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“section 40A(2)(b)”

DisallowancesSection 40A(2)(b)Section 40A(2)(b)622 judgments

The decision most relied on for section 40A(2)(b) is CIT v. Dalmia Cement (Bharat) Ltd. (254 ITR 377), cited in 417 judgments on BharatTax.

Leading authorities on section 40A(2)(b)

CIT v. Dalmia Cement (Bharat) Ltd.
254 ITR 377 · 2002 · High Court
417
citing judgments

When there is a nexus between an expenditure and the purpose of business, incurred on grounds of commercial expediency, the Revenue cannot question its reasonableness or assume the role of the businessman to compel profit maximization. This principle applies even if the business is not that of the assessee itself.

CIT v. Winsome Textile Industries Ltd.
319 ITR 204 · 2009 · High Court
378
citing judgments

Section 14A of the Income-tax Act, 1961, which disallows expenditure incurred in relation to exempt income, is not applicable if the assessee has not earned any exempt income in the relevant assessment year.

Biocon Ltd. v. DCIT
35 Taxmann.com 335 · 2013 · ITAT
322
citing judgments

The discount arising from the grant of Employee Stock Option Plans (ESOPs) is an allowable business expenditure under Section 37(1) of the Income-tax Act, 1961, as it is an ascertained liability, not a contingent one, and constitutes a revenue expense rather than a capital expense.

CIT v. Walchand & Co.
65 ITR 381 · 1967 · Supreme Court
314
citing judgments

The necessity and reasonableness of business expenditure, including the utilization of borrowed funds, must be judged from the perspective of a businessman based on commercial expediency, and cannot be dictated by revenue authorities. The onus is on the assessee to demonstrate the business purpose and commercial expediency.

India Cements Ltd. v. CIT
60 ITR 52 · 1966 · Supreme Court
247
citing judgments

Expenses incurred for obtaining a loan for the purpose of the assessee's business, such as debenture discount, bank guarantee charges, and stamp duty, are considered revenue expenditure. These liabilities, though potentially spread over time, are deductible as revenue expenses.

CIT v. Ankitech (P) Ltd.
340 ITR 14 · 2012 · High Court
202
citing judgments

Deemed dividend under section 2(22)(e) cannot be taxed in the hands of a non-shareholder. The Supreme Court confirmed this view, affirming the Delhi High Court's decision in Ankitech.

Challapalli Sugars Ltd. v. CIT
98 ITR 167 · 1975 · Supreme Court
185
citing judgments

Interest on borrowed capital utilized for acquiring a capital asset is capitalized until business commences. Once business is set up, this interest is deductible under section 36(1)(iii) even if the asset has not yet been put to use, accepting commercial accounting standards in the absence of contrary statutory provisions.

DCIT v. Core Health Care Ltd.
298 ITR 194 · 2008 · Supreme Court
165
citing judgments

Interest expenditure incurred for acquiring capital assets, even if capitalized in the books, is deductible if for the purpose of business. Section 36(1)(iii) is a self-contained code regarding such deductions.

Judgments citing section 40A(2)(b)

Kendrapara Urban Co-Operative Bank Ltd., Kendrapada vs. Pr.Commissioner of Income Tax, Cuttack

In the result, appeal of the assessee stands allowed

ITA 163/CTK/2020[2015-16]Status: HeardITAT Cuttack30 Jan 2023AY 2015-16

Bench: Shri George Mathan & Shri Arun Khodpiaआयकर अऩीऱ सं/Ita No.163/Ctk/2020 (ननधाारण वषा / Assessment Year :2015-2016) Kendrapara Urban Co-Operative Vs Pr.Cit, Cuttack Bank Ltd., College Square, Tinimuhani, Kendrapara-754211 Pan No. :Aaatk 8347 E (अऩीऱाथी /Appellant) .. (प्रत्यथी / Respondent) ननधााररती की ओर से /Assessee By : Shri P.C.Sethi, Advocate राजस्व की ओर से /Revenue By : Shri M.K.Gautam, Cit-Dr सुनवाई की तारीख / Date Of Hearing : 30/01/2023 घोषणा की तारीख/Date Of Pronouncement : 30/01/2023 आदेश / O R D E R Per Bench : This Is An Appeal Filed By The Assessee Against The Order Of The Ld Pr.Cit, Cuttack, Dated 24.03.2020, Passed In Din & Order No.Itba/Com/F/17/2019-20/1026884702(1) For The Assessment Year 2015-2016. 2. The Appeal Of The Assessee Is Barred By 8 Days. The Assessee Through Its Secretary Has Filed An Application Dated 13.07.2020 Stating Therein Sufficient Reasons For Condonation Of Delay, To Which Ld. Cit-Dr Did Not Object. In View Of The Above, Delay Of 8 Days In Filing The Present Appeal Is Condoned & The Appeal Of The Assessee Is Heard Finally. 3. It Was Submitted By The Ld. Ar That The Original Assessment In The Case Of The Assessee Was Completed U/S.143(3) Of The Act On 20.11.2017. It Was The Submission That The Assessment Was A Limited Scrutiny

For Appellant: Shri P.C.Sethi, AdvocateFor Respondent: Shri M.K.Gautam, CIT-DR
Section 143(3)Section 14ASection 263Section 36(1)(viia)Section 40

आयकर अऩीऱीय अधधकरण, कटक न्यायऩीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK श्री जाजज माथन, न्याययक सदस्य

Grameen Impact Investment India Pvt Ltd, Mumbai vs. National -E Assessment Centre, Delhi

In the result, all the three appeals of the assessee are allowed

ITA 2375/MUM/2022[2018-19]Status: DisposedITAT Mumbai29 Dec 2022AY 2018-19

Bench: Shri Aby T Varkey () & Shri Om Prakash Kant () Assessment Year: 2018-19 Grameen Impact Investments India National-E-Assessment Pvt. Ltd., Centre, 306, 3Rd Floor, A Wing, Devroop Vs. New Delhi-110 001. Building, 36, Turner Road, Bandra West, Mumbai-400050. Pan No. Aaacr 9005 R Appellant Respondent Assessee By : Mr. K. Shivaram & Mr. Shashi Bekal, Ars : Revenue By Mr. Satyapal Kumar, Dr Date Of Hearing : 19/12/2022 Assessment Year: 2015-16 & Assessment Year: 2016-17 Grameen Impact Investments India Dy. Cit-13(3)(1), Pvt. Ltd., Room No. 229, Aayakar 306, 3Rd Floor, A Wing, Devroop Vs. Bhavan, M.K. Road, Building, 36, Turner Road, Bandra Mumbai-400050. West, Mumbai-400050. Pan No. Aaacr 9005 R Appellant Respondent

For Appellant: Mr. K. Shivaram & Mr. Shashi
Section 56

bought by Grameen Capital India Limited from IFMR being bought by Grameen Capital India Limited from IFMR Capital. 3. Disallowan 3. Disallowance under section 40A(2)(b) of the Act of ce under section 40A(2)(b) of the Act of the Act That on the facts and circumstances ... addition under law, the NFAC has erred in confirming the addition under law, the NFAC has erred in confirming the addition under section 40A(2)(b) of the Act of the Act to the tune of Rs. section 40A(2)(b) of the Act of the Act to the tune