“profits and gains of business or profession”

Income HeadsSection 28Section 281,710 judgments

The decision most relied on for profits and gains of business or profession is CIT v. Excel Industries Ltd. (358 ITR 295), cited in 935 judgments on BharatTax.

Leading authorities on profits and gains of business or profession

CIT v. Excel Industries Ltd.

358 ITR 295 · 2013 · Supreme Court

935

citing judgments

When an income or expenditure is revenue neutral across different assessment years, where any benefit derived is offset by a corresponding liability or reversal, no additional tax liability arises, particularly concerning income recognition under the mercantile system of accounting.

Southern Technologies Ltd. v. JCIT

320 ITR 577 · 2010 · Supreme Court

353

citing judgments

The case concerns the allowability of deductions for provisions made under Section 36 of the Income Tax Act, 1961, especially those related to bad and doubtful debts. It distinguishes such deductions from the recognition of interest income on non-performing assets (NPAs).

Attar Singh Gurmukh Singh v. ITO

191 ITR 667 · 1991 · Supreme Court

254

citing judgments

Section 40A(3) is not absolute, and its application considers business expediency, practical difficulties, and other relevant factors, while keeping in mind its objective to curb the practice of ploughing unaccounted money into the system.

Karanpura Development Co. Ltd. v. CIT

44 ITR 362 · 1962 · Supreme Court

157

citing judgments

The income derived from letting out assets, such as coal mining leases, constitutes "profits and gains of business or profession" if the primary object and activity of the assessee company are to acquire, develop, and sub-lease such assets. This classification holds even if the income arises from letting, provided the letting itself constitutes the assessee's business.

(P.) Ltd. v. CIT

56 ITR 52 · 1965 · Supreme Court

146

citing judgments

Expenditure is revenue if incurred for operating a business to earn profit, even if an incidental enduring advantage results; it is capital if it creates an asset or an enduring advantage for the entire business structure.

Anupam Tele Services v. ITO

366 ITR 122 · 2014 · High Court

124

citing judgments

Section 40A(3) disallowances are not absolute; genuine and bonafide cash payments, where the payee's identity is established and business expediency is proven, fall outside its scope, as the section's purpose is to curb unaccounted money, not disallow genuine expenditure.

ACG Associated Capsule Private Limited v. Commissioner of Income Tax, Central IV, Mumbai

3 SCC 321 · 2022 · Reported

citing judgments

Profits of a business are computed under the head 'Profits and Gains of Business or Profession' and then reduced by specific receipts mentioned in Explanation (baa) to Section 80HHC. This means that for the purposes of Section 80HHC, only profits computed under the business head are considered, with subsequent adjustments for specified receipts.

Rayala Corporation Pvt. Ltd. v. ACIT

386 ITR 500 · 2016 · Supreme Court

citing judgments

If an assessee company's main business object is to acquire and rent out properties, the rental income derived is taxable as 'Profits and gains of business or profession', rather than 'Income from house property', as the nature of the activity constitutes a business.

Judgments citing profits and gains of business or profession

Joint Commissioner of Income -Tax, Special Range - 6, Bangalore vs. M/S. Samsung R & D Institute India-Bangalore Private Limited, Bangalore

In the result, the appeals filed by the assessee as per revised grounds stands allowed and the appeals filed by the revenue stands dismissed for the years under consideration

ITA 978/BANG/2019[2014-15]Status: DisposedITAT Bangalore30 May 2024AY 2014-15

Bench: Smt Beena Pillai & Shri Waseem Ahmed

For Appellant: Smt. Tanmayee RajkumarFor Respondent: Shri D.K. Mishra, CIT-DR

Section 234ASection 234BSection 234CSection 32Section 40

contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession",— (a) in the case of any assessee— [(i) any interest (not being interest on a loan issued for public subscription before ... under sub-section (1) of section 200 shall not be allowed as deduction while computing the income chargeable under the head “Profit and gains of business or profession”. 13.1 There is a difference between the expenditure and other kind of deduction. The other kind of deduction which includes any loss

Joint Commissioner of Income-Tax, Special Range-6, Bangalore vs. M/S. Samsung R & D Institute India-Bangalore Private Limited, Bangalore

In the result, the appeals filed by the assessee as per revised grounds stands allowed and the appeals filed by the revenue stands dismissed for the years under consideration

ITA 958/BANG/2019[2011-12]Status: DisposedITAT Bangalore30 May 2024AY 2011-12

Bench: Smt Beena Pillai & Shri Waseem Ahmed

For Appellant: Smt. Tanmayee RajkumarFor Respondent: Shri D.K. Mishra, CIT-DR

Section 234ASection 234BSection 234CSection 32Section 40

M/S Samsung R & D Institute India Bangalore Private Limited, Bangalore vs. Joint Commissioner of Income Tax Circle-6(1)(1), Bangalore

ITA 484/BANG/2019[2014-15]Status: DisposedITAT Bangalore30 May 2024AY 2014-15

Bench: Smt Beena Pillai & Shri Waseem Ahmedappeal No. Appellant Respondent Assessment Year

For Appellant: Smt. Tanmayee RajkumarFor Respondent: Shri D.K. Mishra, CIT-DR

Section 234ASection 234BSection 234CSection 32Section 40

ITA/IT(TP)A Nos. 1008, 1092, 1166, 484, 958, 1045, 1046 & 978/Bang/2019 IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH

M/S. Samsung R & D Institute India Bangalore Private Limited, Bangalore vs. Deputy Commissioner of Income- Tax, Circle - 6(1)(1), Bangalore

In the result, the appeals filed by the assessee as per revised grounds stands allowed and the appeals filed by the revenue stands dismissed for the years under consideration

ITA 1166/BANG/2019[2013-14]Status: DisposedITAT Bangalore30 May 2024AY 2013-14

Bench: Smt Beena Pillai & Shri Waseem Ahmed

For Appellant: Smt. Tanmayee RajkumarFor Respondent: Shri D.K. Mishra, CIT-DR

Section 234ASection 234BSection 234CSection 32Section 40

M/S. Samsung R & D Institute India Bangalore Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 6(1)(1), Bangalore

In the result, the appeals filed by the assessee as per revised grounds stands allowed and the appeals filed by the revenue stands dismissed for the years under consideration

ITA 1092/BANG/2019[2012-13]Status: DisposedITAT Bangalore30 May 2024AY 2012-13

Bench: Smt Beena Pillai & Shri Waseem Ahmed

For Appellant: Smt. Tanmayee RajkumarFor Respondent: Shri D.K. Mishra, CIT-DR

Section 234ASection 234BSection 234CSection 32Section 40

Joint Commissioner of Income Tax, Special Range - 6, Bangalore vs. M/S. Samsung R &D Institute India- Bangalore Private Limited, Bangalore

In the result, the appeals filed by the assessee as per revised grounds stands allowed and the appeals filed by the revenue stands dismissed for the years under consideration

ITA 1046/BANG/2019[2013-14]Status: DisposedITAT Bangalore30 May 2024AY 2013-14

Bench: Smt Beena Pillai & Shri Waseem Ahmed

For Appellant: Smt. Tanmayee RajkumarFor Respondent: Shri D.K. Mishra, CIT-DR

Section 234ASection 234BSection 234CSection 32Section 40

Joint Commissioner of Income Tax, Special Range - 6, Bangalore vs. M/S. Samsung R & D Institute India -Bangalore Private Limited, Bangalore

ITA 1045/BANG/2019[2012-13]Status: DisposedITAT Bangalore30 May 2024AY 2012-13

Bench: Smt Beena Pillai & Shri Waseem Ahmedappeal No. Appellant Respondent Assessment Year

For Appellant: Smt. Tanmayee RajkumarFor Respondent: Shri D.K. Mishra, CIT-DR

Section 234ASection 234BSection 234CSection 32Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH : BANGALORE BEFORE SMT BEENA PILLAI, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT

Sundri Chimandas, Chennai vs. Deputy Commissioner of Income Tax Central Circle 3 (4), Chennai

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

ITA 969/CHNY/2023[2020-21]Status: DisposedITAT Chennai29 May 2024AY 2020-21

Bench: Shri Mahavir Singh, Hon’Ble & Shri S. R. Ragunatha, Hon’Bleआयकर अपील सं./Ita No.: 969/Chny/2023 िनधा"रण वष" / Assessment Year: 2020-21 Sundri Chimandas Deputy Commissioner Of 49, Old No. 27, T. Mangharam, V. Income Tax, Rattan Bazaar, Central Circle -3(4), Chennai – 600 003. Chennai. [Pan: Aabpc-1797-K] (अपीलाथ"/Appellant) (""यथ"/Respondent) : Shri. S. Sridhar, Advocate अपीलाथ" क" ओर से/Appellant By ""यथ" क" ओर से/Respondent By : Shri. D. Hema Bhupal, Jcit सुनवाई क" तारीख/Date Of Hearing : 24.04.2024 घोषणा क" तारीख/Date Of Pronouncement : 29.05.2024

For Respondent: Shri. D. Hema Bhupal, JCIT

Section 115BSection 133ASection 143(3)Section 69B

business income, the AO ought to have accepted the explanation of the assessee and assessed the income under the head profits and gains of business or profession, but not under the head :-8-: ITA. No: 969/Chny/2023 unexplained investment u/s. 69B of the Act. This is because, excess stock found during

K K Infrabuild, Vadodara vs. Income Tax Officer, Ward 1(2)(1), Vadodara

In the result, the appeal of the assessee is treated as partly allowed for statistical purposes

ITA 507/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad28 May 2024AY 2017-18

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar, Accountnat Member Assessment Year : 2017-18 K.K. Infrabuild The Income Tax Officer 702, Gunjan Tower Vs Ward-1(2)(1) Opp. Synergy House Vadodara Subhanpura, Gorwa Vadodra – 390 023 Gujarat Pan: Aaqfk 9998 P अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Sunil Talati, Ar Revenue By : Shri N.J. Vyas, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 14/05/2024 घोषणा क" तार"ख /Date Of Pronouncement: 28/05/2024 आदेश/O R D E R Per Makarand V. Mahadeokar

For Appellant: Shri Sunil Talati, ARFor Respondent: Shri N.J. Vyas, Sr.DR

Section 143(3)Section 250Section 32

following the mercantile system of accounting for the purposes of computation of income chargeable to income-tax under the head “Profits and gains of business or profession” or “Income from other sources”. 6.1. This Notification No. SO 3079(E) dated 26.9.2016 is applicable from the assessment year

Novartis India Ltd, Mumbai vs. Asst CIT 7(1), Mumbai

ITA 2308/MUM/2012[2003-04]Status: DisposedITAT Mumbai28 May 2024AY 2003-04

Bench: Pavan Kumar Gadale & Shri Girish Agrawal

Section 37(1)Section 41(3)Section 80H

IN THE INCOME TAX APPELLATE TRIBUNAL, “J” BENCH MUMBAI BEFORE PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER

ACIT Cir 7(1), Mumbai vs. Novartis India ( Formelry Known As Hindustan Ciba Giegy Ltd), Mumbai

In the result, (i) the appeal filed by the assessee is partly allowed for statistical purpose (ii) the appeal filed by the revenue is dismissed and (iii) the Cross Objections filed by the assessee ...

ITA 2188/MUM/2012[2003-04]Status: DisposedITAT Mumbai28 May 2024AY 2003-04

Bench: Pavan Kumar Gadale & Shri Girish Agrawal & Co 76/Mum/2013 (A.Y 2003-04) Novartis India Limited Vs. Deputy Commissioner Of Income–Tax–14(1)(1) Inspire Bkc, 7Th Floor, Room No 432, Bandra Kurla Complex, Aaykar Bhawan, Bandra (E) M.K. Marg, Mumbai-400051. Mumbai-400020. Pan/Gir No. Aaach2914F (अपीलाथ"/Appellant) (""यथ"/Respondent) Deputy Commissioner Vs. Novartis India Limited Of Income–Tax–14(1)(1) Inspire Bkc, 7Th Floor, Room No 432, Bandra Kurla Complex, Aaykar Bhawan, Bandra (E) M.K. Marg, Mumbai-400051 Mumbai-400020 Pan/Gir No. Aaach2914F (अपीलाथ"/Appellant (""यथ"/Respondent)

Section 37(1)Section 41(3)Section 80H

profits derived from exports shall be the amount which bears to the profits of the business as computed under the head ‘Profits and gains of business or profession’, the same proportion as the export turnover to the total turnover. The emphasis is on the words ‘profits derived from the exports ... would mean as follows: - (baa) “profits of the business” means the profits of the business as computed under the head “Profits and gains of business or profession” as reduced by— (1) ninety per cent of any sum referred to in clauses (iiia), (iiib), (iiic), (iiid) and (iiie) of section

Shri Madhopur Kraya Vikraya Sahkari Samiti Limited, Shrimadhopur vs. Income Tax Officer, Neem Ka Thana

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

ITA 749/JPR/2023[2014-15]Status: DisposedITAT Jaipur27 May 2024AY 2014-15

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Vedant Agrawal (C.A.)For Respondent: Shri Anup Singh (Addl.CIT) a

Section 143(2)Section 143(3)Section 36Section 80P(2)(a)Section 80P(2)(d)

employee in the relevant fund by the due date. Where such income is not chargeable to tax under the head “profits and gains of business or profession” it will be assessed under the head “income from other sources.” XXXXXX 44. There is no doubt that in Alom Extrusions, this court

M/S Active Securities Limited, New Delhi vs. ITO, New Delhi

The appeals are allowed

ITA 2335/DEL/2016[2012-13]Status: DisposedITAT Delhi27 May 2024AY 2012-13

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharma

For Appellant: Shri Puneet Agarwal, AdvFor Respondent: Shri Kanv Bali, Sr. DR

Section 143(3)Section 143(3)(ii)Section 24

lease amount, rents, licence fee) received by an assessee from leasing or letting out of assets would fall under the head 'Profits and gains of business or profession'; 2) it is a mixed question of law and fact and has to be determined from the point of view ... activity of exhibiting films in its theatre and such income of the assessee was being declared and assessed under the head 'Profit and gains of business or profession'. These facts also have not been controverted by the revenue. Thus, the contention of the assessee that leasing out of the theatre

Sanjeev Kumar Goyal, Fatehabad vs. DCIT, CC-2, Ludhiana

In the result, the appeal of the assesse is allowed

ITA 80/CHANDI/2023[2019-20]Status: DisposedITAT Chandigarh22 May 2024AY 2019-20

Bench: This Hon’Ble Tribunal Under Section 253 Of The Income Tax Act, 1961 As Amended From Time To Time. 2. The Assessee Is Aggrieved By The Order Of The Ld. Cit(A) Dt. 20/01/2023 In Appeal No. 10853/2018-19/It/Cit(A)-5/Ldh/2021-22 For The A.Y. 2019-20 Under Section 250(6) Of The Income Tax Act, 1961 Which Was Dismissed. Therefore The Present Second Appeal Under Section 253 Of The Income Tax Act, 1961 Before Us Against The Aforesaid Order Dt. 20/01/2023 Which Is Hereinafter Referred To As The Impugned Order.

For Appellant: Shri Sudhir Sehgal, Advocate and Shri Rishaba Marwaha, C.AFor Respondent: Shri Dharamvir, JCIT, Sr. DR

Section 143(2)Section 250(6)Section 253Section 68

scheme of sections 69, 69A and 69C being treated separately, because such deemed income is not income from salary, house property, profits and gains of business or profession, or capital gains, nor is it income from 'other sources' because the provisions of sections 69, 69A, 69B and 69C treat unexplained ... assessee, as a deductible trading loss on its confiscation, because such deemed income did not fall under the head of income 'Profits and gains of business or profession'. 8. In our opinion, therefore, the Tribunal was perfectly right in holding that the value of the gold was liable

Rajiv Kumar Goyal, Dhuri vs. DCIT, CC-2, Ludhiana

In the result, the appeal of the assessee is allowed

ITA 79/CHANDI/2023[2019-20]Status: DisposedITAT Chandigarh22 May 2024AY 2019-20

Bench: This Hon’Ble Tribunal Under Section 253 Of The Income Tax Act, 1961 As Amended From Time To Time. 2. The Assessee Is Aggrieved By Order Of The Ld. Cit(A) Dated 03/02/2023 In Appeal No. 10850/2018-19/It/Cit(A)-5/Ldh/2021-22 For A.Y. 2019-20 Under Section 250(6) Of The Income Tax Act, 1961 Which Was Dismissed. Therefore The Present Second Appeal Under Section 253 Of The Income Tax Act, 1961 Before Us Against The Aforesaid Order Dt. 03/02/2023 Which Is Hereiafter Referred To As The Impugned Order. Factual Matrix 3. The Assessee Had For The Relevant Year I.E; A.Y. 2019-20 Was Also Engaged In The Same Business I.E; Manufacturing Of Pvc Pipes & Had Filed

For Appellant: Shri Sudhir Sehgal, Advocate and Shri Rishaba Marwaha, C.AFor Respondent: Shri Dharamvir, JCIT, Sr. D.R

Section 133ASection 139(1)Section 250(6)Section 253

sections 69, 69A, 69B and 69C being treated separately, because such deemed income is not income from salary, house property, profits and gains of business or profession, or capital gains, nor as it income from "other sources" because the provisions of section 69, 69A, 69B and 69C treat unexplained investments ... that loss computed under any of the five heads mentioned in section 14 – (i) ‘salary’, (ii) ‘income from house property’, (iii) ‘profits and gains from business or profession’, (iv) ‘capital gains’ and (v) ‘income from other sources’ – cannot at all be adjusted against unexplained investment or expenditure. What is necessary

Saptagiri Pattina Souharda Sahakari Sangha Niyamitha Sindhanur, Sindhanur vs. Income Tax Officer, Ward-1, Raichur

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 593/BANG/2024[2018-19]Status: DisposedITAT Bangalore22 May 2024AY 2018-19

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahu

For Appellant: Shri Prasanna N Urala, AdvocateFor Respondent: Shri Srinath S., Jt.CIT(DR)(ITAT), Bengaluru

Section 57Section 80PSection 80P(2)Section 80P(2)(a)

profits and gains of business' in section 80P is wider in scope and encompasses not only the income under the head 'Profits and gains of business or profession’ but also other incomes which have some relationship with the business, though not arising directly from the carrying on of the business

Saptagiri Pattina Souharda Sahakari Sangha Niyamitha Sindhanur, Sindhanur vs. Income Tax Officer, Ward-1, Raichur

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 592/BANG/2024[2017-18]Status: DisposedITAT Bangalore22 May 2024AY 2017-18

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahu

For Appellant: Shri Prasanna N Urala, AdvocateFor Respondent: Shri Srinath S., Jt.CIT(DR)(ITAT), Bengaluru

Section 57Section 80PSection 80P(2)Section 80P(2)(a)

M/S. Advaith Motors Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-1(1)(1), Bengaluru

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 525/BANG/2024[2020-21]Status: DisposedITAT Bangalore22 May 2024AY 2020-21

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2020-21

For Appellant: Shri H. Vinay Kumar, CAFor Respondent: Shri Srinath S., Jt.CIT(DR)(ITAT), Bengaluru

Section 143(1)Section 143(1)(a)Section 250Section 36(1)(va)Section 43B

employee in the relevant fund by the due date. Where such income is not chargeable to tax under the head "profits and gains of business or profession" it will be assessed under the head "income from other sources." ** ** 44. There is no doubt that in Alom Extrusions, this court

Malhan Constructions Pvt. Ltd., New Delhi vs. DCIT, Circle- 6(1), New Delhi

In the result, appeal filed by assessee is dismissed

ITA 452/DEL/2018[2013-14]Status: DisposedITAT Delhi20 May 2024AY 2013-14

Bench: Dr. B.R.R. Kumar & Ms. Madhumita Roy

For Appellant: -None-For Respondent: Shri Anshul, Sr. D.R

Section 143(3)Section 201(1)Section 250(6)Section 40

contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession"- (a) in the case of any assessee (ia) any interest, commission or brokerage, rent, royalty, fees for professional services or fees ... contrary in section 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession", (a) In the case of any assessee (ia) any interest, commission or brokerage, rent, royalty, fees for professional services or fees

Aban Singapore Pte Limited, Chennai vs. DCIT Intl Tax 1(1), Chennai

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

ITA 1329/CHNY/2023[2021-2022]Status: DisposedITAT Chennai17 May 2024AY 2021-2022

Bench: Hon’Ble Shri V. Durga Rao, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.1329/Chny/2023 (िनधा"रण वष" / Assessment Year: 2021-22) & 2. Stay Application No.9/Chny/2024 (In Ita No.1329/Chny/2023) (िनधा"रण वष"/Assessment Year:2021-22) M/S. Aban Singapore Pte. Limited Dcit बनाम/ 113, Pantheon Road, Egmore S.O International Taxation-1(1), Vs. Egmore, Chennai-600 008. Chennai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaqca-2845-Q (अपीलाथ"/Appellant) : (!"थ" / Respondent) अपीलाथ"कीओरसे/Appellant By : Shri P. Murali Mohan Rao (Ca)-Ld. Ar !"थ"कीओरसे/ Respondent By : Shri Nilay Baran Som (Cit)- Ld. Dr सुनवाईकीतारीख/Date Of Hearing : 03-04-2024 घोषणाकीतारीख /Date Of Pronouncement : 17-05-2024

For Appellant: Shri P. Murali Mohan Rao (CA)-Ld. ARFor Respondent: Shri Nilay Baran Som (CIT)- Ld. DR

Section 143(3)Section 144C(5)Section 28Section 40Section 44ASection 44B

section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession" Provided that this sub-section shall not apply in a case where the provisions of section 42 or section 44D or section 44DA ... section (2) is deemed to be the profits and gains of such business chargeable to tax under the head “profits and gains of business or profession”. It is because the provision of section 44BB of the Act has quantified the deemed income of the non-resident assessee