Workmen of Associated Rubber Industry Ltd. v. Associated Rubber

157 ITR 77Supreme Court of India1986#2498 most cited

What is Workmen of Associated Rubber Industry Ltd. v. Associated Rubber authority for?

The Supreme Court holds that courts must look beyond the form to the substance of a transaction to discover the true state of affairs, especially when ingenuity is used to avoid tax and welfare legislations.

46

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

Workmen of Associated Rubber Industry Ltd. · 157 ITR 77 · SC 1986 · substance over form · tax avoidance · look behind the smoke screen · true state of affairs · section 271(1)(c) · section 54F · court's duty · income tax evasion

Sections most often in play

Section 271(1)(c)Section 54F

Issues it is cited on

section 31paper companysection 251(2)share capital and share premiumsource of sourcecreditworthiness of the creditorsection 251(1)(a)live linksection 127(2)admission of additional evidenceentry operatorshare application money

Judgments citing Workmen of Associated Rubber Industry Ltd. v. Associated Rubber

ACIT, New Delhi vs. M/S. Superstar Agency Pvt. Ltd., New Delhi

ITA 5832/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…McDowell & Co Ltd. [1985] beneficiary of the transactions but there is 154 ITR 148 • routing of funds from Workmen of Associated Bhushan Steel Ltd. The Rubber Industry Ltd V funds received are given Associated Rubber Industry to other companies as Ltd [1986] 157 ITR 77 (SC) • soon as they are CIT V Durga Prasad More 82 received(Page – 36, Para ITR 540 (SC) • 7.9 – CIT(A)’s order) Bombay Oil Industries Ltd V  Therefore, the CIT(A) DCIT [2000] 82 ITD 626 has deleted addition of • CIT V Sree Meenakshi Mills Rs. 73.5 crores and Ltd 63 ITR 609 made addition of Rs. • CIT V Precision Finance Ltd 1.74 crores @ 2 percen…

ACIT, New Delhi vs. M/S. Sur Buildcon Pvt. Ltd., New Delhi

ITA 5831/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…McDowell & Co Ltd. [1985] beneficiary of the transactions but there is 154 ITR 148 • routing of funds from Workmen of Associated Bhushan Steel Ltd. The Rubber Industry Ltd V funds received are given Associated Rubber Industry to other companies as Ltd [1986] 157 ITR 77 (SC) • soon as they are CIT V Durga Prasad More 82 received(Page – 36, Para ITR 540 (SC) • 7.9 – CIT(A)’s order) Bombay Oil Industries Ltd V  Therefore, the CIT(A) DCIT [2000] 82 ITD 626 has deleted addition of • CIT V Sree Meenakshi Mills Rs. 73.5 crores and Ltd 63 ITR 609 made addition of Rs. • CIT V Precision Finance Ltd 1.74 crores @ 2 percen…

ITO, New Delhi vs. M/S Stylish Construction Pvt. Ltd., New Delhi

ITA 5744/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…McDowell & Co Ltd. [1985] beneficiary of the transactions but there is 154 ITR 148 • routing of funds from Workmen of Associated Bhushan Steel Ltd. The Rubber Industry Ltd V funds received are given Associated Rubber Industry to other companies as Ltd [1986] 157 ITR 77 (SC) • soon as they are CIT V Durga Prasad More 82 received(Page – 36, Para ITR 540 (SC) • 7.9 – CIT(A)’s order) Bombay Oil Industries Ltd V  Therefore, the CIT(A) DCIT [2000] 82 ITD 626 has deleted addition of • CIT V Sree Meenakshi Mills Rs. 73.5 crores and Ltd 63 ITR 609 made addition of Rs. • CIT V Precision Finance Ltd 1.74 crores @ 2 percen…

ITO, New Delhi vs. M/S. Sukhna Real Estate Pvt. Ltd., Ghaziabad

ITA 5742/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…McDowell & Co Ltd. [1985] beneficiary of the transactions but there is 154 ITR 148 • routing of funds from Workmen of Associated Bhushan Steel Ltd. The Rubber Industry Ltd V funds received are given Associated Rubber Industry to other companies as Ltd [1986] 157 ITR 77 (SC) • soon as they are CIT V Durga Prasad More 82 received(Page – 36, Para ITR 540 (SC) • 7.9 – CIT(A)’s order) Bombay Oil Industries Ltd V  Therefore, the CIT(A) DCIT [2000] 82 ITD 626 has deleted addition of • CIT V Sree Meenakshi Mills Rs. 73.5 crores and Ltd 63 ITR 609 made addition of Rs. • CIT V Precision Finance Ltd 1.74 crores @ 2 percen…

ITO, New Delhi vs. M/S. Sukhna Steel Pvt. Ltd., New Delhi

ITA 5741/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…McDowell & Co Ltd. [1985] beneficiary of the transactions but there is 154 ITR 148 • routing of funds from Workmen of Associated Bhushan Steel Ltd. The Rubber Industry Ltd V funds received are given Associated Rubber Industry to other companies as Ltd [1986] 157 ITR 77 (SC) • soon as they are CIT V Durga Prasad More 82 received(Page – 36, Para ITR 540 (SC) • 7.9 – CIT(A)’s order) Bombay Oil Industries Ltd V  Therefore, the CIT(A) DCIT [2000] 82 ITD 626 has deleted addition of • CIT V Sree Meenakshi Mills Rs. 73.5 crores and Ltd 63 ITR 609 made addition of Rs. • CIT V Precision Finance Ltd 1.74 crores @ 2 percen…

ITO, New Delhi vs. M/S. Sunlight Tour and Travels Pvt. Ltd., Sahibabad

ITA 5740/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…McDowell & Co Ltd. [1985] beneficiary of the transactions but there is 154 ITR 148 • routing of funds from Workmen of Associated Bhushan Steel Ltd. The Rubber Industry Ltd V funds received are given Associated Rubber Industry to other companies as Ltd [1986] 157 ITR 77 (SC) • soon as they are CIT V Durga Prasad More 82 received(Page – 36, Para ITR 540 (SC) • 7.9 – CIT(A)’s order) Bombay Oil Industries Ltd V  Therefore, the CIT(A) DCIT [2000] 82 ITD 626 has deleted addition of • CIT V Sree Meenakshi Mills Rs. 73.5 crores and Ltd 63 ITR 609 made addition of Rs. • CIT V Precision Finance Ltd 1.74 crores @ 2 percen…

ITO, New Delhi vs. M/S. Sintex Consumers Electronics Pvt. Ltd., Delhi

ITA 5736/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…McDowell & Co Ltd. [1985] beneficiary of the transactions but there is 154 ITR 148 • routing of funds from Workmen of Associated Bhushan Steel Ltd. The Rubber Industry Ltd V funds received are given Associated Rubber Industry to other companies as Ltd [1986] 157 ITR 77 (SC) • soon as they are CIT V Durga Prasad More 82 received(Page – 36, Para ITR 540 (SC) • 7.9 – CIT(A)’s order) Bombay Oil Industries Ltd V  Therefore, the CIT(A) DCIT [2000] 82 ITD 626 has deleted addition of • CIT V Sree Meenakshi Mills Rs. 73.5 crores and Ltd 63 ITR 609 made addition of Rs. • CIT V Precision Finance Ltd 1.74 crores @ 2 percen…

ITO, New Delhi vs. M/S. Supreme Placement Services Pvt. Ltd., New Delhi

ITA 5650/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…McDowell & Co Ltd. [1985] beneficiary of the transactions but there is 154 ITR 148 • routing of funds from Workmen of Associated Bhushan Steel Ltd. The Rubber Industry Ltd V funds received are given Associated Rubber Industry to other companies as Ltd [1986] 157 ITR 77 (SC) • soon as they are CIT V Durga Prasad More 82 received(Page – 36, Para ITR 540 (SC) • 7.9 – CIT(A)’s order) Bombay Oil Industries Ltd V  Therefore, the CIT(A) DCIT [2000] 82 ITD 626 has deleted addition of • CIT V Sree Meenakshi Mills Rs. 73.5 crores and Ltd 63 ITR 609 made addition of Rs. • CIT V Precision Finance Ltd 1.74 crores @ 2 percen…

ITO, New Delhi vs. M/S Angel Cement Pvt. Ltd., Ghaziabad

ITA 4691/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…McDowell & Co Ltd. [1985] beneficiary of the transactions but there is 154 ITR 148 • routing of funds from Workmen of Associated Bhushan Steel Ltd. The Rubber Industry Ltd V funds received are given Associated Rubber Industry to other companies as Ltd [1986] 157 ITR 77 (SC) • soon as they are CIT V Durga Prasad More 82 received(Page – 36, Para ITR 540 (SC) • 7.9 – CIT(A)’s order) Bombay Oil Industries Ltd V  Therefore, the CIT(A) DCIT [2000] 82 ITD 626 has deleted addition of • CIT V Sree Meenakshi Mills Rs. 73.5 crores and Ltd 63 ITR 609 made addition of Rs. • CIT V Precision Finance Ltd 1.74 crores @ 2 percen…

Commissioner of Income Tax vs. Shri. Vikram Reddy

In the result, the fifth substantial question of

ITA/291/2013HC Karnataka24 Feb 2021

Bench: ALOK ARADHE,R. NATARAJ

Section 260Section 260A

…such, it was income of the assessee. In support of aforesaid submissions, reliance has been placed on decisions in SUNIL SIDDHARTHBHAI VS. CIT, 156 ITR 509 (SC), WORKMEN OF ASSOCIATED RUBBER INDSUTRY LTD. VS. ASSOCIATED RUBBER INDSUTRY LTD AND ANOTHER, 157 ITR 77 (SC) AND KILLICK NIXON LTD VS. DCIT, (2012) 81 CCH 0066 MUM HC. 8. On the other hand, learned counsel for the assessee submitted that transfer of shares by the assessee in favour of the firm viz., BVRE during the previous year relevant to Assessment Year 2006-07 is accepted by the revenue and is assessed to tax which is not disputed by th…

Hespera Realty P.Ltd, New Delhi vs. DCIT, Circle-11(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 764/DEL/2020[2015-16]Status: DisposedITAT Delhi27 Jul 2020AY 2015-16

Bench: Ms. Suchitra Kambledr. B. R. R. Kumar

For Appellant: Sh. Ajay Vohra, Sr. AdvFor Respondent: Ms. Sunita Singh, CIT DR
Section 115Section 115JSection 94(7)

…es and natures of transactions used by the assessee, and decide upon the character and nature of such devices and transactions." (iii) A similar observation was made in the Supreme Court's decision in the case of Workmen v. Associated Rubber Industry [1986] 157 ITR 77 wherein the Hon'ble Court had observed- "It is true that in law the Associated Rubber Industry Ltd. and its subsidiary were two independent companies with separate legal existence and, therefore, the profits made by the subsidiary could not be treated as profits made by the parent. But in our view that was not an end of the matter. It is the duty…

Adani Agro Pvt. Ltd., Ahmedabad vs. The Dy.CIT., Circle-1, Ahmedabad

In the result, the assessee appeal is thus allowed

ITA 1809/AHD/2012[2009-10]Status: DisposedITAT Ahmedabad20 Sept 2019AY 2009-10

Bench: Shri O. P. Meena& Ms. Madhumita Roy

For Appellant: Shri S. N. Soparkar, Sr. Advocate with Parin ShahFor Respondent: 17.09.2019
Section 115JSection 143(3)Section 14ASection 234BSection 234C

…a colorable device Revenue needs to see it in entirety, as held by the Hon’ble Gujarat high court in the abovementioned case. 11.5 The AO in his order also relied on the judgment of Supreme Court in the case of workmen vs. Associated Rubber Industry limited (157 ITR 77) (SC) and held that facts of the above case are similar to assessee’s case. However, we note that the above decision was in respect to the calculation of bonus payable to workers where an artificial entity was created to divert the income so that bonus liability can be reduced as the bonus was to be calculated at a fixed rate and diverting the inc…

Shri Ramachandran Ananthan Pothi, Mumbai vs. ACIT 24(3), Mumbai

In the result this appeal filed by the assessee stands dismissed

ITA 1088/MUM/2019[2014-15]Status: DisposedITAT Mumbai11 Sept 2019AY 2014-15

Bench: Shri Shamim Yahya (Am) & Shri Ravish Sood (Jm)

Section 10(38)Section 133(6)Section 142(1)Section 143(1)Section 143(2)Section 69C

…is in order: (i) McDowell & Co. Ltd. v. CIT[1985] 154ITR148/22 Taxman 11. (ii) Union of India &Ors. Vs. Playworld Electronics (P) Ltd. & Anr. (1990)184 ITR 308 (SC), (iii) Workmen of Associated Rubber Industry Ltd. v. Associated Rubber Industry Ltd. [1986] 157 ITR 77 (SC), (iv) CIT v. Durga Prasad More (1971) 82 ITR 540 4.1.7 Apart from that in Mid East Port Folio Management Ltd. Vs. CIT (2003) 81 TTJ (Mum)(SB)37, it was held that McDowell is more of an approach to the facts of a particular case than any inviolable rule laid down regarding tax evasion. It is a call to the Courts and Tribunals to expose subte…

Sheetal Infoservices Pvt. Ltd, New Delhi vs. ITO Ward-23(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 4604/DEL/2019[2015-16]Status: DisposedITAT Delhi22 Jul 2019AY 2015-16

Bench: Sh. H. S. Sidhudr. B. R. R. Kumarita No. 4604/Del/2019 : Asstt. Year : 2015-16 Sheetal Infoservices Pvt. Ltd., Vs Income Tax Officer, L-7A(Lgf), South Extension, Ward-23(2), Part-2, New Delhi-110049 New Delhi-110002 (Appellant) (Respondent) Pan No. Aamcs0742A Assessee By : Sh. Raj Kumar Gupta, Ca Revenue By : Sh. S. S. Rana, Cit Dr Date Of Hearing: 04.07.2019 Date Of Pronouncement: 22.07.2019

For Appellant: Sh. Raj Kumar Gupta, CAFor Respondent: Sh. S. S. Rana, CIT DR
Section 131Section 143(3)Section 147Section 150(1)Section 68

…67] 63 ITR 609 " Littlewoods Mail Order Stores [1970] 75 ITR 327 (CA) " Juggilalkamlapat [1969] 73 ITR 702, 710 (SC) " W.T. Ramsay Ltd. Vs. IRC [1981] 2 WLR 449 " McDowell and Co. Ltd. Vs. CTO [1985] 154 ITR 148 " Workmen Vs. Associated Rubber Industry [1986] 157 ITR 77 5 Sheetal Infoservices Pvt. Ltd. 4. The authorities specifically relied on the judgment of the Apex Court in the case of PCIT vs. NRA Iron & Steel (P.) Ltd. [2019] 103 taxmann.com 48 (SC) wherein it was held that, when there was failure of assessee to establish credit worthiness of investor companies, Assessing Officer was justified in passing as…

Ms.Kantaben Bhogilal Kubadia, Mumbai vs. Income Tax Officer-21(2)(1), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 1937/MUM/2018[2014-15]Status: DisposedITAT Mumbai10 Jul 2019AY 2014-15

Bench: Shri G Manjunatha () & Shri Ravish Sood () Ms. Kantaben Bhogilal Vs Ito-21(2)(1), Mumbai Kubadia, 801, Sun Shine Heights, 243, P.L. Kale Marg, Dadar (W), Mumbai-22 Pan : Aadpk8166G Appellant Respondednt

Section 10(38)Section 68

…s in order. (i) McDowell & Co. Ltd. v. CIT [1985] 154 ITR 148/22 Taxman 11. (ii) Union of India & Ors. Vs. Playworld Electronics (P) Ltd. & Anr. (1990) 184 ITR 308 (SC) (iii) Workmen of Associated Rubber Industry Ltd. v. Associated Rubber Industry Ltd. [1986] 157 ITR 77 (SC), (iv) CIT v. Durga Prasad More (1971) 82 ITR 540 7.6 Apart from that in Mid East Port Folio Management Ltd. Vs. CIT (2003) 81 TTJ (Mum)(SB)37, it was held that McDowell is more of an approach to the facts of a particular case than any inviolable rule laid down regarding tax evasion. It is a call to the Courts and Tribunals to expose subterfu…

Aura Securities Pvt. Ltd., Ahmedabad vs. Dy. Commissioner of Income Tax, Ahmedabad

In the result the appeal of the assessee is allowed

ITA 3462/AHD/2014[2008-09]Status: DisposedITAT Ahmedabad28 Jun 2019AY 2008-09

Bench: Shri Mahavir Prasad & Shri Waseem Ahmedआयकर अपील सं./Ita No.834/Ahd/2012 "नधा"रण वष"/Asstt. Year: 2008-2009 Dcit, Aura Securities Pvt. Ltd. Circle-1, V Akhay Building, B/H, Vadilal Ahmedabad. S. House, 53, Shrimali Society, Navrangpura, Ahmedabad-380009 Pan: Aabct4637N आयकर अपील सं./Ita No.986/Ahd/2012 िनधा"रण वष"/Asstt. Year: 2008-2009 Aura Securities Pvt. Ltd. Acit, Akhay Building, B/H, Vadilal Vs. Circle-1, House, 53, Shrimali Society, Ahmedabad. Navrangpura, Ahmedabad-380009 Pan: Aabct4637N

For Appellant: ShriFor Respondent: Shri Mudit Nagpal, S.R. D.R
Section 115JSection 14ASection 234BSection 234CSection 271(1)(c)

…a colorable device Revenue needs to see it in entirety, as held by the Hon’ble Gujarat high court in the abovementioned case. 11.5 The AO in his order also relied on the judgment of Supreme Court in the case of workmen vs. Associated Rubber Industry limited (157 ITR 77) (SC) and held that facts of the above case are similar to assessee’s case. However, we note that the above decision was in respect to the calculation of bonus payable to workers where an artificial entity was created to divert the income so that bonus liability can be reduced as the bonus was to be calculated at a fixed rate and diverting the inc…

Aura Securities Pvt.Ltd., Ahmedabad vs. The ACIT., Circle-1, Ahmedabad

In the result the appeal of the assessee is allowed

ITA 986/AHD/2012[2008-09]Status: DisposedITAT Ahmedabad28 Jun 2019AY 2008-09

Bench: Shri Mahavir Prasad & Shri Waseem Ahmedआयकर अपील सं./Ita No.834/Ahd/2012 "नधा"रण वष"/Asstt. Year: 2008-2009 Dcit, Aura Securities Pvt. Ltd. Circle-1, V Akhay Building, B/H, Vadilal Ahmedabad. S. House, 53, Shrimali Society, Navrangpura, Ahmedabad-380009 Pan: Aabct4637N आयकर अपील सं./Ita No.986/Ahd/2012 िनधा"रण वष"/Asstt. Year: 2008-2009 Aura Securities Pvt. Ltd. Acit, Akhay Building, B/H, Vadilal Vs. Circle-1, House, 53, Shrimali Society, Ahmedabad. Navrangpura, Ahmedabad-380009 Pan: Aabct4637N

For Appellant: ShriFor Respondent: Shri Mudit Nagpal, S.R. D.R
Section 115JSection 14ASection 234BSection 234CSection 271(1)(c)

…a colorable device Revenue needs to see it in entirety, as held by the Hon’ble Gujarat high court in the abovementioned case. 11.5 The AO in his order also relied on the judgment of Supreme Court in the case of workmen vs. Associated Rubber Industry limited (157 ITR 77) (SC) and held that facts of the above case are similar to assessee’s case. However, we note that the above decision was in respect to the calculation of bonus payable to workers where an artificial entity was created to divert the income so that bonus liability can be reduced as the bonus was to be calculated at a fixed rate and diverting the inc…

Prakasho Devi Saria, Siliguri vs. D.C.I.T., Circle - 3(1), Siliguri

Appeal is allowed in above terms

ITA 2360/KOL/2017[2014-15]Status: DisposedITAT Kolkata17 May 2019AY 2014-15

Bench: Hon’Ble Shri J. Sudhakar Reddy, Am & Shri S.S. Godara, Jm] I.T. A No. 2360/Kol/2017 A.Y 2014-15 Prakasho Devi Saria Vs. Cit(A), Siliguri Pan: Agzpd611L (Appellant) (Respondent)

For Appellant: Shri Dhiraj Lakhotia, ld.AR
Section 132Section 132(4)Section 143(3)

…the smoke screen and discover the true state of affairs. The Court is not to be satisfied with form and leave alone the substance of the transaction This view has been upheld by the Hon'ble Supreme Court, in Workman of Associated Rubber Industries Ltd. (1986) 157 ITR 77 (S.C) and in Ess Ess Kay Engg. Co.(P) Ltd. V CIT (1985) 15 ITR 636 (P&H). The Hon'ble Kerala High Court in Onam Agarbati Co. V Dy.CIT (2009) 310 ITR 56 (Ker) has held that though a tax payer may resort to a device to divert the income before it accrues to him, the effectiveness of advice depends upon its genuineness. The substance of the transacti…

Kamal Singh Kundalia, Siliguri vs. I.T.O., Ward - 1(4), Siliguri

Appeal is allowed

ITA 2359/KOL/2017[2014-15]Status: DisposedITAT Kolkata08 May 2019AY 2014-15

Bench: Shri S.S.Godara & Dr. A.L. Sainiassessment Year :2014-15 Kamal Sinigh Kundalia V/S. Income Tax Officer, C/O Pradip Lakhotia, 2Nd Ward-1(4), Aayakar Floor, Metro Plaza, Sf Bhawana, Matigara, Road, Siliguri-734005 Siliguri-734010 [Pan No.Akupk 1029 R] .. अपीलाथ" /Appellant ""यथ"/Respondent Shri Dhiraj Lakhotia, Ar अपीलाथ" क" ओर से/By Appellant Shri Robin Choudhury, Addl-Cit-Dr ""यथ" क" ओर से/By Respondent 07-02-2019 सुनवाई क" तार"ख/Date Of Hearing 08-05-2019 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per S.S.Godara:- This Assessee’S Appeal Arises Against The Commissioner Of Income Tax (Appeals)-Siliguri’S Order Dated 29.08.2017 Passed In Case No.49/Cit(A)/Slg/2016-17, Involving Proceedings U/S 143(3) Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Parties. The Assessee’S Detailed Paper Book Comprising Of Bank Statement (For The Period Of 01.04.2011 To 31.03.2012), Share Certificate In This Taxpayer’S Name Dated 31.12.2011, Allotment Letter Of 15,000 Shares Of Cressanda Solutions After Due Approval Of Hon'Ble Bombay High Court Dated 21.02.2013, Show-Cause Notice, Demat Account With The Broker Firm & Contract Notes Etc.; Stands Perused.

Section 143(3)Section 68

…e smoke screen and discover the true state of affairs. The Court is not to be satisfied with form and leave alone the substance of the transactions. This view has been upheld by the Hon'ble Supreme Court, in Workman of Associated Rubber Industries Ltd. (1986) 157 ITR 77 (SC) and in Ess Ess Kay Engg. Co (p) Ltd. V CIT (1985) 15 ITR 636 (P&H). The Hon'ble Kerala High Court in Onam Agarbati Co. V Dy.cit (2009) 310 ITR 56 (Ker) has held that though a taxpayer may resort to a device to divert the income before it accrues to him, the effectiveness of advice depends upon its genuineness. The substance of the transaction…

DCIT, Circle-10(2), Kolkata vs. M/S Sree Automotive Pvt. Ltd., Kolkata

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

ITA 1392/KOL/2016[2010-11]Status: DisposedITAT Kolkata27 Jul 2018AY 2010-11

Bench: : Shri J. Sudhakar Reddy & Shri S.S.Viswanethra Ravi

For Respondent: Shri Saurabh Kumar, Addl. CIT, Sr.DR

…it was held that a colourable transaction is one which is seemingly valid, but a feigned or counterfeit transaction is entered into for ulterior purpose. In the case of Workmen of Associated Rubber Industries Ltd. vs. Associated Rubber Industries Ltd. (1986) 157 ITR 77 (SC) it has been held that the duty of the court in every case where ingenuity is expended to avoid taxation and welfare legislations, to go behind the smoke screen and discover the true state of affairs. The Court is not to be satisfied with the form and leave alone the substance of a 4 M/s.Sree Automotive Pvt. Ltd transaction. The rationale of…