← All Phrases

“business expediency”

Business ExpensesSection 37Section 37849 judgments

The decision most relied on for business expediency is S.A. Builders Ltd. v. CIT (288 ITR 1), cited in 1,484 judgments on BharatTax.

Leading authorities on business expediency

S.A. Builders Ltd. v. CIT
288 ITR 1 · 2007 · Supreme Court
1,484
citing judgments

Interest paid on borrowed funds cannot be disallowed merely because the assessee made interest-free advances, provided those advances were made for business purposes and commercial expediency. The Revenue cannot dictate a businessman's commercial decisions, but the assessee bears the onus to prove the business expediency.

Empire Jute Co. Ltd. v. CIT
124 ITR 1 · 1980 · Supreme Court
622
citing judgments

Expenditure is classified as revenue or capital based on its practical business effect, necessity, or expediency, rather than solely on the juristic classification of rights; an enduring benefit does not automatically make an expenditure capital if it facilitates trading operations or business efficiency.

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.

Hero Cycles Pvt. Ltd. v. CIT
379 ITR 347 · 2015 · Supreme Court
361
citing judgments

The Revenue cannot substitute its judgment for that of a businessman regarding the necessity or reasonableness of an expenditure. If an expense is incurred wholly and exclusively for business purposes, it is deductible, and the Revenue cannot question its commercial expediency.

CIT v. Abhishek Industries Ltd.
286 ITR 1 · 2006 · High Court
359
citing judgments

For interest on borrowed capital to be deductible under Section 36(1)(iii), there must be a nexus between the use of the borrowed funds and the purpose of the business. This decision has been overruled by the Supreme Court in Munjal Sales Corporation v. CIT (2008).

Eastern Investments Ltd. v. CIT
38 ITR 601 · 1960 · Supreme Court
346
citing judgments

Expenditure must be commercially expedient for carrying on the business, and it is not for revenue authorities to dictate how an assessee should conduct its business. The court will not question the business expediency of a transaction, even if a third party also benefits.

Sassoon J. David & Co. Pvt. Ltd. v. CIT
118 ITR 261 · 1979 · Supreme Court
323
citing judgments

An expense incurred by an assessee for its own business, such as advertising, marketing, and promotional (AMP) expenses, cannot be disallowed merely because it incidentally or indirectly benefits the assessee's sister concerns or associated enterprises.

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.

Judgments citing business expediency

DCIT Central Circle Gzbd, Hapur vs. Mirha Exports Private Ltd., Delhi

In the result, both appeals of the assessee are allowed and both appeals of the Revenue are dismissed

ITA 1233/DEL/2022[2013-14]Status: DisposedITAT Delhi19 Dec 2025AY 2013-14

Bench: Shri Sudhir Kumar & Shri Manish Agarwalsl. Ita No(S) Asst. Appeal(S) By No Year(S) Appellant Vs. Respondent Appellant Respondent 1. 873/Del/2022 2012-13 Dcit M/S. Mirha Exports Pvt.Ltd. (Revenue’S Appeal) Central Circle 30, Bazar Lane, Bengali Ghaziabad Market, Central Delhi-110001 Pan-Aaacm8612P 2. 655/Del/2022 2012-13 M/S. Mirha Exports Dcit (Assessee’S Appeal) Pvt.Ltd. Central Circle 30, Bazar Lane, Ghaziabad Bengali Market, Central Delhi-110001 Pan-Aaacm8612P 3. 1233/Del/2022 2013-14 Dcit M/S. Mirha Exports Pvt. Ltd. (Revenue’S Appeal) Central Circle 30, Bazar Lane, Bengali Ghaziabad Market, Central Delhi-110001 Pan-Aaacm8612P 4. 656/Del/2022 2013-14 M/S. Mirha Exports Dcit (Assessee’S Appeal) Pvt. Ltd. Central Circle Ghaziabad 30, Bazar Lane, Bengali Market, Central Delhi-110001 Pan-Aaacm8612P 5. 1234/Del/2022 2015-16 Dcit M/S. Mirha Exports Pvt. Ltd. (Revenue’S Appeal) Central Circle 30, Bazar Lane, Bengali Ghaziabad Market, Central Delhi-110001 Pan-Aaacm8612P 6. 657/Del/2022 2015-16 M/S. Mirha Exports Dcit Pvt. Ltd. (Assessee’S Appeal) Central Circle 30, Bazar Lane, Ghaziabad Bengali Market, Central Delhi-110001 Pan-Aaacm8612P M/S. Mirha Exports Pvt. Ltd. 7. 874/Del/2022 2016-17 Dcit (Revenue’S Appeal) Central Circle 30, Bazar Lane, Bengali Ghaziabad Market, Central Delhi-110001 Pan-Aaacm8612P 8. 658/Del/2022 2016-17 M/S. Mirha Exports Dcit Pvt. Ltd. (Assessee’S Appeal) Central Circle Ghaziabad 30, Bazar Lane, Bengali Market, Central Delhi-110001 Pan-Aaacm8612P M/S. Mirha Exports Pvt. Ltd. 9. 875/Del/2022 2017-18 Dcit (Revenue’S Appeal) Central Circle 30, Bazar Lane, Bengali Ghaziabad Market, Central Delhi-110001 Pan-Aaacm8612P

Section 133ASection 142Section 143(3)Section 148Section 153CSection 250

without considering the to the earlier disallowance tantamount to double addition. The Assessing ITA No.873 & 655/Del/2022 & Others Officer is not competent to decide the business expediency of incurring any expenditure. It is relevant to note that we are dealing with a case of a private limited company

Instakart Services Private Limited, Bangalore vs. ACIT, Special Range-3, Bangalore

In the result appeal of the Revenue is hereby dismissed

ITA 544/BANG/2025[2017-18]Status: DisposedITAT Bangalore18 Dec 2025AY 2017-18

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Ajay Vohra, Sr. Advocate and Ms. AnkitaFor Respondent: Shri Shivanad Kalakeri, CIT

were incurred wholly and exclusively for the purpose of its own business and are allowable. It is a settled principles that the test of business expediency must be judged from the viewpoint of the businessman, and not from the Revenue. Even if an expense does not result in immediate profit ... bear the difference in cost of the shares. The expenditure is necessary for the Assessee to retain a health work force. Business expediency required that the Assessee incur such costs. The parent company will be benefitted indirectly by such a motivated work force. This will be no ground to deny

Instakart Services Private Limited, Bangalore vs. JCIT, Special Rang-3, Bangalore

In the result appeal of the Revenue is hereby dismissed

ITA 543/BANG/2025[2016-17]Status: DisposedITAT Bangalore18 Dec 2025AY 2016-17

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Ajay Voh

were incurred wholly and exclusively for the purpose of its own business and are allowable. It is a settled principles that the test of business expediency must be judged from the viewpoint of the businessman, and not from the Revenue. Even if an expense does not result in immediate profit ... bear the difference in cost of the shares. The expenditure is necessary for the Assessee to retain a health work force. Business expediency required that the Assessee incur such costs. The parent company will be benefitted indirectly by such a motivated work force. This will be no ground to deny

DCIT CC -1(4), Bengaluru vs. Instakart Services Pvt Ltd, Bengaluru

In the result appeal of the Revenue is hereby dismissed

ITA 531/BANG/2025[2018-19]Status: DisposedITAT Bangalore18 Dec 2025AY 2018-19

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Ajay Voh

were incurred wholly and exclusively for the purpose of its own business and are allowable. It is a settled principles that the test of business expediency must be judged from the viewpoint of the businessman, and not from the Revenue. Even if an expense does not result in immediate profit ... bear the difference in cost of the shares. The expenditure is necessary for the Assessee to retain a health work force. Business expediency required that the Assessee incur such costs. The parent company will be benefitted indirectly by such a motivated work force. This will be no ground to deny

DCIT, CC-1(4), Bengaluru vs. Instakart Services Pvt Ltd, Bengaluru

In the result appeal of the Revenue is hereby dismissed

ITA 530/BANG/2025[2017-18]Status: DisposedITAT Bangalore18 Dec 2025AY 2017-18

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Ajay Voh

were incurred wholly and exclusively for the purpose of its own business and are allowable. It is a settled principles that the test of business expediency must be judged from the viewpoint of the businessman, and not from the Revenue. Even if an expense does not result in immediate profit ... bear the difference in cost of the shares. The expenditure is necessary for the Assessee to retain a health work force. Business expediency required that the Assessee incur such costs. The parent company will be benefitted indirectly by such a motivated work force. This will be no ground to deny

Instakart Services Private Limited, Bengaluru vs. ACIT, Central Circle-1(4), Bengaluru

In the result appeal of the Revenue is hereby dismissed

ITA 496/BANG/2025[2018-19]Status: DisposedITAT Bangalore18 Dec 2025AY 2018-19

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Ajay Voh

were incurred wholly and exclusively for the purpose of its own business and are allowable. It is a settled principles that the test of business expediency must be judged from the viewpoint of the businessman, and not from the Revenue. Even if an expense does not result in immediate profit ... bear the difference in cost of the shares. The expenditure is necessary for the Assessee to retain a health work force. Business expediency required that the Assessee incur such costs. The parent company will be benefitted indirectly by such a motivated work force. This will be no ground to deny

Neelkanth Realtors Limited, Mumbai vs. Income Tax Officer, Ward 3(2)(3), Mumbai

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 5206/MUM/2025[2017-2018]Status: DisposedITAT Mumbai17 Dec 2025AY 2017-2018

Bench: Justice (Retd.) Shri C.V. Bhadang & Shri Vikram Singh Yadavassessment Year : 2017-18 Neelkanth Realtors Limited, Income Tax Officer, 508, Dalamal House, Ward-3(2)(3), J.B. Marg, Vs. Maharshi Karve Road, Nariman Point, New Marinelines, Mumbai-400021. Mumbai-400020. Pan : Aaaca9796N (Appellant) (Respondent) For Assessee : Shri Pratik A. Mehta For Revenue : Shri Brajendra Kumar, Sr.Dr Date Of Hearing : 03-12-2025 Date Of Pronouncement : 17-12-2025 O R D E R Per Vikram Singh Yadav, A.M : This Is An Appeal Filed By The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals)-National Faceless Appeal Centre (Nfac), Delhi [„Ld.Cit(A)‟], Dated 31-07-2025, Pertaining To Assessment Year (Ay) 2017-18. 2. Briefly Stated, Facts Of The Case Are That The Assessee Filed Its Return Of Income Declaring Total Income Of Rs. 10,71,080/-, Which Was Selected For Scrutiny & Notices U/S. 143(2) & 142(1) Of The Income Tax Act, 1961 („The Act‟) Were Issued. In Response, The Assessee Filed Its Submissions From Time To Time, Thereafter The Assessment Order Was Passed By The Ao

For Appellant: Shri Pratik A. MehtaFor Respondent: Shri Brajendra Kumar, Sr.DR
Section 143(2)Section 143(3)Section 14A

assessee did not have enough reserves and surplus to give interest free loans and advances to related parties and others, without business expediency and, therefore, the AO held that proportionate interest to the extent of Rs. 4,88,04,026/- is not an allowable expenditure and the same was required

ACIT, Mumbai vs. Reliance Power Ltd, Mumbai

ITA 3989/MUM/2025[2016-17]Status: DisposedITAT Mumbai17 Dec 2025AY 2016-17

Bench: Shri Amit Shukla, Jm & Shri Arun Khodpia, Am Acit-15(3)(1), Aayakar Bhavan, Room No. 460, 4Th Floor, M.K. Road, Mumbai-400020. Vs. Revenue-अपीलार्थी / Appellant Assessee By Revenue By Date Of Hearing Date Of Pronouncement

Section 115JSection 14Section 143(3)Section 14ASection 37(1)

same line of business, i.e. power generation only. The appellant has submitted that such investments were strategic in nature and made on account of business expediency to wrest control over the companies. In this regard, the appellant has relied upon the concept of “commercial expediency” used by Hon'ble Supreme

Kasturi Medical Centre Private Limited, Joka, Thakurpukur vs. Additional/Joint/Deputy/Assisstant Commissioner of Income Tax/Income-Tax Officer, Delhi

In the result the appeal of the assessee is allowed

ITA 318/KOL/2025[2018-19]Status: DisposedITAT Kolkata12 Dec 2025AY 2018-19

Bench: Shri Manunatha G & Shri Sonjoy Sarmai.T.A. No.318/Kol/2025 Assessment Year: 2018-19 Kasturi Medical Centre Pvt. Ltd……………….................................……….…Appellant 5, Diamond Harbour Road, 3A Bus Stand, Joka, Thakurpukur, W.B – 700104. [Pan: Aacck1872F] Vs. Acit, Nfac, Delhi…….…………..…………….…..….......……..…...…..…..Respondent Appearances By: Shri Indernil Banerjee, Fca, Appeared On Behalf Of The Revenue. Shri Soumitra Ghosh, Sr. Dr, Appeared On Behalf Of The Assessee. Date Of Concluding The Hearing : September 16, 2025 Date Of Pronouncing The Order : December 12, 2025 Order Per Sonjoy Sarma: This Appeal Is Filed By The Assessee Against The Order Of The Learned Cit(A) Passed For The Assessment Year 2018–19, Whereby The Addition Of ₹85,40,911 Made By The Assessing Officer On Estimated Basis After Rejection Of Books Of Account Under Section 145(3) Of The Income-Tax Act, 1961 Was Confirmed. 2. Brief Facts Of The Case Are That The Assessee Filed Its Return Of Income For Ay 2018–19 Declaring Total Income Of ₹2,05,59,220. The Case Was Selected For Complete Scrutiny Under The Scrutiny Assessment Scheme, 2019, Primarily On The Issue Of Large Refund Claimed Out Of Advance Tax. Accordingly, Notices Under Section 143(2) & Section 142(1) Of The Act Along With Questionnaires Were Duly Issued & Served.

Section 142(1)Section 143(2)Section 145(3)

increase in turnover from approximately ₹13.17 crores to ₹14.39 crores. The Assessing Officer substituted his own commercial judgment, which is impermissible in law. Once business expediency and genuineness are established, the Department cannot question the wisdom of the expenditure. The AR relied on settled principles that commercial expediency

Bharti Telemedia Limited, New Delhi vs. DCIT, Circle-4(2), New Delhi

In the result, the appeals of the Assessee are allowed and appeals of the Revenue are dismissed

ITA 624/DEL/2024[2021-22]Status: DisposedITAT Delhi12 Dec 2025AY 2021-22

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 35ASection 4

section 37 of the Act, but, which was not ultimately done shows that as with regard to relationship of this expenditure with the business expediency of the assessee is not disputed. PCIT should have been cognizant of the fact that since there was a dispute between the assessee

DCIT, Circle 4(2), New Delhi vs. M/S Bharti Telemedia Ltd, New Delhi

In the result, the appeals of the Assessee are allowed and appeals of the Revenue are dismissed

ITA 4966/DEL/2024[2020-21]Status: DisposedITAT Delhi12 Dec 2025AY 2020-21

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 35ASection 4

section 37 of the Act, but, which was not ultimately done shows that as with regard to relationship of this expenditure with the business expediency of the assessee is not disputed. PCIT should have been cognizant of the fact that since there was a dispute between the assessee

Bharti Telemedia Limited, New Delhi vs. DCIT, Circle-4(2), New Delhi

In the result, the appeals of the Assessee are allowed and appeals of the Revenue are dismissed

ITA 4960/DEL/2024[2020-21]Status: DisposedITAT Delhi12 Dec 2025AY 2020-21

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 35ASection 4

section 37 of the Act, but, which was not ultimately done shows that as with regard to relationship of this expenditure with the business expediency of the assessee is not disputed. PCIT should have been cognizant of the fact that since there was a dispute between the assessee

DCIT, Circle 4(2), New Delhi vs. Ms Bharti Telemedia Ltd, New Delhi

In the result, the appeals of the Assessee are allowed and appeals of the Revenue are dismissed

ITA 4868/DEL/2024[2016-17]Status: DisposedITAT Delhi12 Dec 2025AY 2016-17

Bench: Shri C.N. Prasad & Shri M. Balaganesh

Section 35ASection 4

section 37 of the Act, but, which was not ultimately done shows that as with regard to relationship of this expenditure with the business expediency of the assessee is not disputed. PCIT should have been cognizant of the fact that since there was a dispute between the assessee

Vodafone West Limited, (Formerly Known As Vodafone Essar Gujarat Limited), Ahmedabad vs. The Dy.CIT, Circle-4(1)(2), Ahmedabad

In the result, the appeal by the Revenue is partly allowed for statistical

ITA 671/AHD/2015[2010-11]Status: DisposedITAT Mumbai11 Dec 2025AY 2010-11

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhail

For Appellant: Shri K.K. VedFor Respondent: Shri Pankaj Kumar, CIT-DR
Section 142Section 143(2)Section 143(3)Section 144CSection 144C(5)Section 45Section 47Section 48Section 50D

that the assessee transferred Pl assets to Vinfl in order to evade taxes but the aforesaid transfer of Pl assets was driven solely by business expediency. On careful consideration of the facts of the case, it is amply clear that the business purpose and commercial expediency were the only factors

The Dy CIT, Circle-4(1)(2), Ahmedabad vs. Vodafone West Limited, Ahmedabad

In the result, the appeal by the Revenue is partly allowed for statistical

ITA 1634/AHD/2015[2010-11]Status: DisposedITAT Mumbai11 Dec 2025AY 2010-11

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhail

For Appellant: Shri K.K. VedFor Respondent: Shri Pankaj Kumar, CIT-DR
Section 142Section 143(2)Section 143(3)Section 144CSection 144C(5)Section 45Section 47Section 48Section 50D

that the assessee transferred Pl assets to Vinfl in order to evade taxes but the aforesaid transfer of Pl assets was driven solely by business expediency. On careful consideration of the facts of the case, it is amply clear that the business purpose and commercial expediency were the only factors

Jasper Industries Pvt Ltd, Hyderabad vs. DCIT., Circle-2(1), Hyderabad

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

ITA 1357/HYD/2025[2015-16]Status: DisposedITAT Hyderabad10 Dec 2025AY 2015-16

Bench: SHRI VIJAY PAL RAO, HON’BLE (Vice President), SHRI MANJUNATHA G, HON’BLE (Accountant Member)

Section 10(34)Section 10(38)Section 14ASection 14A(2)Section 36(1)(iii)

under Section 14A of the Income-tax Act, 1961, without appreciating the factual matrix that the investments were made purely for commercial and strategic business expediency and not for earning exempt income. Ground No. 2 The learned CIT(A) failed to appreciate that the appellant has not diverted any interest ... principle established by the Hon’ble ITAT, Hyderabad in AY 2016–17 in ITA Nos. 781/Hyd/2020 & 6/Hyd/2021, where the issue of investment for business expediency and non-diversion of borrowed funds was adjudicated in favour of the appellant. The principle of consistency and judicial discipline requires the same view

Dharmendra Sharma, Gwalior vs. Jurisdictional Assessing Officer, Gwalior

In the result, the appeal of the Assessee as well as the revenue are allowed for statistical purposes

ITA 232/AGR/2025[2022-23]Status: DisposedITAT Agra04 Dec 2025AY 2022-23

Bench: Shri M. Balaganesh & Shri Sunil Kumar Singh (Through Virtual Hearing) Dharmendra Sharma, Vs. Jurisdictional Assessing In Front Of Narcotics Officer, Office, Ramkala Nagar, Ward-2(1), Morar, Gwalior Gwalior (Appellant) (Respondent) Pan: Fejps7901J Jurisdictional Assessing Vs. Dharmendra Sharma, Officer, In Front Of Narcotics Office, Ward-2(1), Gwalior Ramkala Nagar, Morar, Gwalior (Appellant) (Respondent) Pan: Fejps7901J

For Appellant: Shri Mahesh Agarwal, CAFor Respondent: Shri Sukesh Kumar Jain, CIT (DR)
Section 143(3)Section 206CSection 44A

through tenders obtained Dharmendra Sharma license for leasing of mines from mining officer Gwalior. Due to financial, technical and infrastructural constraints in the business expediency, the above mining rights were leased to various parties who have crusher units and the royalty on the extraction of mining is paid

Income Tax Officer-2(1), Gwalior vs. Dharmendra Sharma, Gwalior

In the result, the appeal of the Assessee as well as the revenue are allowed for statistical purposes

ITA 210/AGR/2025[2022-23]Status: DisposedITAT Agra04 Dec 2025AY 2022-23

Bench: Shri M. Balaganesh & Shri Sunil Kumar Singh (Through Virtual Hearing) Dharmendra Sharma, Vs. Jurisdictional Assessing In Front Of Narcotics Officer, Office, Ramkala Nagar, Ward-2(1), Morar, Gwalior Gwalior (Appellant) (Respondent) Pan: Fejps7901J Jurisdictional Assessing Vs. Dharmendra Sharma, Officer, In Front Of Narcotics Office, Ward-2(1), Gwalior Ramkala Nagar, Morar, Gwalior (Appellant) (Respondent) Pan: Fejps7901J

For Appellant: Shri Mahesh Agarwal, CAFor Respondent: Shri Sukesh Kumar Jain, CIT (DR)
Section 143(3)Section 206CSection 44A

through tenders obtained Dharmendra Sharma license for leasing of mines from mining officer Gwalior. Due to financial, technical and infrastructural constraints in the business expediency, the above mining rights were leased to various parties who have crusher units and the royalty on the extraction of mining is paid

Deputy Commissioner of Income Tax, Bengaluru vs. Flipkart India Pvt Ltd, Bengaluru

In the result, both the appeals filed by the Revenue are dismissed

ITA 1395/BANG/2025[2021-22]Status: DisposedITAT Bangalore04 Dec 2025AY 2021-22

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Shri Shivanand Kalakeri, CIT(DR)(ITAT), BengaluruFor Respondent: Shri Ajay Vohra, Sr. Advocate
Section 143(3)Section 37

bear the difference in cost of the shares. The expenditure is necessary for the Assessee to retain a health work force. Business expediency required that the Assessee incur such costs. The parent company will be benefitted indirectly by such a motivated work force. This will be no ground to deny

Deputy Commissioner of Income Tax, Central Circle-1(4), Bengaluru vs. Flipkart India Pvt Ltd, Bengaluru

In the result, both the appeals filed by the Revenue are dismissed

ITA 1394/BANG/2025[2020-21]Status: DisposedITAT Bangalore04 Dec 2025AY 2020-21

Bench: Shri Prashant Maharishi & Shri Keshav Dubey

For Appellant: Shri Shivanand Kalakeri, CIT(DR)(ITAT), BengaluruFor Respondent: Shri Ajay Vohra, Sr. Advocate
Section 143(3)Section 37

bear the difference in cost of the shares. The expenditure is necessary for the Assessee to retain a health work force. Business expediency required that the Assessee incur such costs. The parent company will be benefitted indirectly by such a motivated work force. This will be no ground to deny