Sheth Revenue By : Shri Hemanshu Joshi, Sr. Dr Date Of Hearing : 06.12.2024 Date Of Pronouncement : 03.03.2025

For Appellant: Shri Niraj ShethFor Respondent: Shri Hemanshu Joshi, Sr. DR
Section 115BSection 143(2)Section 36(1)(iii)

…n utilised for purchase of a capital asset. The position of law in this regard was explained by the Supreme Court in 6 Macrotech Developers Limited A.Y. 2017-18 the cases of India Cements Ltd. v. CIT [1966] 60 ITR 52 and State of Madras v. G.J. Coelho [1964] 53 ITR 186 ." (p. 620) 9. Considering these judgments and the test that the object of the loan is irrelevant, the interest which was disallowed to the extent of investment will have to be allowed as held by the Tribunal”. 12.6 The issue of interest claimed u/s 36(1)(iii) of the Act was also under dispute in the A.Y 2009-10. In the A.Y.2009-10, the appellan…

Standard Chartered Bank, Mumbai vs. DDIT(It) 2 (1), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 1683/MUM/2019[2002-03]Status: DisposedITAT Mumbai15 Mar 2024AY 2002-03

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Rahul Chaudhary, Hon'Bleorder Per S. Rifaur Rahman (Am) 1. These Cross Appeals Are Filled By The Assessee & Revenue Against Different Orders Of Learned Commissioner Of Income Tax (Appeals)-57, Mumbai (Hereinafter In Short "Ld.Cit(A)"] Dated 28.12.2018 For The A.Ys.2002-03 & 2003-04. 2. Since The Issues Raised In All The Appeals Are Identical, Therefore, For The Sake Of Convenience, These Appeals Are Clubbed, Heard & Disposed Off By This Consolidated Order. Revenue Appeals

Section 195Section 28Section 9(1)(v)

…n the normal course, to be regarded as expenditure for the purpose of the business which was carried on in the accounting periods. In the course of the judgment this Court referred to the earlier decision of this Court in State of Madras v. G.J. Coelho [1964] 53 ITR 186 wherein it was held that the interest on the amount borrowed for acquiring a capital asset is deductible as revenue expenditure. It is true, that in the said decision this Court re-affirmed the well established principle that any expenditure laid out for acquiring an asset of a permanent character would be capital expenditure, held at the same tim…

Standard Chartered Bank, Mumbai vs. DDIT (It) 2(1), Mumbai

In the result, the appeal filed by the assessee is partly allowed and appeal filed by the Revenue is dismissed

ITA 4867/MUM/2017[2001-02]Status: DisposedITAT Mumbai13 Nov 2023AY 2001-02

Bench: Shri Vikas Awasthy & Shri Gagan Goyalstandard Chartered Bank Taxation Department, 23-25, M. G. Road, 3Rd Floor, Fort, Mumbai-400 001 Pan: Aabcs4681D ..... Appellant Vs. Ddit (Intl. Tax)-2(1) Scindia House, Ballard Estate, N. M. Marg, Mumbai-400 038 ..... Respondent

For Appellant: Shri Madhur Agarwal, Ld. ARFor Respondent: Shri Anil Sant, Ld. DR
Section 14ASection 250Section 40

…n the normal course, to be regarded as expenditure for the purpose of the business which was carried on in the accounting periods. In the course of the judgment this Court referred to the earlier decision of this Court in State of Madras v. G.J. Coelho [1964] 53 ITR 186 wherein it was held that the interest on the amount Page 16 of 90 borrowed for acquiring a capital asset is deductible as revenue expenditure. It is true, that in the said decision this Court re-affirmed the well established principle that any expenditure laid out for acquiring an asset of a permanent character would be capital expenditure, held…

DCIT, Circle-21(1), New Delhi vs. Religare Arts Initiative Ltd., New Delhi

In the result, appeal of the Revenue is dismissed

ITA 7554/DEL/2018[2013-14]Status: DisposedITAT Delhi09 Aug 2023AY 2013-14

Bench: Shri Shamim Yahya & Ms. Astha Chandraasstt. Year: 2013-14

For Appellant: Shri Rohit Jain, AdvocateFor Respondent: Shri Rohit Garg, CIT- DR
Section 143(3)Section 37Section 40A(2)(b)

…t of a third party, whether the origin of the agency is voluntary or statutory..................” 7.6 Reference was also drawn to: - Allahabad High Court in the case of Seth Banarsi Das Gupta v. CIT [1977] 106 ITR 559; - State of Madras v. G.J. Coelho [1964] 53 ITR 186 (SC); Bombay Steam Navigation Co. P. Ltd. v. Commissioner of Income-tax [1965] 56 ITR 52 (SC); - Supreme Court in CIT Vs. Birla Cotton Spinning & Weaving Mills Ltd. (82 ITR 166); and - S. A. Builders Ltd. Vs. CIT (288 ITR 1) 7.7. Thus, applying the ratio laid down in the above mentioned judicial decisions, the disallowance of Rs.60,16,402/- on ad…

Addl. CIT, Special Range- 1, New Delhi vs. Amway India Enterprises Pvt. Ltd., New Delhi

In the result, the appeal of the revenue is dismissed

ITA 6707/DEL/2018[2012-13]Status: DisposedITAT Delhi08 May 2023AY 2012-13

Bench: Shri C.M. Garg & Dr. B. R. R. Kumaraddl. Cit, Vs. Amway India Enterprises Pvt. Ltd, 1St Floor, Plot No. 8, Elegance Special Range-1, New Delhi Tower, Jasola, New Delhi -110025 (Appellant) (Respondent) Pan: Aaaca5603Q Assessee By : Sh. Sudesh Garg, Adv Sh. Prince Bansal, Ca Ms. Bhavya Garg, Ca Revenue By: Sh. P. Praveen Sidharth, Cit Dr Date Of Hearing 16/02/2023 Date Of Pronouncement 08/05/2023

For Appellant: Sh. Sudesh Garg, AdvFor Respondent: Sh. P. Praveen Sidharth, CIT DR
Section 32Section 37(1)

…see was effectively that the assessee assumed liability of services tax which was not payable to him but was payable to the ABOs/ distributors. The ld DR submitted as per judgment of the Hon'ble Supreme Court in the case State of Madras Vs. G.J. Coelho (1964) 53 ITR 186, wherein, it was held that the expenditure made under a transaction which is so closely related to the business that it could be viewed as on integral part of the conduct of business, may be recorded as revenue expenditure laid out wholly and exclusively for the purpose of business. The ld DR submitted that the AO was right in disallowing the paym…

DCIT, Non-Corporate Circle - 2 (1), Chennai vs. M/S. Shriram Investments, Chennai

In the result, appeal filed by the Revenue is dismissed

ITA 2232/CHNY/2019[2015-16]Status: DisposedITAT Chennai12 Jan 2022AY 2015-16

Bench: Shri Mahavir Singh, Vice- & Shri G.Manjunathaआयकर अपील सं./I.T.A.No.2232/Chny/2019 ("नधा"रणवष" / Assessment Year: 2015-16)

Section 143(3)Section 14ASection 36Section 36(1)(iii)Section 40A

…respect of capital borrowed which has been utilised for purchase of a capital asset. The position of law in this regard was explained by the Supreme Court in the cases of India Cements Ltd. v. CIT (1966) 60 ITR 52 (SC) and State of Madras v. G.J.Coelho (1964) 53 ITR 186 (SC)'' (emphasis supplied). " 8. We have considered the reasoning given in the decisions referred to supra and are in respectful agreement with the view expressed in the said decisions, for the reason already given by us that there is nothing in Section 36 (1) (iii) of the Act that would dis-entitle the assessee to claim deduction in respect of i…

Echjay Industries P.Ltd, Mumbai vs. Asst CIT Cen Cir 45, Mumbai

Appeals are allowed

ITA 5245/MUM/2017[2006-07]Status: DisposedITAT Mumbai17 Jul 2019AY 2006-07

Bench: : Shri M. Balaganesh, Am & Shri Amarjit Singh, Jm Assessment Year :2006-07) Assessment Year :2010-11) Assessment Year :2011-12) Assessment Year :2012-13) Assessment Year :2013-14) Assessment Year :2014-15) Assessment Year :2010-11) & Assessment Year :2012-13) M/S. Echjay Industries Pvt. Ltd. M/S. Echjay Industries Pvt. Vs. Asst. Commissioner Of Ltd., Income Tax, Central Circle- 83, Bajaj Bhavan 45,/Dy.Commissioner Of Nariman Point Income Tax-Circle 8(2) Mumbai – 400 023 Mumbai, Aayakar Bhavan Mumbai – 400 020 Pan/Gir No. : Aaace1157B (Appellant) .. (Respondent)

For Appellant: Shri N.R. RaoFor Respondent: Shri Sachchidanand Dube
Section 143(3)Section 147

…allow the expenses incurred for rendering such company, however, necessary and enjoyable it may be from the point of view of personal needs of those executives." Relying on the decision of the Supreme Court in the case of State of Madras v. G.J. Coelho [1964] 53 ITR 186, it held that these are all personal expenses and would not entitle the assessee-company to claim the same as business expenses. 47. But the Tribunal has relied on the decision of the Special Bench of the Tribunal in the case of Glaxo Laboratories (India) Ltd., case (supra) which distinguished the two decisions referred to above. It is the case of…

DCIT, New Delhi vs. M/S. Metso Minerals (India) Pvt. Ltd., New Delhi

In the result, the appeal is dismissed

ITA 6681/DEL/2014[2010-11]Status: DisposedITAT Delhi18 Jan 2019AY 2010-11

Bench: : Shri Amit Shukla & Shri L.P. Sahu

Section 143(2)Section 14ASection 36(1)(iii)

…c. Further personal expenses would include expenses on the person of the assessee or to satisfy his personal needs such as cloths, food etc or purposes not related to the business for which the deduction is claimed. Kindly see - State of Madras vs GJ Coelho (53 ITR 186)(SC) CIT vs Porrits & Spencer (Asia) Ltd. (2010) 324 ITR 257 (P&H) ITO vs Ashoka Betelnut Co. (P) Ltd. (1984) 10 ITD 788 (Mad) d) An analysis of section 37(1) shows that any expenditure • not being expenditure of the nature described in section 30 to 36 and • not being in the nature of capital expenditure or personal expenses of the assessee •…

M/S Loesche India Pvt. Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, the appeal is allowed

ITA 295/DEL/2016[2010-11]Status: DisposedITAT Delhi13 Aug 2018AY 2010-11

Bench: : Shri Amit Shukla & Shri L.P. Sahuassessment Year: 2010-11

Section 17(2)(iv)Section 37Section 37(1)

…as incidental to the business carried on by the assessee and allowable as business expenditure. It was held that the expenditure incurred by the assessee was incidental to the business carried on by it and was allowable (h) State of Madras v G J Coelho [1964] 53 ITR 186 [SC] 9 The SC in the case of State of Madras v. G.J. Coelho [1964] 53 ITR 186 (SC) held that every expense to discharge a personal obligation does not become a personal expense. Further the SC in the case of Commissioner of Income-tax v. Dhanrajgiriji Raja Narasingiriji [1973] 91 ITR 544 had stated that" it is not open to the department to prescr…

Vaaya Renewable Energy (Purna) Private Limited, Mumbai vs. Deputy Commissioner of Income Tax, Central Circle 3(1)`, Mumbai

The appeal of the assessee is allowed

ITA 535/MUM/2018[2012-13]Status: DisposedITAT Mumbai03 May 2018AY 2012-13

Bench: Shri Joginder Singh & Shri G. Manjunathaassessment Years: 2012-13 Vaaya Renewable Energy Dcit, (Purna) Private Limited, Central Circle-3(1), बनाम/ A-9, Enercon Tower, Veera 19Th Floor, Air India Bldg. Vs. Desai Raod, Veera Nariman Point, Industrial Estate, Mumbai-400021 Andheri (West), Mumbai-400053 ("नधा"रती /Assessee) (राज"व /Revenue) P.A. No.Aadcv7290F "नधा"रती क" ओर से / Assessee By Shri Hemakataria राज"व क" ओर से / Revenue By Ms. N. Hemlatha-Dr

…of the expenditure and gives jurisdiction to the tax authorities to examine the matter. The test laid down by their lordship of the Hon'ble Apex Court in State ITA Nos.535/Mum/2018 17 Vaaya Renewable Energy (PURNA) Pvt. Ltd. of Madras vs G.J. Coelho (1964) 53 ITR 186 is that the expenditure made under a transaction, which is so closely related to business that it could be viewed as an integral part of conduct of business, may be regarded as revenue expenditure laid out wholly and exclusively for the purposes of business. Identical ratio was laid down in Bombay Steam Navigation Company vs CIT (1965) 56 ITR…

The ITO, Ward-6(2), Ahmedabad vs. Smt. Mrudulaben Harshadbhai Patel, Ahmedabad

In the result, the appeal of the revenue is dismissed

ITA 3532/AHD/2015[2007-08]Status: DisposedITAT Ahmedabad09 Oct 2017AY 2007-08
For Appellant: Shri Sunil Talati, A.RFor Respondent: Shri V.K. Singh, Sr. D.R
Section 143(2)Section 143(3)Section 36(1)(iii)

…n respect of capital borrowed which has been utilised for purchase of a capital asset. The position of law in this regard was explained by the Supreme Court in the cases of India Cements Ltd. Vs. CIT (1966) 60 ITR 52 and State of Madras Vs. G.J. Coelhi (1964) 53 ITR 186." (-11-) 9. Considering these judgments and the test that the object of the loan is irrelevant, the interest which was disallowed to the extent of investment will have to be allowed as held by the Tribunal. 10. In so far as question (d) is concerned, as noted the A.O. and C.I.T. (A) proceeded on a wrong assumption of facts, namely that the amounts…

ITO, New Delhi vs. Vishal Khosla, Delhi

In the result, the Appeal filed by the Revenue stands dismissed

ITA 881/DEL/2013[2009-10]Status: DisposedITAT Delhi26 May 2017AY 2009-10

Bench: Shri H.S. Sidhu & Shri O.P. Kant

For Appellant: NoneFor Respondent: Sh. Umesh Chand Dubey, Sr.DR
Section 143(1)Section 143(2)Section 143(3)Section 41(1)

…having three cars. 15. In response to this disallowance the appellant has submitted that disallowance made by the A.O. was adhoc and unreasonable. The appellant relied on the decision of the Hon'ble Supreme Court in the case of State of Madras vs. G J Coelhi 53 ITR 186 (SC), wherein it was held that personal expenses are those that relate to the person of the assessee to satisfy his personal needs such cloths foods etc. However, it has been admitted by the appellant in his submissions that possibility of some personal use of the cars cannot be ruled out and some reasonable disallowance in the absence of log b…

Gateway Terminals India P.Ltd, Navi Mumbai vs. DCIT 5(1), Mumbai

In the result, appeal filed by the assessee in ITA No

ITA 3595/MUM/2016[2009-10]Status: DisposedITAT Mumbai06 Apr 2017AY 2009-10

Bench: Shri C.N. Prasad & Shri Ramit Kocharआयकर अपील सं./I.T.A. No. 3595/Mum/2016 ("नधा"रण वष" / Assessment Year : 2009-10) Gateway Terminals India Pvt. Dy. Commissioner Of बनाम/ Ltd., Income Tax, 5(1), V. Gti House, Jawaharlal Nehru Aaykar Bhavan, Port, M.K. Road, Sheva, District Uran, Mumbai. Navi Mumbai – 400 707. "थायी लेखा सं./Pan : Aaccg1899E .. (अपीलाथ" /Appellant) (""यथ" / Respondent)

For Appellant: Shri Kiran NisarFor Respondent: Shri B.S. Bist, DR
Section 115JSection 143(3)

…viding facilities to the labourers in the village working in ITA 3595/Mum/2016 18 the mines, in order to ensure regular supplies of iron ore which was to be exported by the assessee. The learned counsel also relied upon State of Madras v. G.J. Coelho [1964] 53 ITR 186 ; [1964] 8 SCR 60 (SC), where payment of interest on the amount borrowed by the purchaser of the plantation was held to be closely related to the plantation and the expenditure was held to be laid out or expended wholly or exclusively for the purpose of the plantation. Mr. Sharma further submitted that if the said payment had not been made, the as…

DCIT Cir 7(1) vs. M/S Novartis India Ltd

ITA 5258/MUM/2003[1997 - 98]Status: DisposedITAT Mumbai25 Jan 2017
For Appellant: S/Shri J.D. Mistry & Nitesh JoshiFor Respondent: S/Shri P.R. Ghosh & K.V. Vispute- DR

…in the normal course, to be regarded as expenditure for the purpose of the business which was carried on in the accounting periods In the course of the judgment this Court referred to the earlier decision of this Court in State of Madras Vs G J Coelho (1954) 53 ITR 186 (SC) wherein it was held that the interest on the amount borrowed for acquiring a capital asset is deductible as revenue expenditure It is true, that in the said decision this Court reaffirmed the well established principle that any expenditure laid out for acquiring an asset of a permanent character would be capital expenditure, held at the same…

Ritu Chaudhry D/O Surendra Pal Chaudhry, Mumbai vs. ITO 11(1)(3), Mumbai

In the result, the appeal assessee is partly allowed

ITA 1261/MUM/2013[2009-10]Status: DisposedITAT Mumbai23 Sept 2016AY 2009-10

Bench: Shri Saktijit Dey() & Shri N.K. Pradhan ()

For Appellant: Shri. A. K. GhoshFor Respondent: Shri. Satya Pal Kumar
Section 143(3)

…the relevant material on record. We find that a similar issue arose before the ITAT ‘D’ Bench Mumbai in the case of the assessee for the A.Y. 2005-06 (ITA No.2911/Mum/2009). The Tribunal referred to the decision in the case of State of Madras vs. G. J. Coelho 53 ITR 186 (SC) and held the following: “The Hon’ble Supreme Court has clearly observed that “personal expenses” included expenses on the person of the assessee or to satisfy his personal needs as such clothes, food, etc. Thus the expenses on medical is on personal nature and the expenses on clothes would clearly fall under the category of personal expenses…

Sh. Raj Kumar Jain, New Delhi vs. DCIT, New Delhi

In the result the appeal is allowed

ITA 2821/DEL/2014[2008-09]Status: DisposedITAT Delhi23 Sept 2016AY 2008-09

Bench: Shri J. Sudhakar Reddy & Shri Kuldip Singhay: 2008-09 Sh. Raj Kumar Jain Vs. Dy.Cit, Circle 24(1) A 2/31, Safdarjung Enclave New Delhi New Delhi 110 029 Pan: Aagpj 5125 R (Appellant) (Respondent) Appellant By : Sh. Gautam Jain, C.A. Respondent By : Sh. Anil Kr. Sharma, Sr.D.R.

For Appellant: Sh. Gautam Jain, C.AFor Respondent: Sh. Anil Kr. Sharma, Sr.D.R
Section 143(3)Section 24Section 36Section 36(1)(iii)Section 57

…the purposes of the business or profession. Tribunal was therefore justified in holding that interest payment could not be disallowed as per provisions of s.361(1)(iii) – India Cements Ltd. vs. CIT (1966) 60 ITR 52 (S.C.); State of Madras vs. GJ Coelbo (1964) 53 ITR 186 (SC), Nabadwip Chandra Roy vs. CIT (1962) 44 ITR 591 (Assam), CIT vs. Indian Bank Ltd. (1965) 56 ITR 77 (SC) and P.Krishna Menon vs. CIT 35 ITR 48 (SC) relied on; CIT vs. Model Mfg. Co. P.Ltd. (1980) 122 ITR 767 (Cal.) distinguished.” 7.2. The Hon’ble Bombay High Court in the case of CIT vs. Panaji Goa vs. Phil Corpn. Ltd. 244 CTR 526 (Bom.) held…

DCIT, Circle - 8, Kolkata vs. M/S. Newdeal Finance & Investment Limited, Kolkata

In the result, Revenue’s appeal is allowed for statistical purpose

ITA 1558/KOL/2011[2007-08]Status: DisposedITAT Kolkata11 Mar 2016AY 2007-08

Bench: Shri Mahavir Singh & Shri Waseem Ahmedassessment Year :2007-08

Section 143(2)Section 143(3)Section 14ASection 36(1)(iii)

…d. AR further stated that money borrowed was for the purpose of business and the interest expenditure incurred thereon is an allowable deduction and in this regard relied on the decision of Hon'ble Supreme Court in the case of State of Madras v. Coelho (1964) 53 ITR 186 (SC) held that “in ordinary commercial practice, payment of interest is taken as a revenue expenditure”. Further, when the capital was borrowed for the purpose of business, it is immaterial how the borrowed capital was applied because clause (ii) of Sec. 36(1) requires that borrowings, on which interest is paid, should be for the purpose of busine…

Tac Resources (I) Pvt Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee in ITA Nos

ITA 978/CHNY/2014[2007-08]Status: DisposedITAT Chennai11 Dec 2015AY 2007-08

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos. 977 & 978/Mds/2014 "नधा"रण वष" /Assessment Years : 2006-07 & 2007-08. Tax Resources (I) Pvt. Ltd, Vs. The Assistant Commissioner No.224 & 232 Okkiam Of Income Tax, Thoraipakkam, Company Circle Iii(1) Chennai 600 096. Chennai.

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Dr. B. Nischal, IRS, JCIT
Section 143(1)Section 143(3)Section 148

…the carrying on of the business’’.’ (d) Beyond that no hard and fast rule can be laid down to explain what is meant by the word ‘solely’, occurring in the pre-1939 law’’. The test was considered by the Supreme Court in State of Madras vs. G.J. Coelho (1964) (53 ITR 186) were ‘’expenditure made under a transaction which is so closely related to the business that it could be viewed as an integral part of the conduct of the business, may be regarded as revenue expenditure laid out wholly and exclusively for the purposes of the business’’. The assessee has not violated any law and expenditure has been incurred for…

Tac Resources (I) Pvt Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee in ITA Nos

ITA 977/CHNY/2014[2006-07]Status: DisposedITAT Chennai11 Dec 2015AY 2006-07

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos. 977 & 978/Mds/2014 "नधा"रण वष" /Assessment Years : 2006-07 & 2007-08. Tax Resources (I) Pvt. Ltd, Vs. The Assistant Commissioner No.224 & 232 Okkiam Of Income Tax, Thoraipakkam, Company Circle Iii(1) Chennai 600 096. Chennai.

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Dr. B. Nischal, IRS, JCIT
Section 143(1)Section 143(3)Section 148

…the carrying on of the business’’.’ (d) Beyond that no hard and fast rule can be laid down to explain what is meant by the word ‘solely’, occurring in the pre-1939 law’’. The test was considered by the Supreme Court in State of Madras vs. G.J. Coelho (1964) (53 ITR 186) were ‘’expenditure made under a transaction which is so closely related to the business that it could be viewed as an integral part of the conduct of the business, may be regarded as revenue expenditure laid out wholly and exclusively for the purposes of the business’’. The assessee has not violated any law and expenditure has been incurred for…