Upper India Publishing House Pvt. Ltd. v. CIT

117 ITR 569Supreme Court of India1979#3151 most cited

What is Upper India Publishing House Pvt. Ltd. v. CIT authority for?

Expenditure or payments to related persons cannot be disallowed under Section 40A(2)(b) unless the Assessing Officer first establishes that the expenditure is excessive or unreasonable. The onus is on the revenue to prove such unreasonableness.

37

judgments rely on this decision, according to BharatTax’s citation analysis of 366,369 Indian tax judgments — from 2008 to 2026.

Also referred to as

Upper India Publishing House Pvt. Ltd. v. CIT · Section 40A(2)(b) · related persons · excessive expenditure · unreasonable expenditure · disallowance · onus of proof · fair market value · legitimate needs of business

Sections most often in play

Section 143(1)Section 143(3)Section 40A(2)(b)Section 68Section 115BBESection 139(4)Section 144C(1)Section 144C(5)

Issues it is cited on

commercial expediencysection 271section 27section 143(1)previous yearsection 143personsection 14indiatotal incomebusinesscompany

Judgments citing Upper India Publishing House Pvt. Ltd. v. CIT

Entertainment Network (India) Ltd, Mumbai vs. Asst CIT RG 11(1), Mumbai

In the result, the appeals of the assessee in ITA No

ITA 852/MUM/2016[2010-11]Status: DisposedITAT Mumbai26 Jun 2019AY 2010-11

Bench: Shri Sandeep Gosain & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.852/Mum/2016 (नििाारण वर्ा / Assessment Year: 2010-11) बिाम/ Entertainment Network Acit 16(1), Room No. 439, 4T H Floor, Aayakar Bhavan, (India) Ltd., M.K Road, 4T H Floor, A Wing, V. Mumbai- 400020 Matulya Centre, Senapati Bapat Marg, Lower Parel (West), Mumbai-400013 स्थायी ऱेखा सं./ Pan :Aaace7796G आयकर अपीऱ सं./I.T.A. No.812/Mum/2016 (नििाारण वर्ा / Assessment Year: 2010-11) बिाम/ Acit 16(1), Room No. 439, Entertainment Network 4T H Floor, Aayakar Bhavan, (India) Ltd., M.K Road, Mumbai 400020 4T H Floor, A Wing, V. Matulya Centre, Senapati Bapat Marg, Lower Parel(West), Mumbai-400013 स्थायी ऱेखा सं./ Pan : Aaace7796G (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Respondent: Shri. R. Manjunatha Swamy &
Section 143(3)Section 14A

…istinguishable material was produced. The commission @ 5% was paid to BCCL. The range of commission in such type of business varies from 5% to 20%. It does not seems justifiable in view of the law settled in Upper India Publishing House P. Ltd. Vs. CIT (1979) 117 ITR 569(SC), CIT Vs. V.S. Dempo & Co. (P.) Ltd. (2011) 336 ITR 209 (Bom), CIT Vs. Raman Boards Ltd. (2013) 355 ITR 305 (Karnataka), CIT Vs. Modi Revlon (P.) Ltd. (2012) 210 taxman 161 (Delhi) (MAG) & CIT(A) in own case for A.Y. 2010-11 dated 16.11.2015. In view of the facts and circumstances of the case and relying upon the law relied by the assessee we…

ACIT 16(1), Mumbai vs. Entertainment Network (India) Ltd, Mumbai

In the result, the appeals of the assessee in ITA No

ITA 812/MUM/2016[2010-11]Status: DisposedITAT Mumbai26 Jun 2019AY 2010-11

Bench: Shri Sandeep Gosain & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.852/Mum/2016 (नििाारण वर्ा / Assessment Year: 2010-11) बिाम/ Entertainment Network Acit 16(1), Room No. 439, 4T H Floor, Aayakar Bhavan, (India) Ltd., M.K Road, 4T H Floor, A Wing, V. Mumbai- 400020 Matulya Centre, Senapati Bapat Marg, Lower Parel (West), Mumbai-400013 स्थायी ऱेखा सं./ Pan :Aaace7796G आयकर अपीऱ सं./I.T.A. No.812/Mum/2016 (नििाारण वर्ा / Assessment Year: 2010-11) बिाम/ Acit 16(1), Room No. 439, Entertainment Network 4T H Floor, Aayakar Bhavan, (India) Ltd., M.K Road, Mumbai 400020 4T H Floor, A Wing, V. Matulya Centre, Senapati Bapat Marg, Lower Parel(West), Mumbai-400013 स्थायी ऱेखा सं./ Pan : Aaace7796G (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Respondent: Shri. R. Manjunatha Swamy &
Section 143(3)Section 14A

…istinguishable material was produced. The commission @ 5% was paid to BCCL. The range of commission in such type of business varies from 5% to 20%. It does not seems justifiable in view of the law settled in Upper India Publishing House P. Ltd. Vs. CIT (1979) 117 ITR 569(SC), CIT Vs. V.S. Dempo & Co. (P.) Ltd. (2011) 336 ITR 209 (Bom), CIT Vs. Raman Boards Ltd. (2013) 355 ITR 305 (Karnataka), CIT Vs. Modi Revlon (P.) Ltd. (2012) 210 taxman 161 (Delhi) (MAG) & CIT(A) in own case for A.Y. 2010-11 dated 16.11.2015. In view of the facts and circumstances of the case and relying upon the law relied by the assessee we…

DCIT, Circle - 14(2), Kolkata vs. M/S. Navketan Nurshing Home Pvt. Ltd., Kolkata

Appeal is dismissed

ITA 47/KOL/2018[2012-13]Status: DisposedITAT Kolkata17 May 2019AY 2012-13

Bench: Shri S.S.Godara & Dr. A.L. Sainiassessment Year :2012-13 Dcit, Circle-14(2), V/S. M/S Navketan Nurshing Aayakar Bhawana, Home Pvt. Ltd., 1B, Plot Porba, 6Th Floor, 110, No.193 Sector-Iii, Salt Shantipally, Kolkata-107 Lake City, Kolkatka-91 [Pan No.Aabcn 9379 F] .. अपीलाथ" /Appellant ""यथ"/Respondent Shri Robin Choudhury, Addl Cit-Dr अपीलाथ" क" ओर से/By Appellant Shri Manoj K. Tiwari, Fca ""यथ" क" ओर से/By Respondent 25-04-2019 सुनवाई क" तार"ख/Date Of Hearing 17-05-2019 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per S.S.Godara:- This Revenue’S Appeal For Assessment Year 2012-13 Arises Against The Commissioner Of Income Tax (Appeals)-5, Kolkata’S Order Dated 18.10.2017 Passed In Case No.A.No.120/Cit(A)-5/Cir-14(2)/15-16, Involving Proceedings U/S 143(3) Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Parties. Case File Perused. 2. The Revenue’S Identical Both Substantive Grounds Seek To Reverse The Cit(A)’S Findings Reversing The Assessing Officer’S Action Invoking Sec. 40A(2) Disallowance Of ₹10 Lac & ₹1,70,63,423/- Representing Director’S Salary & Operation & Management Services Paid To Holding Company M/S Columbia Asia Hospital Pvt. Ltd.; Respectively. The Cit(A)’S Detailed Discussion Reversing Assessing Officer’S Action Reads As Under:- 4.2. The A/R Of The Appellant In His Submission Stated That "Columbia Asia Is An International Healthcare Group Operating A Chain Of Modem Hospitals Across Asia. Columbia Asia Hospitals

Section 143(3)Section 40A(2)

…d. It is well settled that the provisions of section. 40A(2)(a) of the Act cannot have any application unless it is first concluded that the expenditure was excessive or unreasonable, as held in the case of Upper India Publishing House (P.) Ltd. v. C1T (1979) 117 ITR 569 (SC). In the instant case, there is nothing to suggest that the AO found the payment of remuneration to director excessive having regard to either (a) fair market value of the services or facilities; or (b) the legitimate needs of the business of the assessee; or (c) the benefits derived by or accruing to the assessee on receipt of such services…

DCIT-6(3)(1), Mumbai vs. M/S.Frischmann Prabhu (I) Privets Limited, Mumbai

ITA 5554/MUM/2017[2013-14]Status: DisposedITAT Mumbai25 Apr 2019AY 2013-14

Bench: Hon’Ble Sh. G. S. Pannu, Vp & Hon’Ble Sh. Sandeep Gosain, Jm आयकरअपीलसं./ I.T.A. No. 5554/Mum/2017 (निर्धारणवर्ा / Assessment Year: 2013-14) In The Matter Of:

For Respondent: Shri Malav P. Sheth, AR
Section 139(1)Section 143(1)Section 143(3)Section 2(22)Section 2(22)(e)Section 2(24)(x)Section 36Section 40A(2)(a)

…carried out any exercised to compare the expenditure so incurred by the assessee to prove that the same was excessive and unreasonable. We also rely upon the decision of Hon'ble Supreme Court in the case of Upper India Publishing House Pvt. Ltd. Vs CIT {1979} 117 ITR 569(SC, 16 I.T.A. No. 5554/Mum/2017 M/s Frischmann Prabhu India Pvt. Ltd wherein it was held that section 40A(2)(a) cannot have application, unless it is first held that the expenditure on rent was excessive or unreasonable. 18. Thus in the absence of any opinion/cogent findings from the A.O. in relation to unreasonableness/excessive payment to rela…

M/S. Satts Estates Limited, Kolkata vs. ITO, Ward - 8(4), Kolkata

In the result the appeal of the assessee is allowed

ITA 761/KOL/2018[2012-13]Status: DisposedITAT Kolkata13 Jul 2018AY 2012-13

Bench: Hon’Ble Shri N.S.Saini, Am ] Assessment Year : 2012-13

For Appellant: Shri Rakesh Jain, FCAFor Respondent: Shri Sanjoy Mukherjee, Addl.CIT
Section 40A(2)

…disallowed. It is well settled that the provisions of section 40A(2) (a) of the Act cannot have any application unless it is first concluded that the expenditure was excessive or unreasonable as held in the case of Upper India Publishing House (P) Ltd. vs CIT 117 ITR 569 (SC). 12. It is observed that the CIT(A) has brought no material on record on the basis of three criterias as listed out by the Hon’ble Gujarat High Court to show that the remuneration paid to the directors is excessive or unreasonable. In absence of the same in my considered view the disallowance made cannot be sustained in law. I therefore set…

Chennai Civil Tech Research Foundation Pvt. Ltd., Chennai vs. ITO Corporate Ward 1(3), Chennai

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

ITA 2974/CHNY/2017[2013-14]Status: DisposedITAT Chennai04 Jul 2018AY 2013-14

Bench: Shri Abraham P.George

For Appellant: Mr.R.Sivaraman, Adv
Section 131Section 40A(2)Section 40A(2)(b)

…आयकर अपील"य अ"धकरण, ‘ए’ "यायपीठ, चे"नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ (SMC) BENCH: CHENNAI "ी अ"ाहम पी. जॉज", लेखासद"य के सम" BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2974/Chny/2017 "नधा रण वष /Assessment Year: 2013-14 Vs. M/s.Chennai Civil Tech Research, The Income Tax Officer, Foundation Pvt. Ltd., Corporate Ward-1(3), No.264, Nehru Nagar, 2nd Main Road Chennai. Off OMR, Near Kandhanchavadi, Kottivakkam, Chennai-600 096. [PAN: AADCC 0887 H] (अपीलाथ$/Appellant) (%&यथ$/Respondent) अपीलाथ$ क' ओर से/ Appellant by : Mr.R.Sivaraman, Adv. : %&यथ$ क' ओर से /Respondent by Mr.B.…

Solanki Developers, Thane vs. DCIT Cir. 3, Thane

ITA 4700/MUM/2016[2010-11]Status: DisposedITAT Mumbai01 Mar 2018AY 2010-11
For Appellant: Shri Rajat Mittal - DRFor Respondent: Shri M. Subramaninan
Section 143(3)Section 254(1)Section 40Section 40A(2)(b)

…आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, , , , मुंबई आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण मुंबई मुंबई “सी” ” ” ” खंडपीठ मुंबई खंडपीठ खंडपीठ खंडपीठ Income-tax Appellate Tribunal “C” Bench Mumbai सव"ी सव"ी राजे"" राजे"", लेखा एवं रिवश सूद रिवश सूद, "याियक लेखा सद"य सद"य एवं "याियक सद"य सद"य सव"ी सव"ी राजे"" राजे"" लेखा लेखा सद"य सद"य एवं एवं रिवश सूद रिवश सूद "याियक "याियक सद"य सद"य Before S/Sh. Rajendra, Accountant Member & Ramlal Negi, Judicial Member अपील संसंसंसं./I.T.A. No. 4700//Mum/2016, िनधा"रण वष" /Assessment Year: 2010-11 आयकर अपील िनधा"रण वष" आयकर आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" DCIT, Circl…

ITO, New Delhi vs. M/S. Sport Station India Pvt. Ltd., New Delhi

In the result, both the Appeals filed by the Revenue stand dismissed

ITA 4337/DEL/2014[2011-12]Status: DisposedITAT Delhi16 Dec 2016AY 2011-12

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

For Appellant: Sh. B.K. Anand, CAFor Respondent: Sh. S.K. Jain, Sr. DR
Section 143(3)Section 40Section 40A(2)(a)Section 40A(2)(b)

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. No. 4337/DEL/2014 & I.T.A. No. 4398/DEL/2014 A.YRS. : 2011-12 & 2010-11 INCOME TAX OFFICER, M/S SPORT STATION INDIA PVT. LTD. (NOW MERGED WITH SSIPL LIFE STYLE WARD 9(2), VS. (P) LTD.) ROOM NO. 236, CR BUILDING, B-1/F-4, Mohan Cooperative Industrial IP ESTATE, NEW DELHI Area, Main Mathura Road, New Delhi – 110 044 (PAN: AADCS6357C) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) Department by : Sh. S.K. Jain, Sr.…

Rajendra H Salot, Mumbai vs. ITO 15(1)(4), Mumbai

The appeal of the assessee is partly allowed

ITA 4050/MUM/2013[2009-10]Status: DisposedITAT Mumbai05 Jul 2016AY 2009-10

Bench: Shri Joginder Singh & Shri Ashwani Tanejaassessment Year: 2009-10 Mr. Rajendra H. Salot, Ito-15(1)(4), 18, Maheswar Prakash, Mumbai बनाम/ Building No.1, Jain Derasar Vs. Lane, Santacruz (West), Mumbai-400054 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aalps6170L

Section 36(1)(iii)Section 37(1)Section 40

…supports the case of the assessee. Even otherwise, section 40A(2)(a) cannot have any application unless it is first held that expenditure was excessive and unreasonable as was held by Hon’ble Apex Court in Upper India Publishing House Pvt. Ltd. vs CIT (1979) 117 ITR 569 (SC) and Corronation Flour Mills vs ACIT (2009) 314 ITR (Guj.). Considering the totality of facts and the judicial pronouncements, discussed hereinabove, and more specifically that it was a business advance, we find merit in the contention of the assessee, therefore, this ground is allowed, Finally, the appeal of the assessee is partly allowed. T…

ITO, New Delhi vs. M/S. Media Satellite & Telecoms Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 1947/DEL/2014[2009-10]Status: DisposedITAT Delhi01 Jul 2016AY 2009-10

Bench: Shri H.S. Sidhu & Shri Prashant Maharishia.Y. : 2009-10 Ito, Ward 6(3), M/S Media Satellite & Room No. 304, Cr Vs. Telecoms Ltd., Building, B-86/1, Media House, New Delhi Okhla Industrial Area, Phase-Ii, New Delhi (Pan: Aaacm0712D) (Appellant) (Respondent)

For Appellant: NoneFor Respondent: Sh. P. Dam Kanunjnja, Sr
Section 143Section 143(1)Section 14ASection 40A(2)(b)Section 40A(3)

…e of business promotion. Ld. CIT(A) has observed that the AO has not been able to brought any fact contrary to what is claimed by the assessee. Ld. CIT(A) has relied upon the case law in the case 5 A.Y. 2009-10 of Upper India Publishing House Vs. CIT (1979) 117 ITR 569 (SC) wherein, it has been held that whether payment is excessive or reasonable is a question of fact. Since the transactions are recorded in the books of accounts of the assessee, unless there is a fact to contradict such transactions, disallowances cannot be made on the basis of certain assumptions. It is a normal practice in business that expen…

Amserve Consultants Ltd., New Delhi vs. ADIT, New Delhi

In the result both the appeals of the assesses are allowed

ITA 6059/DEL/2013[2009-10]Status: DisposedITAT Delhi29 Jun 2016AY 2009-10

Bench: Shri I.C. Sudhir & Shri J. Sudhakar Reddyay: 2009-10

For Appellant: Sh. C.S.Agarwal, Sr.AdvFor Respondent: Sh. Ravi Jain, CIT, D.R
Section 143(3)Section 40A(2)Section 40A(2)(b)

…o what extent the resources of Amway in respect of data processing services, infrastructure services and customer facility services are used by the appellant company. The Hon’ble Supreme Court in the case of Upper India Publishing House (P) Ltd. v CIT, (1979) 117 ITR 569 (SC) has held that whether a particular expenditure is excessive and reasonable or not is essentially a question of fact and it does not involve any question of law. In view of the above, the case of Glaxo Smithkline Asia (P) Ltd. is totally distinguishable on facts from the appellant’s case. In view of the above discussion, l agree with the find…

DCIT, New Delhi vs. M/S. Sigma Corporation India Ltd., New Delhi

In the result the appeal of the Revenue is partly allowed

ITA 6229/DEL/2012[2009-10]Status: DisposedITAT Delhi14 Oct 2015AY 2009-10

Bench: Sh. G. C. Gupta, Hon’Ble & Sh. O.P.Kant

For Appellant: Sh. Sujit Kumar, Sr. DRFor Respondent: Sh. Baljeet Singh, CA
Section 143(3)Section 195Section 40Section 40A(2)(b)Section 9Section 9(1)(i)

…ed. It is well settled that the provisions of section 40A(2)(a) of the Act cannot have any application unless it is first concluded that the expenditure was excessive or unreasonable, as held in the case of Upper India Publishing House (P) Ltd. Vs. CIT (1979) 117 ITR 569/1 Taxman 365 (SC). In the instant case, there is nothing to suggest that the AO found the payment of remuneration to director excessive having regard to either (a) fair market value of the service or facilities; or (b) the legitimate needs of the business of the assessee; or (c) the benefits derived by or accruing to the assessee on receipt of su…

Commissioner of Income Tax vs. Expo Mecanique Marketing Pvt Ltd

Accordingly, the appeal, being devoid of merit, stands dismissed without any

ITA - 1154 / 2010HC Delhi17 Aug 2010
Section 260ASection 40Section 40A(2)Section 40A(2)(B)

…expenditure is excessive or unreasonable, the Courts should not interfere as that would not give rise to substantial question of law. He has commended us to the decisions in Upper India Publishing House P. Ltd. v. Commissioner of Income- tax, (1979) 117 ITR 569(SC), Commissioner of Income-tax v. Northern India Iron and Steel Co. Ltd., (1989) 179 ITR 599(Delhi) and Commissioner of Income-tax v. Mohta Electrosteel Ltd., (1995) 215 ITR 522(Delhi). On a perusal of the aforesaid decisions, the principle that emanates is that the payment of salary to a ITA 1154/2010 page 4 of 5 . direc…

The Commissioner of Income Tax vs. Oriental Structural Engineers P.Ltd

The appeal is dismissed

ITA/146/2010HC Delhi11 Feb 2010
For Respondent: Mr Rajat Navet and Mr Ankit Gupta
Section 40Section 40ASection 40A(2)Section 40A(2)(b)

…f commission, as well as, service charges to CIL was reasonable having regard to the provisions of Section 40A of the Act. This issue according to us is a pure question of fact. The Supreme Court in Upper India Publishing House Pvt. Ltd. Vs. CIT: (1979) 117 ITR 569 and the Division Bench of thi C t i th f CIT V N th I di I & 2010:DHC:857-DB Mohta Electrosteel Ltd: (1995) 215 ITR 522 have held that whether or not an expenditure is unreasonable and hence, merits disallowance under the provisions of Section 40A of the Act, is essentially a question of fact”. 5. No question of law, what to speak of a…

The Commissioner of Income Tax vs. Oriental Structural Engineers P.Ltd

The appeal is dismissed

ITA - 146 / 2010HC Delhi11 Feb 2010
For Respondent: Mr Rajat Navet and Mr Ankit Gupta
Section 40Section 40ASection 40A(2)Section 40A(2)(b)

…f commission, as well as, service charges to CIL was reasonable having regard to the provisions of Section 40A of the Act. This issue according to us is a pure question of fact. The Supreme Court in Upper India Publishing House Pvt. Ltd. Vs. CIT: (1979) 117 ITR 569 and the Division Bench of thi C t i th f CIT V N th I di I & 2010:DHC:857-DB Mohta Electrosteel Ltd: (1995) 215 ITR 522 have held that whether or not an expenditure is unreasonable and hence, merits disallowance under the provisions of Section 40A of the Act, is essentially a question of fact”. 5. No question of law, what to speak of a…

Income Tax vs. Dr R. N. Goel

In the result, the appeal is dismissed

ITA/632/2007HC Delhi06 Nov 2008
For Appellant: Mr Prem Lata BansalFor Respondent: Mr C S Aggarwal, Sr Advocate with Mr
Section 143(1)(a)Section 143(2)Section 260ASection 40A

…Page 11 of 11 service charges to CIL was reasonable having regard to the provisions of Section 40A of the Act. This issue according to us is a pure question of fact. The Supreme Court in Upper India Publishing House Pvt Ltd v. CIT: (1979) 117 ITR 569 and the Division Bench of this Court in the case of CIT v. Northern India Iron & Steel Company Ltd: (1989) 179 ITR 599 and CIT v. Mohta Electrosteel Ltd: (1995) 215 ITR 522 have held that whether or not an expenditure is unreasonable and hence, merits disallowance under the provisions of Section 40Aof the Act, is essentially a question of fa…

Income Tax vs. Dr R. N. Goel

In the result, the appeal is dismissed

ITA/631/2007HC Delhi06 Nov 2008
For Appellant: Mr Prem Lata BansalFor Respondent: Mr C S Aggarwal, Sr Advocate with Mr
Section 143(1)(a)Section 143(2)Section 260ASection 40A

…Page 11 of 11 service charges to CIL was reasonable having regard to the provisions of Section 40A of the Act. This issue according to us is a pure question of fact. The Supreme Court in Upper India Publishing House Pvt Ltd v. CIT: (1979) 117 ITR 569 and the Division Bench of this Court in the case of CIT v. Northern India Iron & Steel Company Ltd: (1989) 179 ITR 599 and CIT v. Mohta Electrosteel Ltd: (1995) 215 ITR 522 have held that whether or not an expenditure is unreasonable and hence, merits disallowance under the provisions of Section 40Aof the Act, is essentially a question of fa…