Veecumsees v. CIT

220 ITR 185Supreme Court of India1996#3607 most cited

What is Veecumsees v. CIT authority for?

Interest on loans taken for business purposes remains deductible even if the asset acquired with the loan is later sold, as long as the liability for the loan continues to exist. The fact that the cinema house was eventually sold does not negate the deductibility of interest if the borrowing subsisted.

33

judgments rely on this decision, according to BharatTax’s citation analysis of 366,418 Indian tax judgments — from 2012 to 2025.

Also referred to as

Veecumsees v. CIT · Section 36(1)(iii) · interest on loans · business purpose · enduring benefit · deductibility of interest · cinema house · subsisting liability

Also reported as

86 Taxmann 243

Sections most often in play

Section 142(1)Section 143(2)Section 143(3)Section 36(1)(iii)Section 37(1)Section 115JBSection 132Section 139(1)

Issues it is cited on

section 80mstrategic investmentsection 115jb(2)scheme of arrangementsection 14a(2)deduction u/s 80iatransferor companyenduring benefitdemergersection 80iacommercial expediencybook profits

Judgments citing Veecumsees v. CIT

Jindal Steel & Power Ltd., New Delhi vs. ACIT, Hisar

In the result, the appeal of the assessee is partly allowed

ITA 893/DEL/2014[2009-10]Status: DisposedITAT Delhi29 Apr 2019AY 2009-10

Bench: Sh. Bhavnesh Saini & Sh. N. S. Sainiita No. 893/Del/2014 : Asstt. Year : 2009-10 Jindal Steel & Power Ltd., Vs Asstt. Commissioner Of Jindal Centre, 12, Bhikaji Cama Income Tax, Hisar Circle, Place, New Delhi-110066 Hisar (Appellant) (Respondent) Pan No. Aaacj7079D Assessee By : Sh. Salil Kapoor, Adv., Sh. Sumit Lal Chandani, Adv., Ms. Ananya Kapoor, Adv. & Ms. Pallavi Saigal, Adv. Revenue By : Sh. Sanjay I. Bara, Cit Dr Date Of Hearing :05.03.2019 Date Of Pronouncement : 29.04.2019 Order Per N. S. Saini: This Is An Appeal Filed By The Assessee Against The Order Of Assessing Officer U/S 143(3)/144C(13) Of The Income Tax Act, 1961 Dated 29.10.2018 For Assessment Years 2013-14

For Appellant: Sh. Salil Kapoor, AdvFor Respondent: Sh. Sanjay I. Bara, CIT DR
Section 143(3)Section 144CSection 80Section 80I

…al Steel & Power Ltd. " CIT Vs. Prithvi Insurance Co. Ltd. : 63 ITR 632 (SC) " L.M.Chhabda & Sons Vs. CIT: 65 ITR 639 (SC) " Produce Exchange Corporation Ltd. Vs. CIT: 77 ITR 739 (SC) " B .R.Ltd. Vs. V.P.Gupta CIT Bombay: 113 ITR 647 (SC) " Veecumsees Vs. CIT 220 ITR 185 (SC) " DCIT, Baroda Vs. Gujarat Alkialier & Chemicals Pvt. Ltd.: 299 ITR 85 (SC) " DCIT Vs. Core health Care Ltd. : 298 ITR 194 (SC) " CIT Vs. Modi Industries Ltd. (No. 3): 200 ITR 341(Delhi) " CIT Vs. Triveni Engineering and Industries Limited. : 181Taxman 5 (Delhi) " CIT Vs. Relaxo Footwears Ltd. : 293 ITR 231 (Delhi) " CIT Vs. Usha Iron & Ferr…

Income Tax Officer, Ward-2-2, Jaipur vs. M/S Sukh Sagar Enclave, Jaipur

In the result, appeal of the revenue is dismissed

ITA 1116/JPR/2018[2014-15]Status: DisposedITAT Jaipur11 Jan 2019AY 2014-15
For Appellant: Shri P.C. Parwal (C.A)For Respondent: Shri Varinder Mehta (CIT-DR) fu/kZkfjrh dh vksj ls@
Section 37(1)

…cture of special alloy wire and billets was an extension of the existing business and not a new business. 15 ITO Vs M/s Sukh Sagar Enclave Consequently, the expenditure incurred was held to be a revenue expenditure. 13. Finally, in Veecumsees v. CIT [1996] 220 ITR 185(SC), the assessee ran a jewellery business and then commenced business in the exhibition of cinematographic films. The assessee obtained loans for building a cinema theatre and the question was whether the interest payable on the loans borrowed for the new business was a revenue expenditure or not. While answering the question in favour of the as…

D.C.I.T Cir - 6, Kolkata. vs. M/S Turner Morrison Ltd., Kolkata

In the result, the appeal of the Revenue as well as assessee both are partly allowed as indicated above

ITA 297/KOL/2013[2009-10]Status: DisposedITAT Kolkata12 Sept 2018AY 2009-10

Bench: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi

…judicial pronouncements- (i) Lakshmi Naryan Board Mills Pvt. Ltd. –vs.- CIT 205 ITR 88 (Calcutta High Court); I.T.A. No 297/KOL/2013 Assessment year: 2009-2010 & I.T.A. No. 161/KOL/2013 Assessment year: 2009-2010 Page 13 of 23 (ii) Veecumsees –vs.- CIT 220 ITR 185 (SC). 9. In the rejoinder, ld. D.R. contended that the claim of the assessee of other business activities as made by the ld. Counsel for the assessee is very vague and it is not clear. He contended that it is not clear as to what exactly was the main business of the assessee and how the various other activities claimed to be carried on constitut…

Shree Gurudatta Medical Stores & Cotton Ginners Pvt. Ltd., Jalgaon vs. Income-Tax Officer, Jalgaon

In the result, appeal of assessee is partly allowed

ITA 803/PUN/2017[2013-14]Status: DisposedITAT Pune23 May 2018AY 2013-14

Bench: Ms. Sushma Chowla, Jm आयकर अपीऱ सं. / Ita No.803/Pun/2017 यििाारण वषा / Assessment Year : 2013-14

For Appellant: Shri C.H. NaniwadekarFor Respondent: Dr. Vivek Aggarwal
Section 143(3)Section 50

…ctory were claimed till the date of sale of factory. He further pointed out that the same is to be allowed as business expenditure in view of the ratio laid down by the Hon’ble Supreme Court in the case of Veecumsees Vs. Commissioner of Income Tax reported in 220 ITR 185 (SC). ITA No.803/PUN/2017, 4 A.Y. 2013-14 8. The learned Departmental Representative for the Revenue on the other hand placed reliance on the order of Commissioner of Income Tax (Appeals). 9. On perusal of record, it is noted that the first issue raised in the present appeal is in respect of electricity expenses. The assessee initially was car…

E-City Investments & Holdings Comapny P. Ltd, Mumbai vs. DCIT Cir 8(1), Mumbai

In the result appeal filed by the assessee for the Asst

ITA 1153/MUM/2015[2008-09]Status: DisposedITAT Mumbai15 Feb 2017AY 2008-09

Bench: Shri B.R.Baskaran (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2008-09

For Appellant: Shri. Jay BhansaliFor Respondent: Shri. Suman Kumar
Section 115JSection 143(1)Section 143(3)(ii)Section 271(1)(c)Section 36(1)(iii)

…er to partners for their personal use, the claim of the interest is not allowable. But for such disallowance, a finding of fact, based on relevant material, is necessary as was held in CIT vs R.K. Metal Works 112 ITR 445 (Punjab). In Veecumsess vs CIT (1996) 220 ITR 185, 190 (SC), their lordship of the Apex Court have taken a view that when the assessee carries on more than one business and one business is transferred or closed and if loan was taken earlier for the business, which subsequently closed, but if the management is common, the interest paid on that loan cannot be denied, though one of the lines of the…

ACIT 18(1), Mumbai vs. V.S. Apte & Son, Mumbai

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

ITA 6934/MUM/2014[2009-10]Status: DisposedITAT Mumbai05 Aug 2016AY 2009-10

Bench: Shri Jason P. Boaz, Am & Shri Sandeep Gosain, Jm Acit-18(1), Vs. M/S. V. S. Apte & Son, Room No.116,1St Floor, Piramal 325, Adhyaru Industrial Chambers, Parel, Estate, Mumbai-400 012. Lower Parel, Mumbai-400 013. Pan: Aadfv 3228J Appellant .. Respondent

Section 143(3)

…IN THE INCOME TAX APPELLATE TRIBUNAL “F”, BENCH MUMBAI BEFORE SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSAIN, JM ACIT-18(1), Vs. M/s. V. S. Apte & Son, Room No.116,1st Floor, Piramal 325, Adhyaru Industrial Chambers, Parel, Estate, Mumbai-400 012. Lower Parel, Mumbai-400 013. PAN: AADFV 3228J Appellant .. Respondent Appellant by Shri A. Kumbhar Respondent by Shri Rushabh Mehta Date of hearing: 05-05-2016 Date of pronouncement:05-08-2016 O R D E R PER SANDEEP GOSAIN,JUDICIAL MEMBER: The present appeal has been filed by the Revenue against the order of the learned CIT (A)-29, Mumbai dated 20-08-2014 passed in a…

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)

…end, the entire interest paid on borrowing should be allowed as deduction for computing business income and no part of interest should be apportioned and deducted from dividend as per ratio held by Hon'ble Supreme Court in the case of Veecumsees v. CIT (1996) 220 ITR 185 (SC). This principle has been enunciated in various judicial pronouncements in the case of India Cements Ltd. v. CIT 60 ITR and by hoc Gujarat High Court in the case of Alembic Glass Industries Ltd. (1976) 103 ITR 715 (Guj). Accordingly the Ld. CIT(A) disallowed the addition made by AO by observing as under:- “The AO has discussed the issue at le…

Lee & Muirhead P. Ltd, Mumbai vs. Addl CIT RG 2(2), Mumbai

In the result, the assessee’s appeal is partly allowed

ITA 6518/MUM/2012[2009-10]Status: DisposedITAT Mumbai29 Feb 2016AY 2009-10

Bench: Shri Amit Shukla, Jm & Shri Rajesh Kumar, Am आमकय अऩीर सं./I.T.A. No 7435 /Mum/2011 (ननधधारण वषा / Assessment Year: 2008-09) M/S. Lee & Murihead Pvt. Ltd. Addl. Commissioner Of Income Oricon House, 2Nd Floor Tax -Range 2(2) बनधम/ Room No. 548, 5Th Floor 12-K, Dubhash Marg, Vs. Fort Aayakar Bhavan Mumbai 400023. Mumbai 400020. (अऩीराथी /Appellant) (प्रत्मथी / Respondent) : आमकय अऩीर सं./I.T.A. No 7849/Mum/2011 (ननधधारण वषा / Assessment Year: 2008-09) Asstt. Commissioner Of Income M/S. Lee & Murihead Pvt. Ltd. Oricon House, 2Nd Floor Tax (Osd) Circle 2(2), बनधम/ Room No. 545, 5Th Floor 12-K, Dubhash Marg Vs. Aayakar Bhavan Fort, Mumbai 400020. Mumbai 400023. स्थामी रेखा सं./ जीआइआय सं./ Pan/Gir No. Aaacl0918M (अऩीराथी /Appellant) (प्रत्मथी / Respondent) : आमकय अऩीर सं./I.T.A. No 6518/Mum/2012 (ननधधारण वषा / Assessment Year: 2009-10) M/S. Lee & Murihead Pvt. Ltd. Addl. Commissioner Of Income Oricon House, 2Nd Floor Tax -Range 2(2) बनधम/ Room No. 548, 5Th Floor 12-K, Dubhash Marg, Vs. Fort Aayakar Bhavan Mumbai 400023. Mumbai 400020. (अऩीराथी /Appellant) (प्रत्मथी / Respondent) : स्थधयी ऱेखध सं./ Pan : Aaaclo918M & Other Two Appeals.

For Appellant: Ms. Aarti VissanjiFor Respondent: Shri Yogesh Kamal
Section 143(2)Section 14ASection 36(1)(va)Section 36(1)(vii)Section 37(1)

…e” clause had to be written off as the same was not part of the slump sale. Finally the Ld AR prayed for reversing the order of lower authorities on this point and allowing the claim of the assessee by relying on decisions in the case of Veecumsees Vs CIT(SC) 220 ITR 185 & CIT Vs Rajni Investments Pvt. Ltd (Mad) 319 ITR 435 . 7.4 The ld DR per contra relied on the orders of the authorities below. 7.5. We have considered the rival submissions and perused the materials on records. During the year the assessee sold its general cargo division vide agreement dated 04.04.2007 w.e.f. 1.5.2007 whereas it continued to ow…

E-City Investments & Holdings Co. Pvt. Ltd., Mumbai vs. D.C.I.T. RG. 8(1) (OSD), Mumbai

The appeal of the assessee is allowed

ITA 8382/MUM/2011[2008-09]Status: DisposedITAT Mumbai03 Feb 2016AY 2008-09

Bench: Shri Joginder Singh & Shri Ashwani Tanejaassessment Year: 2008-09 E-City Investments & Holdings Dcit, Company Private Limited, Range-8(1)(Osd), बनाम/ 844/4, Shah Industrial Estate, Aayakar Bhavan, Vs. Off. New Link Road, Opp. M.K. Road, Laxmi Industrial Estate, Mumbai-400020 Andheri (West), Mumbai-400053 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No.Aaace8030F "नधा"रती क" ओर से / Assessee By Shri Vijay Mehta राज"व क" ओर से / Revenue By Mr.J. Saravanan -Dr

Section 143(3)Section 36(1)(iii)

…er to partners for their personal use, the claim of the interest is not allowable. But for such disallowance, a finding of fact, based on relevant material, is necessary as was held in CIT vs R.K. Metal Works 112 ITR 445 (Punjab). In Veecumsess vs CIT (1996) 220 ITR 185, 190 (SC), their lordship of the Apex Court have taken a view that when the assessee carries on more than one business and one business is transferred or closed and if loan was taken earlier for the business, which subsequently closed, but if the management is common, the interest paid on that loan cannot be denied, though one of the lines of the…

Tractel Tirfor India Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, the appeal is allowed

ITA 5775/DEL/2013[2002-03]Status: DisposedITAT Delhi28 Jan 2016AY 2002-03

Bench: Shri R.S. Syal & Shri Sudhanshu Srivastava

For Appellant: Shri Ajay Kumar Singhal, CAFor Respondent: Shri Rajiv Ranka, Sr. DR
Section 43B

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA Nos.5775 &6724/Del/2013 Assessment Years : 2002-03 & 2003-04 Tractel Tirfor India Pvt. Ltd., Vs. ITO, 302, Harsh Bhawan, Ward-16(4), 64-65, Nehru Place, New Delhi. New Delhi. PAN: AAACT4320R (Appellant) (Respondent) Assessee By : Shri Ajay Kumar Singhal, CA Department By : Shri Rajiv Ranka, Sr. DR Date of Hearing : 28.01.2016 Date of Pronouncement : 28.01.2016 ORDER PER R.S. SYAL, AM: These two appeals by the assessee relate to the assessment years 200…

P.Sundararajan, Avanashi vs. DCIT, Tiruppur

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

ITA 1666/CHNY/2013[2006-07]Status: DisposedITAT Chennai25 Jun 2015AY 2006-07

Bench: Shri Chandra Poojari & Shri V. Durga Raoआयकर अपील सं./ I.T.A. No.1666/Mds/2013 ("नधा"रण वष" / Assessment Year : 2006-2007)

For Appellant: Shri. G. Baskar, AdvocateFor Respondent: Shri. N. Madhavan, IRS, JCIT
Section 143(3)Section 147Section 148Section 36

…tory Pvt. Ltd. 190 ITR 643 (All.), B.P. Jeevan Reddy C.J. (as his Lordship then was) relying upon his earlier decision in H.R. Sugar Factory Pvt. Ltd.'s case that the assessee-company was not entitled to the allowance of interest. 14.8 In Veecumsees v. CIT, 220 ITR 185 (SC) ; The Hon'ble the Supreme Court held that deduction for payment of interest on the loans raised for building a cinema theatre, which was ultimately closed, was allowable deduction as the assessee was engaged in a composite business of jewellery and cinema. The facts of the case are distinguishable with the facts of the case in hand. I.T.…

CIT -Large Tax Payers Unit vs. Srf Ltd

ITA/344/2014HC Delhi15 Jan 2015

…ITA 344/14 Page 1 $~30 * IN THE HIGH COURT OF DELHI AT NEW DELHI Decided on : 15.01.2015 + ITA 344/2014 CIT -LARGE TAX PAYERS UNIT ..... Appellant Through : Sh. N.P. Sahni, Sr. Standing Counsel with Sh. Nitin Gulati, Jr. Standing Counsel and Sh. Judy James, Jr. Standing Counsel. versus SRF LTD. ..... Respondent Through Sh. Satyen Sethi and Sh. Arta Trana Panda, Advocates. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K. GAUBA MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) % 1. The Revenue is aggrieved by the impugned order of the Income Tax Appellate Tribunal (ITAT) dated 06.09.2013 in ITA No.4454/…

CIT vs. Hindustan Times Ltd

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

ITA - 95 / 2011HC Delhi14 Sept 2012

…Produce Exchange Corporation Ltd. v. CIT, [1970] 77 ITR 739; Standard Refinery and Distillery Ltd. v. CIT, 2012:DHC:5739-DB ITA-95 & 100/2011 Page 11 [1971] 79 ITR 589; Hooghly Trust (Pvt.) Ltd. v. CIT, [1969] 73 ITR 685 and Veecumsees v. CIT, [1996] 220 ITR 185 (SC)). In B. R. Ltd vs V. P. Gupta, C.I.T., Bombay, AIR 1978 SC 1320, after discussing the principles settled in the previous judgments, the Court held that the applicable test – wherever the issue arises, would be to see if the two commercial activities are “interlinked” or “interlaced”: “A common management, a common business Organisation,…